Spanish politics will be under the spotlight this week in Europe. The most likely consequence is that Spain’s risk premium will increase and the Ibex will underperform relative to other European stock exchanges.
UBS | Pro-independence parties in Catalonia have won a majority of seats – but not of the total of votes cast. As a result, we would advise investors to remain cautious about buying Spanish sovereign debt until some clarity emerges over the next steps of the new regional government.
Parties staunchly supporting independence have won the elections to the regional Parliament only in terms of seats, not votes.
The proximity of the regional elections in Catalonia, due to take place at the end of this month, combined with the uncertainty over the results of this process and its consequences, is leading foreign and many domestic investors to reduce their exposure to the Spanish stock market.
BARCELONA | By Joan Tapia | Last month, I warned about the serious political problem in Spain, which was (and is) focused on the Catalonian crisis and the rise of the new political party Podemos. Both could disrupt the political system and kill off imperfect bipartisanship. Meanwhile, the economy was starting to show some signs of improvement. In November, the perception that the economy is improving while politics are worsening has increased and multiplied. It is difficult to argue with the fact that the economy is going better than last year.
MADRID | By Álex García
WASHINGTON | By Pablo Pardo | Since the inception of constitutions in modern nation-states, none have undergone such turbulence as those drawn up in Europe. The raison d’être of the European Union is to avoid further turbulence in the future. It is no coincidence that the violent conflicts that have broken out in Europe since World War Two have been outside the EU, in former Yugoslavia, Ukraine, Russia, and Georgia.
MADRID | By Sean Duffy | This weekend´s controversial “non-binding consultation” has caused quite the stir in international media over the past number of days. Reports asserted that 80 % of Catalans had voted in favour of Catalonia becoming an independent state. Yet that figure ignores almost 60% of the electorate who chose not to take part in Sunday´s vote. Those numbers point to a rather more nuanced narrative than the one currently being posited by the Catalan independence movement and many reporters.
MADRID | By JP Marín Arrese | Markets are beginning to feel deeply concerned about the mounting uncertainty the separatist movement in Catalonia has created. Observers do not yet discount a unilateral independence declaration, and are becoming increasingly alarmed at the open challenge to Madrid’s authority. Events could yet spiral out of control and into the unknown.
MADRID | By Fernando G. Urbaneja | The debate about the independence of Catalonia is at the centre of Spain’s political concerns. The Catalan Government and the parties supporting it -covering a broad spectrum, from the centre to the extreme left- have taken every step to call the referendum (called query) that would open the door to independence. The Spanish authorities have taken steps to prevent a consultation-referendum which it says contravenes the text and spirit of the 1978 Spanish Constitution.