Spanish Post-Election Austerity Poses Growth Risks: Euro Credit
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Pledges by Spain’s People’s Party to deepen budget cuts may further undermine the nation’s stalled recovery, increasing the risk of contagion as European leaders entertain the prospect of Greece leaving the euro.
The PP, led by Mariano Rajoy, has promised to restore Spain’s AAA rating through “restraint and rigor” if it wins the Nov. 20 election, as polls predict. It plans a cost-cutting overhaul to rein in borrowing costs, which have climbed to 5.5 percent for 10-year debt, close to the highest since the European Central Bank started buying Spanish bonds in August.