HALISTER1: New Spain Vote More Likely After PSOE Deal With Ciudadanos: SG

New Spain Vote More Likely After PSOE Deal With Ciudadanos: SG

(Bloomberg) -- Likelihood of new elections in Spain has increased after left-wing Podemos party and the current administration said they will vote against Socialist party plans to form a govt at next week’s confidence vote, Societe Generale analysts write in client note.
  • Opinion polls suggest any new parliament is unlikely to have radically different numbers, so the imbroglio may not be resolved even after fresh vote
  • No reaction in Spanish bonds to the news flow yday even though the pact between the Socialist and pro-Europe Ciudadanos party is credit negative
    • SPGBs look to be in no-man’s land for months to come
  • NOTE: Confidence vote in Spanish parliament expected March 2; if PSOE fails to form a govt, they have another two months to try again before new elections are triggered
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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