Spain’s regional and municipal elections in June returned a predictable result: the ruling People’s Party (PP) and opposition Spanish Socialist Workers' Party (PSOE) both lost ground, while the new hard-line leftist Podemos coalition benefited from people’s frustration with austerity politics and widespread corruption in the traditional parties. Majorities were absent in 13 of the 17 regions that voted in the elections, meaning that coalitions will have to be negotiated. 

Analysts point out that together the PP and PSOE still hold more than 50% of the vote, and many believe that the general election scheduled for November is likely to bring a swing back towards the mainstream parties.

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So far, foreign investors have not expressed serious concern over the election result. “People have been enquiring about what it means, but no one has cancelled or scaled back their investment plans,” said secretary of state for commerce, Jaime García-Legaz.

This follows from what Mr García-Legaz described as an excellent year for Spanish FDI in 2014, which ranked as the fifth best since 2000. “People started to realise that Spain’s economic recovery was a reality and, as a consequence, we witnessed an avalanche of investment from abroad,” he said.

Spain’s economy is showing strong signs of having emerged from nearly a decade of recession, with GDP growth expected to reach at least 2.5% this year, placing it first in the eurozone. Consumer spending grew by 10.3% last year, its first increase since 2007. Unemployment continues to hover stubbornly above the 20% mark, however and this was the primary factor behind the leftwing parties’ electoral gains, although official figures are forecasting the creation of at least 500,000 new jobs in the next few years.

One of the most eye-catching new projects is Amazon’s software development centre for Europe, which is being set up in Madrid. The centre, which aims to offer support and develop new operations and functionalities for Amazon Business, will be the company’s third centre, alongside its US operations in Seattle and Austin. “Spain’s human capital is highly qualified and innovative,” said Amazon’s managing director for Spain, François Nuyts. “Amazon has a long-term commitment to the Spanish economy and we plan to continue investing.”

Mr García-Legaz said Amazon’s investment does not come as a surprise, as Madrid is becoming “an IT cluster with a highly skilled and relatively low-cost labour pool”. He says that the government would like to see investment continue to grow in other sectors, which in the past have absorbed a large portion of FDI. “Automobile manufacturing is one of these, as we have the strategic capacity for innovation and currently the country exports 85% of its production,” he said. “We are also looking to promote agribusiness and we have detected a good deal of interest from Asian and Middle Eastern investors."

Mr García-Legaz also points to opportunities in the financial services industry, with upcoming initial public offerings of Banco Mare Nostrum, along with another tranche of Bankia, which was bailed out by the government in 2012. Spanish ports could attract investment under the new law which allows for concessions to be extended for 75 years in exchange for investment commitments. “This could have a positive impact on our major ports, especially the three largest, Algeciras, Barcelona and Valencia,” said Mr García-Legaz.