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At the end of Q3, Spanish  municipalities  owed 3 billion euros to companies providing urban services, such as cleaning, collections, transport, garbage and more. This is one of the largest debt levels, resulting in months of missed payments.

The capital, Madrid, owes around 600 million euros. This is already putting big pressure on such  companies, who are forced to cut jobs, mostly temporary jobs. Also the autonomous regions owe money to vendors.

This debt, reported here, joins the  high unemployment and bank losses which remain unaccounted for. The economy is quite frozen.

The recent Spanish services PMI was a disaster: the purchasing managers’ index dropped to 36.8 points in November, a drop of 5 points. This is the lowest level since March 2009, and shows that the services sector is squeezing very fast. The chances of a recession in Q4 are very high now.

Spanish yields are still doing better than Italian yields. They rose towards the elections and fell afterwards. Italy’s debt to GDP ratio is higher than Spain’s.

The center-right Partido Popular took a landslide victory in the elections but still hasn’t taken the reins. Mariano Rajoy, the leader of the PP, will be sworn in as Prime Minister in a matter of days.

Rajoy already negotiated a €100 billion rescue plan with German chancellor Angela Merkel.