Sanchez's name was originally put forward after former Catalan president Carles Puigdemont, living in self-imposed exile in Belgium and wanted in Spain, dropped his candidacy.
"I am hopeful that Spain will deploy its democratic institutions to foster space for debate, and find creative tools of dialogue and reconciliation to deal with the current political situation", Kaye added.
Puigdemont contended that Spanish authorities have "no excuses" not to talk with Catalan leaders "in order to find a political solution of our demands, not by criminal law".
"This opens a new opportunity of dialogue".
A German court has ruled that former Catalan leader Carles Puigdemont can be released on bail pending a decision on his possible extradition to Spain. "But only after the end of the proceedings here in Germany, not before".
"Berlin is now my residence until the end of this process".
A German court is deciding whether Puigdemont should be extradited on the lesser charge of misuse of public funds to hold a banned referendum on independence for Catalonia previous year.
The 55-year-old was detained March 25 after crossing the border from Denmark.
He says the Spanish government "met its obligations" by imposing direct rule on Catalonia after Puigdemont and other separatists organized a forbidden referendum last October on Catalonia's independence. He'll remain on bail in Berlin until a German judge makes a final decision on his extradition.
Katarina Barley told daily Sueddeutsche on Saturday the judges' decision was "absolutely right" and what she'd expected. Madrid has also accused Puigdemont of misusing public money.
Spain is seeking his extradition for rebellion and misuse of public funds in organizing an unauthorized referendum past year on Catalonia's independence from Spain. He can still be extradited on misuse of funds charges.
Barley said it was now up to Spain to prove their embezzlement charges against Puigdemont, which she said "won't be easy".
The High Regional Court of Schleswig-Holstein on April 5, released the ex-president, who was arrested last month on a Spanish-issued warrant as he entered Germany, on a 75,000-euro ($91,700) bail.
But Spain's Supreme Court said on Friday it was considering consulting the European Court of Justice on the ruling, without giving more details.
Puigdemont was arrested by German police March 25 as he entered the country from Denmark en route to Belgium, where he's been based since making an illegal declaration of independence from Spain past year.