MADRID: The rise of far-left party Podemos in Spain along with Catalonia's separatist drive is unsettling investors who fear the country could change course in a "Greek-style scenario" after upcoming elections.
Spain, the fourth-biggest economy in the euro area, returned to growth in 2014 after five years of decline. Consumer spending is up, exports have jumped and manufacturing output has increased.
The government forecasts an economic expansion of 3.3 percent this year -- more than twice the average growth rate predicted for eurozone countries.
But analysts warn the recovery could be derailed if Podemos does well in December's general election and pro-secession parties win a majority in the Catalan parliament in a September 27 regional vote.
"Investors are really afraid of a Greek-style scenario," said Credit Agricole analyst Leopold Jouven. "That a radical left party comes to power and nips the recovery in the bud by trying to change everything."
Podemos, which is close to Greece's hard-left Syriza party and has around 16 percent support, wants to loosen the grip of austerity introduced by Prime Minister Mariano Rajoy's conservative government, in power since 2011.
After local elections in May, Podemos allied itself with the main opposition Socialists to drive Rajoy's Popular Party from power in several regions and cities, including Madrid and Barcelona.
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