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(Bloomberg) -- After six years in office, Spanish Prime Minister Pedro Sanchez is blindsiding executives and investors with policy surprises in the euro area’s most successful major economy.
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The Socialist leader on Saturday pushed out the long-standing executive chairman and chief executive officer of Telefonica SA, Spain’s main telecommunications provider. On Sunday, he stiffened his effort to shut many foreign buyers out of Spain’s property market.
Sanchez is set to arrive at the World Economic Forum in Davos, Switzerland, on Tuesday to make his pitch to the global business elite — buoyed by what’s projected to be the euro area’s fastest-growing big economy for a fourth straight year in 2025.
One of a dwindled number of left-leaning leaders in Europe, Sanchez, 52, is portraying himself as a counterbalance to those aligned with Donald Trump. Yet he’s in a tight spot politically.
Sanchez’s minority coalition has been fragile since its inception in 2023 and the prime minister suffered another setback last week when a Catalan nationalist group withdrew its support, essentially ending his chances of passing a budget for this year. That has fueled speculation that the premier is rolling the dice on his relationship with business to shore up support among his base.
One reason for Sanchez’s move against Telefonica’s Jose Maria Alvarez-Pallete was his frustration with the company for using its publicity budget to advertise in right-wing news outlets, according to people familiar with the matter. The company also advertises in left-leaning media.
Sanchez and his team also view Pallete — the first Telefonica chairman who wasn’t a political appointee — as lacking industrial ambition for Telefonica and believe he didn’t focus enough on technological innovation, according to the people.
Telefonica shares fell as much as 4.3% in Madrid on Monday, making it the worst performer of the Ibex-35 and Stoxx 600 Telecom index.
A government spokesman said Pallete, who had been executive chairman since 2016, was replaced because a revised shareholder structure at Telefonica requires new leadership. Telefonica declined to comment.
The former state-owned monopoly, Spain’s largest company by market value at the start of the century, has dropped out of the top 10, weighed down by leverage, divestments and a drop in its share price.