The IMF requested the meeting with Podemos, a source told GlobalCapital, and also requested that officials from the Spanish Treasury be there, to which Podemos did not object.
The source said the meeting in Madrid would be attended by Rosa Sánchez, secretary-general of the Spanish Treasury, and by Eduardo Gutiérrez, a senior economic adviser to Podemos, among others.
The Spanish Treasury at first told GlobalCapital that it could neither confirm nor deny that a meeting was to happen. However, it later said that no representative of the Treasury would be attending a meeting with Podemos.
The IMF did not respond to calls made by GlobalCapital in time for publication.
Eduardo Gutiérrez, the adviser to Podemos, told GlobalCapital Spain's local and regional elections on May 24 had sent a “clear message” to the capital markets and international entities that, by the end of this year, Spain could have a government led or supported by Podemos.
Podemos has radical views on Spain's debt. Gutiérrez said Podemos planned to tell the IMF that Spain, “like most countries in southern Europe”, would not be able to repay its national debt unless it could agree a restructuring plan spanning five to 10 years."
The young political party, born out of anti-austerity protests that began in May 2011, made strong gains in the May elections, although its practice of operating through hundreds of local coalitions makes it hard to put a precise number on the party's result.
Podemos-led coalitions won support in local elections for Spain's two largest cities, Madrid and Barcelona, and are negotiating to form governing coalitions there.
'Repayment rethink'
At the IMF meeting, the party’s economic team will use recent IMF notes criticising “an excess of zeal over deficit targets” to propose that an international discussion is held about the timing of debt repayments, for both sovereign and sub-sovereign borrowers.
“We have to rethink the schedule of repayments, but that’s only the starting point," said Gutiérrez. "The real risk for the international markets is that we keep doing what we are doing now. Investors must be aware that changing the economic system of a country takes years, and here we need to work out how to redirect the economies of several EU member states.”
Italy, Spain and Greece, and perhaps Portugal, should join forces to request a debt rescheduling, he said.
Podemos will also seek extra funds from the European Union, to be invested directly in certain industry sectors. “The monetary union has been badly designed," Gutiérrez said. "Without mechanisms of real fiscal transfers the union’s asymmetries will kill the euro.”
Podemos will push for the EU to make fiscal transfers to financially weaker member states. “We are pro-EU, but our EU has different capital and production structures," he said. "It is time to bail out the people."
Gutiérrez said that, in Podemos’ view, low bond yields had eased financial pressure on the corporate sector, but the public purse should also take advantage while the European Central Bank's quantitative easing programme is in place.
The reaction in Madrid's financial hub has been one of disappointment and rejection, with some accusing Podemos's economic team of fancying themselves as a "bunch of Spanish Varoufakis", in reference to the Greek Finance minister Yanis Varoufakis.
"It just goes to show how, no matter where you look among our politicians, one is bound to find foolish and naive people," an investor said. "The trouble is that the political parties that feel threatened by Podemos are at pains to prove Podemos are not ready to take any serious government responsibility. They would use any mistake to build up scary tales."
A financial analyst said only those with no knowledge of how the markets work would choose to vote Podemos. "And it has shown stronger results precisely in those cities [Madrid and Barcelona] where there is a more business orientated mindset," he added. "It's just baffling!"
In London, a head of SSA syndicate used sharper language to express his views. "Podemos is a joke," he declared. "I can’t see Podemos getting traction or having an impact on the Bonos market, especially since most of the economic figures out of Spain are extremely encouraging."
He said Podemos's options to play any important role after the coming general elections will probably be fewer than they have currently.
"It might not be reflected yet in the polls or the regional elections, because when you do austerity you pay for it in the next election. Having said that, look at the UK — David Cameron was behind austerity but had put back some growth and look what happened. If the ruling party in Spain can show what they’ve done for the economy then maybe they can change the polls before the general election."
He explained that, for the moment, there is no market impact from Podemos. Spain’s bond issue this week was trading around mid-swaps plus 100bp on Thursday, which is 20bp tighter than where it was priced on Tuesday.
