Spain’s foreign investment appeal is under threat

Significance Spain’s increasingly protectionist regulatory environment, and proposed tax and labour reforms, threaten to discourage investment. The foreign-owned automotive sector, which accounts for roughly 10% of GDP, is a source of particular concern. Impacts The ability to continue attracting FDI will be crucial for Spain’s economic recovery. The magnitude of the economic crisis may force the left-wing coalition to water down its changes to the 2012 labour reforms. Tourism and property will be among those sectors disproportionately affected by the ongoing uncertainty.