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While the focus of the European debt crisis leans towards Italy, fresh news come from Spain. According to reports, Spain’s prime minister José Luis Rodríguez Zapatero might push forward the Spanish general elections to October 23rd or October 30th. The markets are moving much faster, and mid October is a long 10 weeks away.  

The original plan was to have elections in March. Zapatero recently announced that they would be held on November 20th. He has been under pressure from the main center right opposition party, Partido Popular (PP) and and as of a few days ago bythe CiU party, to push forward the elections due to the turmoil in the markets.

The reasoning was that a new government could take the hard decisions needed for Spain during the current round of the euro-zone debt crisis, and that such a government will have the necessary political backing from the people. Zapatero already announced he won’t be seeking a reelection. The PP has a significant majority in polls.

Contrary to Italy, Spain’s government has a manageable GDP to debt ratio, lower than the EU average. But Spain has a decentralized system. Many municipalities as well as the 17 regional government, have significant power and significant debt.

Some of the Spanish debt is still hidden. This causes the great fear.