JM Martí Font via Macropolis | Spain is not Portugal, although we cannot completely rule it out. Brussels and Frankfurt want Spain to look like Germany. A grosse coalition will reassure the markets, guarantee the prevalence of budgetary orthodoxy and, on the surface, maintain at least the status quo, something very important to the European institutions, the financial powers and the European political class who doesn’t like changes.
Spain has been on a kind of roller coaster ride in 2015, lurching between good and bad news. There was a lot of the first, but it seems not quite good enough to please and impress Spaniards, if the outcome of the general elections is anything to go by. Unless the Socialist ‘barones’ (the regional bosses) can persuade PSOE leader Pedro Sanchez to give the PP a chance to form a new government with the backing of Ciudadanos, there could be worse to come.
Emilio Ontiveros | The Spanish economy grew more than its European counterparts and current tailwinds such as low oil prices also favour it over the rest of the member states. But the country still has a lot to do to become a major league player.
The Spanish Socialist Party is under heavy pressure in the aftermath of the general elections. The extremist Podemos movement nearly ousted it as the leader of left-wing sentiment. But neither can it support the ruling Partido Popular right away, nor risk blocking the forming of a new government and provoking another round of elections. It would pay a high price if it embarked on such a course of action.
The Trade Ministry released figures for foreign investment in Spain in the nine months to September, which showed a 42.9% year-on-year increase to 15.763 billion euros, excluding divestments. This good news coincided with a sharp fall in the IBEX 35 after the result of Sunday’s general elections.
Last Sunday’s electoral results in Spain have cast a gloomy outlook on prospects for securing a stable government. Markets were deeply disappointed as their bet for a centre-right coalition melted down. Ciudadanos performed worse than expected while Partido Popular scored a win but failed to secure enough support.
Fernando G. Urbaneja | One of the values of Spain’s democracy over the last forty years has been left behind following the general elections: namely, political stability. Now the Spanish political scenario resembles more that of Belgium than Germany. The results obtained on December 20th have disappointed all parties’ expectations for putting together a parliamentary model, leaving all the hipotheses on how to form a stable government in the dark.
The Spanish Treasury sold €2.102 billion worth of bonds at its last auction of the year, meeting its issuance target for 2015 of €139 billion. Its average issuing period in 2015 was 9.1 years, not seen since 2010, and it paid an average yield of 0.87%. This has meant that the average cost of debt in circulation has fallen to a record low of 3.16%.
Spain will go to the polls on Sunday and expectations have certainly been met for a more interesting race to the finishing point than in 2011. New kids on the block, centre-right Ciudadanos and anti-austerity Podemos, have put an end to the over 40-year two-party dominance of the Popular Party (PP) and the Socialists. The new government could implement more reforms with expected positive economic impact, but the downturn in markets such as Latin America is likely to weigh more on Spain’s stock market.
BARCLAYS | Spain has undergone considerable structural changes over the past four years. Stronger banks, more competitive firms and a labour market in recovery mode all support a brighter outlook.Ahead of the 20 December general election, we review the near- and medium-term growth and evaluate progress in the labour market, the private- and public-sector deleveraging process and the country’s international competitiveness.