After a summer of missed opportunities, poisoned rhetoric and bitter recrimination, Spain faces what promises to be a very tumultuous autumn.
On September 27 its largest economic region, Catalonia, will hold its most important elections since Spain’s late dictator Francisco Franco passed away 40 years ago. If the pro-independence parties win a majority of seats in Catalonia’s parliament, they have pledged to declare unilateral independence from Spain.
As if that were not enough, in December the country will hold what could turn out to be its most tightly fought general election in decades.
ECB at a Loss
The inevitable result is increased fear and uncertainty – two things that financial markets generally abhor. It’s already beginning to show in the performance of Spanish bond yields. Indeed, as Bloomberg reports, the political instability gripping the nation is having such an effect on investor sentiment that even Europe’s chief financial alchemist Mario Draghi is unable to prevent gravity from taking hold:
This post was published at Wolf Street by Don Quijones ‘ September 8, 2015.
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