Spain: Double the risk with two elections looming – Deutsche Bank

By FXStreet FXStreet (Delhi): Research Team at Deutsche Bank, note that Spanish economy is faced with double the risk as it faces two back to back elections; the Catalan elections and the general election.

Key Quotes

“Spain faces the Catalan election on 27 September and a general election on 13 or 20 December. In Catalonia, the pro-independence parties are nearly 10pp below the absolute majority which would trigger a unilateral declaration of independence and on balance we think momentum is not in their favour.”

“The news is less positive at the national level where opinion polls paint a highly fragmented picture. We see an unstable coalition as the most likely outcome. A majority would need two large parties and a constellation of smaller and regional parties. Based on current polls it is highly uncertain whether a PP-led or PSOE-led coalition is more likely.”

“Overall, we see two risks. First, Spain could face an unprecedentedly fragmented Congress. Second, there is a material risk of a government significantly influenced by Podemos.”
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Source:: FX Street