Spain Has A Brand New Double-Crisis On Its Hands

spanish austerity riot

Photo: AP Images

Spain is in a perilous spot.Europe is waiting for it to ask for a bailout, so that it the ECB can activate its bond buying program, and start to make good on the plans that have been laid out.

But asking for a bailout represents a loss of autonomy for Spain and its PM Mariano Rajoy.

And if that weren’t going go present enough of a problem for Rajoy, now there are two new issues that are blowing up.

The first is the big protests that everyone saw on today. Maybe they’ll go away, but Rajoy has to present a budget that’s “credible” meaning more anger and likely more protests.

The second is the independence crisis is in the Catalonia region… specifically, Catalonia has announced snap elections and would like to hold a referendum on breaking free from Spain and forming a new country, a process that however it unfolds would be a crisis. This is a rich region of Spain that already feels it pays too much to Madrid, and Rajoy now bringing in outside oversight of national budgets will only make things worse.

The Spanish water torture is set to continue.

As for markets, the Spanish stuff seems to have set off a nerve again. Tomorrow could be interesting.

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