From 2019 it is possible that Spain will have difficulties financing its public debt, which is definitely not only the official figure of 98.3% of GDP. Rajoy’s increase of this debt by €649 billion has been financed at very low interest rates, thanks to the ECB’s quantitative easing. On the other hand, Pedro Sánchez has announced substantial spending increases, which will inevitably increase debt in 2019.
Shaun Riordan | The motion of censure against Spanish Prime Minister and the election of socialist leader Sanchez as his successor has briefly spooked markets. But in the end it may make less difference than it seems at first sight.
Fernando G. Urbaneja | The Spanish parliament has suddenly and unexpectedly used a constitutional motion of censure against the government of Rajoy to elect a new government. The new government returns Spain to the ancient ghosts of the first third of the 20th century: multi-party and fractured coalitions.
Whatever you think of Mariano Rajoy, you can’t deny his ability to dig in. When in opposition, as leader of the conservative Popular Party (PP), he survived two general election losses, as well as thwarting mutinies within his own ranks; as prime minister since 2011 he has ridden through economic near-meltdown, the threat of new parties Podemos and Ciudadanos and a torrent of corruption scandals.
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.
Many people feared that the outcome of the December 20 elections in Spain would be difficult to manage. But the final situation is much worse than expected. As soon as the recount began after the voting, the conservatives of Prime Minister Mariano Rajoy’s Popular Party (PP) lost their hopes of forming a majority government with Citizens (Ciudadanos). Spain is now, undeniably, facing a period of difficult coalition-building after yesterday’s elections. And this is a very worrisome situation for the country as uncertainty is likely to increase, affecting the mood of investors and companies.
MADRID | April 7, 2015 | By Fernando G. Urbaneja | There are two lingering black marks against the Spanish economy. The first is rampant unemployment, which is second only to Greece in the euro area and the OECD. The second is a large budget deficit-the largest in Europe-which remains stubbornly high and is still some way off the target of 3% of GDP. Against that backdrop, the Spanish economy has returned to stronger growth this year, with forecasts showing the economy could expand by as much as 3%.
BARCELONA | By Joan Tapia | The emergence of the leftwing party Podemos (We Can) and the ghost of a forthcoming political instability weight more on Spanish politics than an unquestionable economic improvement (which is too slow and risky). Anyway the advantage of the conservative Popular Party (PP) in power compared to the Socialist Party (PSOE) was reduced during summer from 8.8 to 3.6 points.
MADRID | By Fernando G. Urbaneja | Spanish Justice Minister Alberto Ruiz Gallardón announced his resignation on Tuesday after the government scrapped his controversial abortion reform plan restricting it to only cases of rape or serious health risks. Although Mr Gallardón had 30-year-experience in politics, president Rajoy let him go –he didn’t want to take the risk of losing more votes in the next elections.
MADRID | By Julia Pastor | Spanish PM Mariano Rajoy started campaigning for the upcoming European elections on Tuesday. In a radio interview he announced that the country’s unemployment rate has started reversing since job destruction is slowering. The fall of the country’s risk premium and 10-year bonds yields are crucial for companies financing abroad, he recalled. Even though Brussels forecasts are just estimates, they do support the idea that Spain could become the driver of peripheral EU with a growth over Italy, Portugal and even France.