THE party didn´t last too long for new Spanish leader Mariano Rajoy who had a rude awakening from the financial markets. Just hours after his victory in Sunday´s general election Rajoy saw how Spain´s borrowing costs rocketed and also he came under pressure from Europe´s financial markets to reveal his plans for the Spanish economy. The clock is ticking for Spain and really Rajoy can´t wait any longer. The fact that he will not be sworn in as Prime Minister until the end of next month makes the whole state of affairs even more worrying.
Unless he reveals his plans for the Spanish economy in the next few weeks I can see Spain´s borrowing costs rising even further. The financial markets wait for no-one and surely the new Prime Minister could be sworn in earlier rather than later so that he can get down to work? Why do we have to wait a full month for him to be able to form a new government? There are widespread fears that Spain could follow Italy, Greece, Portugal and Ireland and need help from the European Union. The fact that the Spanish economy is too big too fail makes the whole issue even more worrying. Rajoy has a large majority in parliament and a clear mandate to rule but he must act fast. The new Spanish leader has already had a lengthy discussion with German leader Angela Merkel. I suspect that she wasn´t too impressed that he won´t actually become Prime Minister until 2012. It might be too late by then.