Podemos effect drives Ferrovial out of Spain


Ferrovial, the large Spanish construction company owned by the Del Pino family, one of the 35 companies that make up the Ibex 35, is moving to the Netherlands and the Spanish press is talking in its editorials about “Unrest in the government over Ferrovial’s flight to the Netherlands” (Vozpópuli), “The possible domino effect of Ferrovial” (El Economista) and “The Podemos effect pushes Ferrovial out of Spain” (El Español)…. Given that the vice-president of the Government, Yolanda Díaz, leader of the communists, insists that “we must act now on the business margins” (El Economista).

Ferrovial’s board of directors’ arguments for the merger (which must be approved by the shareholders’ meeting) are both business and political. Ferrovial intends to list in Spain but also in the United States, where the company believes there are greater business and growth possibilities. In fact, 82% of the revenues of Ferrovial, the third largest Spanish construction company after ACS and Acciona, now come from outside Spain and 93% of its institutional investors are foreign.

But Ferrovial’s most revealing argument was that the Netherlands is the country of choice for companies with a strong presence in both Europe and the United States because of its AAA credit rating and its “stable legal framework”.

As El Español explains, that Spain today lacks a stable legal framework for its companies is a tragic truism. And it is therefore safe to assume that the political climate generated by Podemos from within the government, a climate that Pedro Sánchez has complacently accepted, if not irresponsibly promoted by demonising companies and entrepreneurs, has played a role in Ferrovial’s decision. “The pressure against banks and energy companies; the ‘tax on the rich’, in reality a punishment for successful professionals; the government’s fiscal and labour policy; the constant increases in the minimum wage; the instability generated by Podemos’ attempts to impose an interventionist framework similar to that of Latin American populism; and the demonisation of the generation of profits, wherever they come from and whatever their context, have not contributed to generating an attractive climate for companies”.

As the daily Expansión explains, taxation, liquidity and shielding may be behind the Spanish group’s move. “The choice is simple: either Podemos and interventionism, or companies and prosperity”, El Español states.

About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.