Mr Rajoy has appointed his new cabinet ministers on Friday. When we talk about governance in Spain, with what is clearly a minority government, the socialist party’s participation in this future looks inevitable. And only then will we witness its capacity for reinvention and getting past the slogans.
Spanish think tank Funcas said this week it forecasts an average annual inflation rate in Spain of 1.5% in 2017, although it is feasible that this could reach 2% in one month or other during the first half of next year due to factors like the uptick in oil prices.
A few weeks ago Spanish soprano Ainhoa Arteta let loose and made some harsh comments to the press, complaining that the Inland Revenue is “crushing” her with taxes. And once again everyone is betting the government will implement tax hikes to provide a solution for the 5 billion euros imbalance in the public deficit and comply with the 3.1% target demanded by the European Commission.
If demographics fail, the economy doesn’t grow and employment stagnates, then there is no difference at all between the pay-as-you go system (Spain’s current state pension system) and the capitalisation scheme (put forward as a miraculous solution, now used in private pension schemes), says expert Niko Garnier.
Today Mariano Rajoy has been sworn in as Prime Minister after Saturday’s investiture session. He obtained a simple parliamentary majority with 170 votes in favour, 69 abstentions, 111 votes against and 1 absentee. So at last the period of uncertainty which had lasted since December 2015 is over.
Spain’s seven big banks registered net profit of 10.2 billion euros in the nine months to September, up 4.4% from a year earlier. Against a backdrop of low interest rates, corporate transactions have distored the banks’ global earnings.
The most important thing is not the fact that Rajoy has been saved, although it is, because he is giving investors and businessmen reasons to still have confidence in Spain. But it is the fact that he has saved the country from the worst case scenario: a return to times of misrule, which in this case would have been even more bloody for the country.
Everyone seems to agree that salaries need to be increased in order to activate and maintain economic growth. That said, the differences between trade unions and businessmen is abysmal. And even though Spain’s economy may be growing at 3.1% in 2016, the country’s average wage has barely risen by 232 euros over the last 15 years.
Spain’s main non-financial listed companies are contributing to building a more balanced, flexible and resistant financial system. According to a report prepard by BME’s Research Department, between 2010 and 2015 this group’s shareholder funds grew by 15.4% and its financial debt fell by 12.2%, with a decline of nearly 40% in bank credit and and a parallel 23% rise in fixed income issuances.
Spain’s risk premium has fallen almost 5% with respect to Friday’s close after the socialist party’s decision to abstain and facilitate, finally, the formation of a government. So Mariano Rajoy will become President again after nearly 11 months in a caretaker role.