By CaixaBank research team, in Barcelona | Tensions in Europe’s sovereign debt markets have grown again, especially in the so-called peripheral economies. Increasing rumours regarding Greek’s possible exit from the euro area have played a significant part. In Spain, this escalation has been sharpened by further capital requirements for banks and the increasingly widespread doubts [...]
S&P: Spain's debt to remain under 80pc of GDP even with €100 more billion
LONDON/MADRID | Ratings agency Standard & Poor's had already added an injection of €80 billion to €120 billion of public money into the banking sector when it downgraded Spain last April 26 to BBB+ with negative outlook. The agency stated this week that even using the total amount of €100 billion, the country's debt per [...]
Spain’s budget is starting to crack
MADRID | First quarter figures showed a marked deterioration in central government finances. Its gap has grown by ¾ as compared to the same period of the previous year, reaching 1.85% in terms of GDP. A most disappointing outcome that undermines firm pledges to slash deficit this year in a substantial way. Claims that more money [...]
Rigid deficit targets only fuel speculative runs
MADRID | The Dutch coalition collapse coupled with the plausible fiscal pact rebuke following the poll outcome in France has severely undermined investors’ confidence. Trust on discipline driven governance in the euro zone is crumbling. Losing in a row two key stalwart bastions of tough budgetary rules has sent shivers to the markets. Further challenges are [...]
Pharmaceutical co-payment: Spanish pensioners charged 10%
By Tania Suárez, in Madrid | One more twist in the reform plans introduced by the Spanish government: time is up for the public health system… again. The vice-president Soraya Sáenz de SantamarÃa said in March that “the matter of the [sanitary] co-payment is not on the table of the Cabinet; it is as simple [...]
Madrid bluffing about leaving the euro may backfire
MADRID | Berlin is utterly bewildered, according to official sources, by the clumsy way Madrid is running its current crisis. A high ranking government representative stunned his German counterparts by openly declaring that Spain would be ready to find its way out of the euro if that was the prize to avoid intervention. He wasn’t bluffing. [...]
Until Spain’s new budget shows austerity muscle, Brussels must tread carefully
By Juan Pedro MarÃn Arrese, in Madrid | Once again Spain is riding the storm. The sharp reduction witnessed in risk premium over the last months is vanishing. A sharp budget deficit coupled with gloomy growth prospects and soaring unemployment rates are melting confidence down. Claims on a rather subdued debt position fail to impress [...]
Madrid plans to streamline public sector seem merely cosmetic
By Juan Pedro MarÃn Arrese, in Madrid | Spain’s government has pledged to close down 80 publicly owned enterprises, an impressive figure at face value. But most of the adjustment is grounded on the simple recipe of merging subsidiaries into mother companies. Thus the only tangible savings amount to allowances paid to suppressed Boards of Directors. [...]
Nordkapp’s Pablo DÃez: “devaluation would be swift, austerity is slow and painful”
By Julia Pastor and Tania Suarez, in Madrid | Pablo DÃez, at Nordkapp’s asset management department argues that implementation of austerity as the only measure to sort the crisis out will bring social chaos in Europe. Yet, DÃez is unsure about how right Spain’s president  Mariano Rajoy is in rejecting the deficit target of 4.4% [...]
What they said when president Rajoy bent the deficit target bar
LONDON | Odd. After months of mild fireworks of demonstrations against austerity throughout Spain, it seems hard to believe that Ambrose Evans-Pritchard, international economics editor at The Daily Telegraph, would be struck. Even president Mariano Rajoy acknowledged that his reform plans for the labour market would probably spark a general strike. But Evans-Pritchard was struck, nevertheless: “In the twenty years [...]
