Spain is approaching winter in a context of growing political instability. Both international events and the internal situation led us to anticipate a long period of uncertainty in which companies will have to pay equal or more attention to the political environment than to economic data.

While there is still no end in sight to the war in Ukraine, which has had so many adverse consequences for Europe and Spain, the escalation of the conflict in the Middle East creates new threats to stability around the world.

The Hamas terrorist attack against the population of Israel has triggered a strong military reaction by the Israeli Government. The forecast is that violence and armed confrontations could last for months or even years. Other actors, such as Iran, the United States and several Arab countries, may be involved. Taking into account the volatility of the area and its enormous geostrategic importance, the effect of these tensions on the progress of other regions of the world can be very significant.

In the case of Spain, this worrying international context is combined with the extension of the provisional nature of the Government. The general elections of July 23 did not serve to form a clear government majority. The center right Popular Party candidate, Alberto Núnez Feijóo, failed in his attempt to obtain the parliamentary support necessary to be named prime minister.

Now it is the current acting President of the Government, Pedro Sánchez (socialist), who is trying. But to achieve this it depends on the Catalan pro independence parties, who have very little or none interest in the governability of Spain. One of the supporters that Sánchez needs is Carles Puigdemont, who fled from Spanish justice after organizing the illegal 2017 referendum and lives in auto exile in Belgium.

In exchange for his support, Puigdemont demands from Sánchez an amnesty for all crimes committed by the independentists for the organization of that referendum, a step that is opposed by the Popular Party, a majority of jurists and a large part of Spanish society.

Sánchez’s negotiation with the independentists may continue for more than a month. If not successful, Spain would be forced to repeat the elections, probably on January 14, 2024. But even if this negotiation were successful, the Government that would result would be very fragile and constantly subject to the pressure from parties that are not interested in the stability of Spanish democracy.

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