Today is an important day for Spain, where two benchmark regions - the separatist inclined Basque region and Rajoy's own Galicia - are holding the first of many elections for regional government in what will be seen as a harbinger of popular (lack of) support for Mariano Rajoy's policies (and further explanation why any incremental steps taken by the increasingly unpopular PM to hand over Spanish sovereignty to foreign could well be his last).
"Two northern regions in Spain are holding elections for their legislatures Sunday in the first popular test of the central government's stringent austerity policies since it came to power late last year.
A deepening financial crisis and how best to address the nation's separatist tensions are the main issues facing political leaders and voters in the turbulent Basque region and in northwestern Galicia. With 2.7 million voters, Galicia is a traditional stronghold of the ruling Popular Party and the homeland of Prime Minister Mariano Rajoy, so an upset there would rock the PP regionally and nationally.
Spain has separatist groups in Galicia, the Basque region and prosperous and influential Catalonia. About 1.8 million Basque voters are likely to oust Socialist leader Patxi Lopez — who ruled thanks to an agreement with the PP — from the 75-seat legislature in the industrious and well-off northern region that borders France. The Basque region has been wracked by decades of separatist violence.
"We hope this election succeeds in bringing us peace, so we can reach an understanding between ourselves and let us know how to make concessions," said Sister Teresa Ormazabal, a nun in the Basque region's largest city, Bilbao. Lopez was jostled by demonstrators carrying placards backing violent Basque separatist group ETA as he voted early Sunday."
None of this is news. What may however surprise many is that as of Friday, Spain's "temporary" €18 billion regional bailout fund is now practically empty: a discovery which will hardly make any additional regions, who have so far dragged their feet in demanding a national bailout, happy with the Prime Minister's handling of Spain's creeping bankruptcy.
- Total bailout fund size: €18 billion
Bailouts already requested:
- Cataluña: €5.023 billion
- Andalucía: €4.906 billion
- C. Valenciana: €4.500 billion
- C. La Mancha: €0.848 billion
- Canarias: €0.757 billion
- Murcia: €0.528 billion
- Baleares: €0.355 billion
- Asturias: €0.261.7 billion
Bailout funding left: €0.821 billion. Oops.Those who waited in hopes things will get better: tough luck.
And as we observed last week, here is why the regional "bailout issue" is only going to get much worse.
To summarize: Spanish regions: broke; Spanish banks: broke: Spain itself: on the verge of being bailed out by Europe. => Time to buy more SPGBs.