The prospect of a sovereign bailout is not the only challenge facing the Spanish prime minister in the coming weeks. The political complexities of the Basque Country, social unrest and a lack of coordination within the government itself must all be confronted.
The government’s decision to raise income tax will have a very high-profile casualty: Spain’s soccer teams, which must now negotiate contracts with players under vastly different terms.
The transition from Spain’s outgoing Socialist government to the new conservative administration has been marred by an apparent lack of openness on both sides about the public accounts. This does not auger well for Spain’s political horizon or its economy.