Yesterday the risk premium in Spain dropped to 311 basis points and debt sales fell to more than half of the cost of financing. It looks like the news about Rajoy's rapid reforms, backed by a resounding majority, have clearly calmed the markets. Also, Rubalcaba's consent could have helped.
But it is also important to point out the rebound across all European markets and that the IMF has come up short and will only provide 150 billion of the 200 billion that it promised to allocate to bailing out the euro. On the one hand, entrepreneurial confidence in Germany has improved. On the other hand, all indicators suggests that the BCE's three-year loans to lenders are bringing greater confidence to a financial sector that, at least in Spain?s case, will be Rajoy's main challenge.
