The Impact of Regional And Local Elections in Spain: A new outlook for Infrastructure?
Interesting opportunities lie ahead for infrastructure players in Spain in light of the results of recent regional elections in May 2011. There has been a marked swing in favor of parties who are more positive about the involvement of the private sector in infrastructure. Moreover, regional government finances are in a poor state, which bodes well for an future increase in PPP projects.
Partido Popular (PP) scored a resounding victory in the regional elections, winning regional in Cantabria, La Rioja, Castilla-León, Castilla-La Mancha, Extremadura, Madrid, Murcia, Comunidad Valencia, Aragón, Baleares and the Canary Islands. They were victorious in regions traditionally linked with the PSOE, such as Extremadura and Castilla-La Mancha. In Navarra, the UPN – a regional spin-off of PP – won, while in Asturias, a new party – FAC – led by Alvarez Cascos, a former Minister of Public Works for José Maria Aznar, came out ahead.
In light of the elections, the PP will manage about EUR86 billion in public funds. The PP’s business-friendly approach favors PPPs, infrastructure, lower taxes and employment initiatives. Despite the lack of fiscal revenues, there is a strong commitment to stimulate projects to create jobs and set up positive externalities for the entire country.
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