Escenarios Regionales

Reflecting on the world of today

Posts tagged spain

59 notes &

fotojournalismus: Fascists and far right wing supporters wearing pre-constitutional flags salute the fascist anthem outside the Opera House during an act against the independence of Catalonia and to remember former Spanish Dictator Gen. Francisco Franco on the 37th anniversary of his death, in Madrid on Nov. 25, 2012. Voters in Catalonia begin casting their ballots in regional elections that could determine the future shape of Spain. If voters give the regional government strong support, its leader pledged to hold a referendum asking Catalans if they’d prefer to split from Spain and go it alone in the 27-member EU. [Credit : Daniel Ochoa de Olza/AP]

fotojournalismus:

Fascists and far right wing supporters wearing pre-constitutional flags salute the fascist anthem outside the Opera House during an act against the independence of Catalonia and to remember former Spanish Dictator Gen. Francisco Franco on the 37th anniversary of his death, in Madrid on Nov. 25, 2012. Voters in Catalonia begin casting their ballots in regional elections that could determine the future shape of Spain. If voters give the regional government strong support, its leader pledged to hold a referendum asking Catalans if they’d prefer to split from Spain and go it alone in the 27-member EU.

[Credit : Daniel Ochoa de Olza/AP]

Filed under spain europe referendum politics European Union

100 notes &

fotojournalismus: Saul Gabarri Valdes, 7, cries amidst the remains of his home after it was demolished at the Spanish gypsy settlement of Puerta de Hierro, in the outskirts of Madrid November 20, 2012. Fifty-four families have been living in Puerta de Hierro, on the banks of the Manzanares river for over 50 years. Since the summer of 2010, the community has been subject to evictions on the grounds that the dwellings are illegal. Families, whose homes have been demolished, move in with relatives whose houses still remain while the debris keeps piling up around them as more demolitions take place. [Credit : Susana Vera/Reuters]

fotojournalismus:

Saul Gabarri Valdes, 7, cries amidst the remains of his home after it was demolished at the Spanish gypsy settlement of Puerta de Hierro, in the outskirts of Madrid November 20, 2012. Fifty-four families have been living in Puerta de Hierro, on the banks of the Manzanares river for over 50 years. Since the summer of 2010, the community has been subject to evictions on the grounds that the dwellings are illegal. Families, whose homes have been demolished, move in with relatives whose houses still remain while the debris keeps piling up around them as more demolitions take place.

[Credit : Susana Vera/Reuters]

Filed under spain europe

25 notes &

Our digital society is inflicting a Copernicus-like, far-reaching change in the structures of contemporary liberal democracies and the media as we know it. It is impossible and unnecessary to adopt defensive attitudes towards that change, even if we certainly know that the transition will be both difficult and painful.

Spain’s current media landscape is worrisome, mainly because of the economic crisis and the fast introduction of new technologies. In the last five years, the Spanish newspapers have cut more than 12% of its circulation and ad sales have plummeted 50%. Painful restructurings have resulted in 6,000 layoffs.

Such has been the collapse that we may well suspect that we are bottoming out. We face an absolutely necessary disruptive process that we have to endure in order to survive. It is impossible for me to predict the survival of newspapers as we know them, but in any case, people will always need the kind of “person that explains to the people what happens to other people.”

via fjp-latinamerica:

Juan Luis Cebrián, president of PRISA, in a thoughful op-ed published TODAY in El Huffington Post (in Spanish!). 

More important, however, is the fact that PRISA, the largest media company in the global Spanish-speaking market, owns the influential Spanish newspaper El País.

Why? Because ironically enough, El País announced TODAY that it will fire workers and cut salaries next week (too much of a coincidence, maybe?). Via Reuters:

PRISA has not said how many workers will go, but local media said more than a quarter of the paper’s staff could be forced out.

“We can’t keep living so well,” PRISA Chairman Juan Luis Cebrián told staff on Friday, in comments published by the workers’ committee of the left-leaning paper, Spain’s best-read generalist daily.

One of the paper’s journalists, Carlos Cue, said on Twitter it was the “worst day in the history of El País”.

PRISA has made cuts across its various outlets, including business daily Cinco Días and radio station Cadena Ser. This latest round of cash-saving measures will be formalized on Tuesday.

The programme includes firing workers, early retirement for some and reducing salaries. Across the Spanish media, the average journalist’s salary has halved since the onset of the country’s financial crisis.

