By Sarah White

CORDOBA, Spain (Reuters) - The parched olive groves and tranquil towns of Spain's southern Cordoba province are an unlikely backdrop for a political upset that could reverberate across Europe.

Yet some locals like 57-year-old Lorenzo Molina, an unemployed librarian, hope they can help deliver just that in a fresh nationwide election on June 26 following an inconclusive December ballot.

Gains for an anti-austerity alliance led by the young Podemos party in tightly-contested provinces like this could tip the balance in its bid to lead the next government, and this could turn Spain into the European Union's next headache after Britain's June 23 referendum on EU membership.

A surge into second place for Unidos Podemos ("Together We Can") ahead of Spain's Socialists would make the far-left front a serious contender to form a coalition government, cementing the decline of Spain's once-mighty center-left in the process.

After radical leftist Syriza's success in crushing the social democratic Pasok in Greece, a Podemos breakthrough could also buoy euro-skeptic anti-establishment movements in the likes of Italy or France as worsening inequality fuels discontent.

For Molina, a dyed-in-the-wool backer of the ex-communists now part of the leftist alliance, it's a momentous prospect after decades on the fringes of Spanish politics, hankering after this so-called "sorpasso" (eclipse) of the Socialists.

"It's time to air things out," Molina said on a balmy evening in the city of Cordoba, as an eclectic mix of families and people waving hammer and sickle flags arrived at a rally in a local park. "The Socialists have been in charge of our institutions for many years," he added, as cries of "Yes we can" rang out among the crowd of several hundred.

Born in 2014 out of the fervent protests against spending cuts that swept Spain during a recent recession, Podemos placed third in December's election as a standalone party, taking 69 seats in Spain's 350-strong lower house.

Its subsequent tie-up with anti-capitalist Izquierda Unida, a revamped communist party formed in the 1980s, could see it clinch between 84 and 95 seats, the latest polls show.

Meanwhile, the Socialists, who came second last time on 90 seats, are seen sinking to between 78 and 85. That would be their worst result in over 40 years and put them in an excruciating position in another highly fragmented parliament where no single party is expected to carry a majority.

To avoid a third election, the Socialists may have to either back a left-wing coalition fronted by a party that imperils their existence, or enable a minority government led by a foe, the center-right People's Party (PP) which is seen coming first.


In Cordoba, one of only a dozen constituencies out of a total 52 where some seats are hanging in the balance, Unidos Podemos is going all in. Based on December's results, the alliance is barely 3,000 votes away from getting a second lawmaker elected out of a possible six in Cordoba.

Because of the oddities of Spain's electoral system and the way seats are dealt out, its success here would come at the expense of liberal Ciudadanos ("Citizens"), another newcomer party which should place fourth nationwide, as in the last election, and also secured one lawmaker in Cordoba.

But Unidos Podemos is rather eyeing a moral victory in what not so long ago was the Socialists' backyard.

To make sure it happens, Pablo Iglesias, the charismatic pony-tailed leader of Podemos, has parachuted his political mentor, Manuel Monereo, to head the party list in the province.

The alliance is also making a strong push in the rural areas where the Socialists are strongest, campaigning village by village to try and lure people.

And most of Podemos and Izquierda Unida's leading figures visited Cordoba over the last month, putting in on par with much bigger constituencies like Madrid or Barcelona.

It was here for instance that the alliance was unveiled nationally on May 13 by Iglesias and ex-Cordoba mayor Julio Anguita, Izquierda Unida's leader in its heyday in the 1990s.

"It's now or never," Anguita, a pivotal figure of the left and who started 20 years ago to design the strategy to break the Socialists' hegemony, urged around 2,000 activists and followers, drawing euphoric applause.

As a result of the leftist offensive, the Socialists have spent much of the campaign trying to explain their disenchanted voters why they should not cast their ballot for Unidos Podemos rather than discussing their policies.

At one twilight rally in the town of La Carlota, a farming community 30 km away from Cordoba's capital, a small gathering of Socialist faithful were told to spread the word and encourage friends to back the party.

"With Unidos Podemos it's all about the image. Their speech works well on television but that's it," Juan Pablo Duran, a senior Socialist leader for the Andalusia region told the crowd.


If Unidos Podemos' communist roots work well in Cordoba, at a national level it is cultivating a less radical image.

Its program, including plans to raise corporate taxes or reverse labor reforms that made it cheaper for companies to fire workers, is not dissimilar to the Socialists', and it has tried to project itself as a cuddly party, including by changing its logo to a rainbow-colored heart.

It is also saying it will seek to form a coalition with the Socialists to unseat acting Prime Minister Mariano Rajoy.

But political insiders say Podemos is actually less interested in taking over the government than in destroying the 137-year-old Socialist Party.

For that to happen, a "grand coalition" between the conservatives and the socialists or a PP minority government enabled by the socialists would come in handy for Podemos.

"The Socialists have a clear choice: they can back us, or they can choose to commit suicide by getting involved in a grand coalition," said a senior Unidos Podemos member on condition of anonymity.

But with Socialist leaders describing in private a potential deal with Podemos as a kiss of death and the threat of a third election deepening fears for Spain's economic recovery, that may be the only way forward for the center-left party.

Such a scenario would help break the stalemate now, but it might be bad news for Spain's political stability down the road.

(Editing by Julien Toyer and Mark Heinrich)