Diario actualizado de economía y finanzas - International Journal of Economics & Finance    13 de noviembre de 2019

EMF in English


Spain: Compromises Will be Key to Break the Political Gridlock

  • The general elections resulted in another fragmented political outcome, with no single party or bloc winning an outright majority in Congress

DBRS Ratings GmbH (DBRS Morningstar) notes that, on 10 November 2019, the Kingdom of Spain (Spain; rated “A” with a Positive trend by DBRS Morningstar) held its fourth general election in as many years. As widely expected, the election resulted in another fragmented parliament, with Partido Socialista Obrero Español (PSOE) winning most seats in Congress, but still far away from an outright majority. Therefore, compromises will be needed to break the political gridlock and to avoid another hung-parliament.


Another hung parliament in Spain raises question of governability and increases rating pressure

  • The rating implications of Spain’s electoral outcome are tilted to the downside, as the continued political stalemate raises doubts about the emergence of a stable government able to address the country’challenges

Spain’s fourth election in as many years once again confirmed that the country’s next government can only be formed through a coalition or partnership across several parties given Spain’s increasingly fractured political environment. This matters from a credit perspective, as the prospect of a prolonged period without a government implies that the remaining challenges of the country high public debt, labour market rigidities, low total factor productivity as well as the perennial question of Catalan autonomy/independence remain unaddressed.