Unlike in Italy, Spain’s new government is very much pro-EU and has indicated to comply with the European budget rules, notes the research team at Rabobank.
Key Quotes
“The centre-left minority government has a very weak mandate, implying we should not expect a lot of policy changes in the coming months, although some fiscal slippage is in the cards.”
“We believe that fresh elections before 2020’s official elections are likely.”
“The economic impact will expectedly be very limited in the short term and even possible uncertainty caused by early elections is unlikely to derail the economic recovery or debt reduction path, though the latter could slow a bit.”
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