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Catalonia is the main risk for Spain’s new government

Friday, January 10, 2020

Significance

Sanchez will now have to do something which he desperately sought to avoid: rely on Catalan support to survive in government.

Impacts

  • A PSOE-ERC deal which is more favourable to Catalonia will fuel support for Spain’s People’s Party (PP) and Vox.
  • Uncertainty in Catalonia will continue to delay investment decisions while more social unrest will damage tourism and the property market.
  • Spain’s economic outlook will mostly hinge on what happens with global trade.

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