A Climate of Fear in C-Suites: Spain Faces Tough 2016 …
Despite the festive season, Spain s business and financial elite are far from happy. In the wake of inconclusive general elections just before Christmas, the country now faces an uncertain future, and if there s one thing most investors and companies do not like, it s uncertainty. Indeed, so unhappy are Spain s corporate owners that they recently cancelled their pre-Christmas shindig. The Entrepreneurial Council for Competitiveness (CEC for its acronym in Spanish), Spain s most powerful corporate lobby group, normally meets during the Christmas period to discuss the political landscape and ways of shaping it to its illustrious members advantage. This year s event was supposed to be held at Telef nica s Madrid headquarters on December 22, just two days after Spain s general elections. The mood of the party was supposed to be celebratory Spain s standing President Mariano Rajoy s People s Party (PP) was expected to pick up enough votes to form a center-right, coalition government with relative newcomers Cuitadans, a political party that had been carefully groomed by Spain s corporate establishment and heavily promoted by the country s media, with one end in mind: keeping the status quo intact.
Not enough Spanish voters seem to have read the CEC s script. Many chose to vote for the Socialist party (PSOE) or the anti-austerity Podemos. However, the two parties did not receive enough votes to form a coalition. Neither did the PP, which picked up more seats than any other party, and Cuitadans. In fact, the voting was so fragmented that the Eurozone s fourth largest economy is not only missing a viable government; it is unlikely to have one for months to come. The only thing that can save Spain from being condemned to months of political limbo is if the socialist party chooses to commit electoral hara-kiri by forming a grand coalition with its arch rival, the PP possible, but improbable! In Catalonia, the radical leftist, anti-EU party CUP just rejected lending its support to the region s messianic premier Artur Mas for the last time, meaning that unless Catalonia s separatists can come up with a last-minute replacement, Spain s richest region will have to hold new elections in March, raising the prospect of an electoral alliance between the anti-austerity, pro-referendum Podemos and the separatist, anti-EU CUP. Even if Catalonia does hold new elections in March, there is no guarantee that a viable coalition will emerge.
As I warned seven months ago, Spain could soon become ungovernable. Hence the climate of fear brewing in many of the country s C-suites. The last thing businesses need especially big ones that depend on government support is a political vacuum, particularly at a time when Spain s benchmark stock index, the IBEX 35, is already showing worrying signs of weakness.
In a year that has been
- ^ Original newz story – Click here (wolfstreet.com)
- ^ WOLF STREET (wolfstreet.com)
- ^ warned seven months ago (wolfstreet.com)
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