Instead of joining a coalition, Iglesias said his party will focus on realizing emergency social legislation to help those in need and assure that families don't get evicted for not paying mortgages and that senior citizens are able to afford medicines.
"There are Spaniards who cannot wait," he said at a news conference following his meeting with Rajoy.
Podemos wants Catalonia to remain a part of Spain but believes it should reject independence in a popular referendum, similar to the method Scotland used last year.
"The only way to defend the unity of our country is through democratic processes," Iglesias said, as cited by The Guardian.
If there is still a deadlock two months after the first parliament vote of confidence on a new prime minister, new elections must be held.