Spanish Prime Minister José Luis Rodrìguez Zapatero has declared that he will bring the elections forward to November 20th. He announced it today at the last press conference of the Council of Ministers, before the summer holidays.
“The direction is clear,” the prime minister said, “so the time has come to signal an electoral calendar.” Zapatero, weak for some time, had already announced that he would not run for a third term. On September 26, the convocation of the rallies will be officially announced.
The country is grappling with a serious economic crisis and the government has to deal with the movement of the "indignados". The anticipation of the elections would allow a breakthrough to start the recovery. this morning theMoody's rating agency he threatened to downgrade his rating on Spanish government bonds as he believes Greece's bailout plan will add pressure on Madrid by heightening investor uncertainty.
Opposition leader Mariano Rajoy is satisfied, saying that early elections are "good news" because that is what "most Spaniards want".
The markets do not seem reassured by the news: the spread continues to hover around 350 basis points (the record in recent days had seen a difference with the German Bunds of up to 380 basis points) and Madrid loses 0,9% (at 15 pm) .
Italy fears the contagion effect: the spread continues to rise reaching 337 basis points.
