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5 February 2016 Focus Europe: Dark clouds, no storm yet Jpairt Economics Spain update: challenging negotiations We published a Data flash - 'Spain update: challenging negotiations' on 04 February 2016. Here are the key points.: • As expected, on 2 February the King of Spain nominated Sanchez, the leader of the centre-left PSOE, to form a government. • We see two main avenues for Sanchez. Scenario 1: a left-leaning coalition with the support of the Catalan nationalist parties. Scenario 2: a coalition with both Podemos and Citizens. • Were Sanchez to be unsuccessful, we continue to see two main alternatives. Scenario 3: a last-minute temporary agreement among the PP, PSOE and Citizens. Scenario 4: a new election, possibly at the end of June. • Scenario 3 is, in our opinion, the least likely. Scenario 2 seems only marginally more probable than Scenario 3. Hence, this week's events have not changed our view that Scenarios 1 and 4 remain the most likely. But we continue to find it difficult to assess whether the chances of the former are greater than those of the latter. • Still, we continue to think that an early election at a national level is a question of when rather than if. Even if a government is formed, it seems highly likely to be unstable. Passing the annual budget this autumn may be the key hurdle to survival. Click? copy this link info a browser to access the report: http1/2 pulldb.gmreseatch.convp/3016. 3000:89271196/08._Datarlash..2016.02.0-1_090068c08abee551 pdf Marto Su inon. (WA Senior Economist Page 12 Deutsche Bank AG/London CONFIDENTIAL — PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0120368 CONFIDENTIAL SDNY_GM_00266552 EFTA01459722