Country risk up to 252 points
The country risk for Spanish public bonds increased to 252.5 points last week
(this is measured by the difference between the interest rate on Spanish 10 year
bonds compared with German 10 year bonds). This is the result of the financial chaos
in Greece.
The movement of the 'Indignants' spreads
Support for the ‘Indignant Movement’ has now spread beyond the borders of Spain with demonstrations in Prague, Warsaw, Vienna, London, Jerusalem, New York, Budapest, Athens, Rabat, Paris, Berlin and Lisbon. In Spain protests have taken place outside town halls at the time when the new councils were being constituted. In Madrid 300 people simulated a ‘funeral for democracy’ complete with coffin and fake priests. In Palma de Mallorca protesters shouted ‘Corruption’ whilst in Valencia they cried ‘Camps a Picassent’ (Picassent is a prison).
Ibex under 10,000 points
On Monday the Ibex, the Spanish stock exchanges index, dipped under the psychological barrier of 10,000 points for the first time in 5 months. The reasons are the bumpy world markets and the dramatic situation in Greece. It seems clear Greece will not be able to pay its debts, and the European Commission is considering a new rescue package.
Catalonia defies National Government
The new regional government of Catalonia, under the leadership of Arturo Mas (CiU), has presented a new budget for the region, even more 'deficitory' than the ones of the previous government. This is in clear defiance of the austerity line required by the national government, which requested regional governments not to surpass a deficit of 1.3%. The planned deficit in Catalonia is 2.6%.
It is interesting that PP in Catalonia has signalled that they will support the budget of President Mas, in spite of demanding further cuts in the national budget of Prime Minister Zapatero.
Three Constitutional Court judges resign
The Vice President plus two other members of the Constitutional Court have presented their resignations as a protest against the political parties, regarding the delayed renewal of their appointments, which was due last November.
84.1 of Spaniards fear unemployment
In a survey by the Centre of Sociological Investigations (CIS) 84.1% of Spaniards questioned mentioned unemployment as today's biggest problem. This is the highest expression of concern in the past 14 years. After unemployment 46.6% were concerned about economic problems, followed by 22.1%, who had a negative perception of the political system and the political parties. Only 2.9% considered the political situation was 'good' against 66.8% who said it 'bad or very bad.'
210 million euros compensation for vegetable growers
The European Union will give 210 million euros as compensation for losses suffered by Spanish vegetable producers as a result of the erroneous accusations made in connection with the E.Coli epidemy.. Spain has protested that the amount only covers 50% of the actual loss.
This is the last Weekly Report before the summer holidays. We hope all readers will enjoy a relaxing but stimulating break. We will be back in the middle of August with a Summer Report, summing up what happened during the break.
The results of the elections in May
By Per Svensson
The preliminary results of the municipal and regional elections held on 22nd May is clear. We say preliminary, because the elections may lead to a change in national government, where the tattered PSOE, ruling Spain with a minority of seats in parliament, will lose a vote of no confidence. The opportunistic regional parties which have supported Rodriguez Zapatero so far, in exchange for important financial concessions, may prefer to support the winning horse, PP. Anyhow, the next national elections are now taking place in the spring of 2012. Due to their miserable handling of the crisis, PSOE will for sure lose.
A blue map of Spain
Political, Spain has been coloured blue (meaning conservative PP). Partido Popular obtained 8,474,031 votes and saw 26,499 municipal candidates elected. Of the 50 Provincial Capitals, 33 will be governed by PP, with absolute majorities in 31.
6,276,087 votes were cast for the socialist PSOE and 21,767 candidates elected. They lost 14 provincial capitals and today may govern in only 9.
The smaller national parties IU (United Left) and UPyD (Union, Progress and Democracy) defended their positions and percentages, but do not play any significant role. In Barcelona the moderate nationalist party CiU won 15 seats (+3) in this traditionally socialist stronghold; PSOE managed to hold on to just 11 (-3). With the support of PP, the mayor will be from CiU.
The virtual two party system of Spain is intact.
In the capital Madrid, PP maintained its absolute majority.
It is easier to give the places where a the mayor has come from a party other than PP:
Lleida and Tarragona in Catalonia, PSOE managed to hold on to the position of mayor.
In Santa Cruz de Tenerife PP and CC (Canarian Coalition) each won 9 councillors; in 5 of them PSOE will support the CC.
In Cuenca and Toledo PSOE won the position of mayor.
Dangerous development in the Basque Country
The terrorist infested lists of the new party Bildu in the Basque Country, which was permitted at the last minute by the highest court, won the mayor's seat in 100 municipalities, amongst them, San Sebastian, which has traditionally has been a stronghold of the socialists. Several known terrorists were amongst the candidates, some of whom even previously convicted.
It is to be expected that Bildu will adopt several of ETA’s aims, like; the release of terrorist prisoners, or that they will be moved to prisons in the Basque Country. We shall see less Spanish banners on municipal buildings, and there will be more instances of the Basque language replacing the national language. There will be demands to replace the Guardia Civil with the regional police… etc. etc. The 100 Bildu town halls and their councillors in other municipalities will be an important power base for demanding independence from Spain for the Basque Country.
Rosa Diez, born in the Basque province of Vizcaya and previously Euro deputy for PSOE is now leader of the smaller party UPyD and is representing it in the national Parliament. Last week she presented a speech in Hernansancho (Avila), where her party won the mayoral seat, in which she compared the conquest of Bildu with the advent of fascism in Germany (saving the distances), adding “something very bad is happening in a country when hundreds of thousands citizens are feeling threatened by the entry of a party in the political institutions….. There are many people in Euskadi (the Basque Country) who are afraid.”
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