Spain: Driven by politics - Rabobank

When the Spanish government dissolved Catalonia’s parliament and announced that an election would take place on December 21, it was hoping to draw a line under the unofficial referendum that favoured an independent state, according to analysts at Rabobank.

Key Quotes

“According to a Metroscopia poll, however, the ballot could result in a hung parliament with pro-unity parties tipped to win 62 seats and pro-secession factions 63 seats. For the Spanish economy the continuation of political uncertainty would be a drag on an otherwise strong growth outlook.  While this would be a negative factor for the EUR, the absence of any contagion from Catalonia’s independence bid has meant very little lasting impact on the single currency to date.”