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Spain PM calls early election

Saturday, July 30, 2011 - 01:44

July 29 - Spanish Prime Minister Jose Luis Rodriguez Zapatero calls a general election for November 30 after Moody's puts Spain's credit rating under review. Ruairidh Villar reports.

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Under pressure from global markets, Spanish Prime Minister Jose Zapatero announces an election four months early. (SOUNDBITE) (Spanish) SPANISH PRIME MINISTER JOSE LUIS RODRIGUEZ ZAPATERO, SAYING: "If I have decided to announce this election calendar today without it being legally necessary, it is to project political and economic reassurances in the coming months in terms of what is left to do and what we are going to do." Markets are in urgent need of a confidence boost. Bond yields are at their highest level for more than a decade, and on Friday Moody's warned Spain could see its credit rating slashed. It said weak growth and excessive regional spending could derail the country's austerity plans. For investors that's a worryingly familiar story -- one they fear may put Spain next in line for a euro zone bailout. Analyst Miguel Murado says calling an election will do little to change that. (SOUNDBITE) (English) POLITICAL ANALYST, MIGUEL MURADO, SAYING: "Spain's national debt is not that high. The problem that there is is a problem of confidence. The markets don't have confidence in the Spanish economy. So since it's a problem of perceptions -- and not reality -- it depends very much on what will be the result of the election, whether a very strong government will emerge or a more unstable government in need of electoral alliances with other political forces." And with the gap between Spain's two main parties getting rapidly smaller, markets could have an anxious wait for the elections on November 30th. Ruairidh Villar, Reuters

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Spain PM calls early election

Saturday, July 30, 2011 - 01:44