Italy and Spain In the last four years Italian and Spanish spreads move in parallel, going up or down. Sometimes the Italian spread was higher, sometimes the Spanish one. This year the two spreads were almost perfectly matched; only in summer Spain spread rose by about twenty basis points, which depends on the uncertainties of the general election later this year.

Moreover, the Catalan regional elections, although it gave a majority of seats in the pro-independence coalition, did not result in fibrillation of financial markets, perhaps because the percentage of the vote for independence remained under the absolute majority (almost 48%). Standard & Poor's has indeed raised from BBB to BBB+ the Spanish rating, on the basis of good growth forecasts for this year (+2.8) and next year (+2.6). The evaluation of the rating depends on the reforms, namely the liberalization measures of the labour market, with the aim of achieving a reduction in wages. In fact, the wage share of GDP has fallen in the last five years, from 50.9 to 46.9, which is four points of GDP.

In Italy the share has had a slight decline, but the European Commission expects that things "get better" in the coming years, thanks to the reforms of the jobs act. The term is derived by the acronym "Jumpstart Our Business Startups Act", referring to a US law of 2012, in favour of small-scale enterprises. In Italy the term was instead used to define a set of regulatory measures with regard to work conditions, with the goal of reducing the degree of job protection. According opinions internationally spread by Italian employers, Italian workers would enjoy a very high protection and this would explain the stagnation of productivity. This despite the fact that the analysis by OECD do not report any anomaly in the Italian protection.

However according to the European Commission the results of the reforms are reflected in Spanish exports, which rose by 38.5%. A good result, but Italy did not do much worse, with 35%. And anyway we are close but slightly below the average for the euro area (39.5%). The reason why Spain, next year, should return to the level of GDP prior to the economic crisis, while Italy is expected about five years, is due to the different tax policy.

The whole of the accumulated deficit in six years (including 2015) in Spain is 46.3 points of GDP, while in Italy is 19.2 points; which means there are twenty-seven points of difference. Spain deficit this year is 4,5 and again next year, according to the latest forecasts of the European Commission, will have a deficit of 3.5, i.e. above the 3 per cent limit, while in Italy will be 2 per cent. Of course, this difference in tax policy was reflected in the debt. In 2008, at the outbreak of the financial crisis, Spain had a debt ratio of less than half of the Italian: 39.4 compared to 102.3. In 2015 the Spanish debt is estimated at 100.4 and 133.1 the Italian one. The difference is reduced to a third. Both countries have a current account surplus, the higher the Italian proportion (2.2) than the Spanish one (1.2).

Moreover Spanish unemployment is at 22.4 compared to 12 Italian. There are also relevant differences in the panorama of the political forces. In Italian elections of 2013 brought to the fore the 5 Star Movement (M5S) and its leader, former comedian Beppe Grillo (the followers of the Movement are also called "grillini"). The M5S get 25% of the vote, starting from almost zero (there had been positive results at the local level, especially in Sicily). It is a populist movement with an anti-caste that combines direct democracy with anti-nomenclature positions now on the left and now on the right (for example on the issue of migrants).

The main political force, the Democratic Party (PD), was won by Matteo Renzi and took a centrist position, with an ideology "decision maker" that resembles the one proposed, but not implemented, by Berlusconi. The Northern League, under the direction of Matteo Salvini has put aside the issue of independence of Padania (the north Italy) to approximate positions of Marine Le Pen, of populist nationalism, in the foreground with the anti-immigrant attitude (which incidentally was already clearly present). The League is growing consensus eroding the electorate of Forza Italy, a political force in crisis following the decline of Berlusconi.

In Spain next to the two parties, populars and socialists, the more recent phenomenon is the emergence of two formations: Podemos on the left and Ciudadanos on the right. Podemos has its roots in the events of the "indignant" against the austerity measures implemented by the socialist government first and then from that popular. Ciudadanos instead born in Catalonia, as an expression of the local bourgeoisie who do not agree with the decision of the separatist group led by Artur Mas, but later on extended nationwide. Both sides criticize traditional political forces, but they are open to dialogue.

The leader of Podemos, Pablo Iglesias stressed the diversity of Podemos compared to M5S, and its proximity to Syriza, the movement leaded by Tsipras. One difference between the Italian and the Spanish situation is that in Italy there are parties avowedly anti-euro or anti-EU, mainly the M5S and the League. Currently in the polls these forces gather at least 40% of the electoral allow. In Spain formations anti-euro have a limited place; even the Catalan independence movement, except for the part of the extreme left, wants to stay in the euro (and of course in the EU).

In Portuguese elections on Sunday 4 October the right coalition has gained 37% against 32.4% for the socialists, but did not reach the quota of 116 deputies, a majority in Parliament. The hope in Berlin of a full confirmation of the austerity policy was partly disappointed. The other two parties in Parliament, the Bloco de Esquerda, backed by Podemos and Syriza, has been quite successful, doubling the seats in parliament with 10.2%, and surpassing the coalition of the Communists and the Greens (8.2 %). It will be difficult to form a government, and some observers believe likely new elections next year. In Spain, most likely the election will give an even more uncertain result. It is not at all sure that the popular conservative Mariano Rajoy will have plurality, but it is sure that he will not have that majority. Austerity, ultimately, in the Iberian Peninsula undergoes difficult times.