Spain: Parliament deadlocked - Rabobank

Analysts at Rabobank point out that yesterday’s elections in Spain failed to break the deadlock in parliament, adding that the stalemate will not send the economy into a crisis, but it prevents the economy and public finances from being prepared for one.

Key quotes

"Yesterday’s elections in Spain have again resulted in a parliament with no clear majority for either party or coalition. In fact, as expected, the outcome seems to make it even more difficult to form a government than after April’s elections."

"At the same time, a coalition more through the centre, including the socialist PSOE and the liberal-right1 Ciudadanos, is no longer numerically feasible due to large losses by the latter. Together they lack 35 seats. Right-wing parties together have won 3 seats, but still remain 26 seats short of a workable majority."

"The bottom line is that Spain is set to remain deadlocked for some time to come. While the stalemate in parliament is unlikely to bring down the economy in the short run, it does have negative implications for the longer-term outlook."