Prime Minister Jose Luis Rodriguez Zapatero of Spain has thrown a wild card into his country’s financial future even as he announced his withdrawal from next year’s election. He made the announcement on Saturday, putting into question his country’s financial health even as the yield on the country’s bonds began to rise in the wake of the news.
Zapatero, according to a Bloomberg report, had pushed through the toughest austerity package in 30 years, and investors rewarded the measures by sending the yield on the nation’s bonds downward even while its neighbor Portugalsaw its own yields rise to record levels. Now, however, Madrid may be in for some turbulent times and the yields on its bonds have already begun to rise.
Stuart Thomson, a Glasgow-based fund manager at Ignis Asset Management, which oversees about $120 billion, was quoted in the report saying, “The politics are turning more difficult. There has been a lot of money coming into Spain; it started to underperform on Thursday and Friday and I suspect that underperformance will continue as a result of this.”