Furthermore, in a report by El Economista (Spanish news website, not associated with The Economist in any way), Cebrián is quoted saying that:

It is worrying that the median age [at El País] is 53 years old (189 staffers are older than 50 while only 10 are younger than 30), and that hinders our capabilities to achieve what we need in order to survive.

FJP: Politicians tend to leak newsworthy stories to journalists on Fridays in order to dissipate the buzz throughout the weekend. TODAY, regrettably, the news broke from within and everyone in the newsroom is concerned.  

Follow FJP Latin America: Tumblr | Twitter | Facebook.

(via futurejournalismproject)

(via futurejournalismproject)

Filed under Spain europe media

78 notes &

breakingnews: Anti-austerity protests rock Spain, Portugal NBC News: Tens of thousands of people in both Spain and Portugal took to the streets Saturday to protest against austerity cuts. In Spain protesters marched on Parliament in Madrid for the third time this week. Spain has the highest unemployment rate of any of the countries on the Euro. A retired banker in Portugal said the country’s budget cuts are making Portugal’s economy worse than ever before. Many young Portuguese are moving abroad to make a living. Photo: Protestors shout slogans as they fill up Neptuno Square during a demonstration against government austerity measures in Madrid. (Sergio Perez / Reuters)

breakingnews:

Anti-austerity protests rock Spain, Portugal

NBC News: Tens of thousands of people in both Spain and Portugal took to the streets Saturday to protest against austerity cuts.

In Spain protesters marched on Parliament in Madrid for the third time this week. Spain has the highest unemployment rate of any of the countries on the Euro.

A retired banker in Portugal said the country’s budget cuts are making Portugal’s economy worse than ever before. Many young Portuguese are moving abroad to make a living.

Photo: Protestors shout slogans as they fill up Neptuno Square during a demonstration against government austerity measures in Madrid. (Sergio Perez / Reuters)

Filed under spain Portugal Europe Austerity measures Euro crisis Protests

1 note &

Spanish PM rejects Catalan calls for greater tax powers Move could push north-eastern region towards demanding independence as polls show separatist support climbing The Spanish prime minister, Mariano Rajoy, roundly rejected attempts by the Catalan government to win greater tax-raising powers on Thursday‚ potentially pushing the wealthy north-eastern region towards demanding independence. Afterwards the Catalan regional leader, Artur Mas, said: “A historic opportunity has been lost.” Mas was expected to return to Catalonia and decide within weeks on a date for fresh regional elections which are likely to see his nationalist Convergence and Union coalition run on a more openly separatist programme, as polls show support for independence climbing above 50%. A separatist majority in the Catalan parliament would provoke a constitutional crisis as Spain tries to cope with double-dip recession, 25% unemployment and, potentially, a bailout by fellow eurozone countries. Mas wanted a change in the tax system as a step towards increasing tax flows into Catalonia. It would have seen the Catalan government collecting taxes and sending a share to central government, rather than the other way around. “The prime minister opposed the proposal … because it is incompatible with the Spanish constitution,” Mr Rajoy’s office said in a statement. Mas disagreed. “You cannot hold the constitution up as a wall,” he said, claiming it had been written in the shadow of General Francisco Franco’s dictatorship and at a time of fear of military coups. Spain’s 1978 constitution does not provide for the independence of Catalonia or any other region. Pictured: Marchers wave Catalonian nationalist flags on Catalan National Day in Barcelona. Photograph: Albert Gea/REUTERS

Spanish PM rejects Catalan calls for greater tax powers

Move could push north-eastern region towards demanding independence as polls show separatist support climbing

The Spanish prime minister, Mariano Rajoy, roundly rejected attempts by the Catalan government to win greater tax-raising powers on Thursday‚ potentially pushing the wealthy north-eastern region towards demanding independence.

Afterwards the Catalan regional leader, Artur Mas, said: “A historic opportunity has been lost.” Mas was expected to return to Catalonia and decide within weeks on a date for fresh regional elections which are likely to see his nationalist Convergence and Union coalition run on a more openly separatist programme, as polls show support for independence climbing above 50%.

A separatist majority in the Catalan parliament would provoke a constitutional crisis as Spain tries to cope with double-dip recession, 25% unemployment and, potentially, a bailout by fellow eurozone countries.

Mas wanted a change in the tax system as a step towards increasing tax flows into Catalonia. It would have seen the Catalan government collecting taxes and sending a share to central government, rather than the other way around.

“The prime minister opposed the proposal … because it is incompatible with the Spanish constitution,” Mr Rajoy’s office said in a statement. