I do agree in that the PP (which I would definitely classify as right wing and not anywhere close to the center, whatever that might be) is unlikely to form a government (mostly because it would have to be in coalition with a far-right party that nobody else wants to touch).

However, I disagree on other points. I think the PP got the most votes, but they didn't "win" the election. There is no objectively defined "victory" in the Spanish system, but what they got yesterday doesn't allow them to get even close to their objectives of governing, and is much worse than they anticipated.

There is a possibility indeed that the PSOE (third way social democratic economics, socially progressive) and Sumar (traditional social democratic economics, also socially progressive, although not even close to far left by any accepted definition of the term) will be able to get the approval of the necessary regional parties (which is different to "governing with them in coalition") and continue with something similar to the current government. This is not at all guaranteed, and there remains a possibility that no government can be formed, and that there will be repeated elections next December.

Now, what are the difficulties if the PSOE-Sumar coalition can form a government? basically, most policies in the next four years (at least) are going to be negotiated with a wide range of ideologies, and it's going to be hard. They will be able to take nothing for granted.

Is that a bad thing? in my opinion: absolutely not. I think this is the reality of Spain: we are a mosaic of different ideas and ways of looking at different issues, not a left-right line. And that is the spirit of democracy (however imperfect our implementation of it is in many other regards), every person's opinion should count, and that will be seen at the negotiating table with more parties than ever who will have a say on things. This is strength, not weakness. What we used to have, absolute majorities where the leading party could do whatever they wanted, is what's undesirable.

Finally: I think the current government is perfectly aligned with the dominant positions in the EU in what regards to the economy, at least if we look at how things have gone so far in a wide variety of issues (covid-related aid, energy, war, etc). We are all entitled to our opinions about what is "needed", and what is "good for Spain and the EU", of course. But in my view a continuation of the current coalition would be very good news (especially looking at the rise of the far right elsewhere in Europe).