It’s not a coincidence that Spain and Italy are the biggest debtors in TARGET2 and the most politically unstable. Both have increased their debts with Germany and other countries: Spain from 189.9 billion euros to 319.7 billion. Italy from 188.6 billion to 353.9 billion. Not insignificant amounts.
Spain’s caretaker Prime Minister Mariano Rajoy will this afternoon make his investiture speech to parliament, ahead of a key vote on Wednesday to secure support for his conservative Popular Party to form a new government. The PP have already brokered an agreement for breaking the current political deadlock with centre-right party Ciudadanos, led by Catalonian lawyer Alber Rivera. As a result, Rajoy can probably rely on the support of 170 MPs. But he needs 176 votes (out of a total of 350) if the PP is to win an absolute majority.
Yesterday Spaniards voted again six months after the last general elections on proposals which had changed very little; the only relevant novelty was the integration of Izquierda Unida (IU) and Podemos which in the end turned out to be irrelevant. The new/old left has not gained anything obtaining the same number of seats and votes as in December, when IU ran on its own.
The fourth corner of Spain’s new political chessboard is called “Ciudadanos,” a social movement born in Catalonia 10 years ago and fostered by Catalan independence. Their slogans are: liberty, equality, laicism, bilingualism, Constitution. They elected Albert Rivera, a young lawyer from Barcelona, as their leader in a jam-packed meeting held in that city’s Tivoli theatre in July 2006.
Spaniards will go out and vote again on June 26, six months after the ordinary elections which took place when Rajoy’s government ended its mandate, having enjoyed a four-year majority. The result of the December 20 polls was an impossible political chessboard, with no group capable of forming a government.
Julius Baer Research | The potentially shortest Spanish legislature is bound to come to an end on 26 June 2016 when Spain will elect a new parliament for the second time within six months. Since the politicians have failed to form a new government after the last general election in December 2015, King Felipe VI has dissolved the parliament and called for new elections.
via Macropolis | Neo-Nazis marching through the streets of Sweden, the far-right making its political presence felt in Austria, a beefed up military and police presence on borders in many parts of Europe and stinging criticism on moral and legal grounds of the “one in, one out” agreement with Turkey from human rights groups – these are just some of the signs of the existential crisis that the European Union is experiencing.
Spain overran its deficit goal by one full percentage point last year. While the caretaker government puts the blame on regions under opposition control, such as Catalonia and Valencia, rival parties adamantly attack its budgetary record.
The political parties in Spain seemed unwilling to break the deadlock one month after the general elections had taken place. Then there was a dramatic emergence from the doldrums last Friday, when Podemos made a surprise call for a left-wing coalition headed by the Socialists.
Spanish banks’ market capitalisation is still in the doldrums. Six of the seven lenders listed on the Ibex 35 occupied the top positions in the ranking of European banks with the worst stock market performance in 2015. And investors are continuing to punish Spain’s banking sector at the start of 2016. Analysts agree that profitability is the problem for Spanish banks. And, as the Bank of Spain insists, one solution could be a new wave of mergers, which would probably affect the mid-sized lenders.