Madrid, December 21 (RHC)-- Spain’s ruling Popular Party lost its parliamentary majority in elections Sunday, leaving Prime Minister Mariano Rajoy struggling to avoid becoming the third European leader to be ousted this year after pushing through unpopular austerity policies.

The elections -- which saw Spain’s two establishment parties lose significant ground -- produced a parliament so fragmented that the country will face major governing challenges as it tries to build on its recovery from a painful economic collapse.

Rajoy’s Popular Party won 123 seats, the Socialist party won 90 seats, and the Podemos party won 69 seats. Podemos grew out of the "Indignados" protest movement in Spain.

Although Rajoy’s conservative Popular party won the most votes, they weren’t enough for it to rule on its own, putting Spain on the path toward a minority or coalition government led by the incumbent or one of his rivals.

Spain, which emerged from a recession in mid-2013 after a series of belt-tightening austerity measures and labor reforms that have negatively affected workers, is growing at around 3% this year, the fastest rate among major Eurozone economies. But the country is still coping with an unemployment rate of more than 20%, only slightly below the level when Rajoy took office in 2011.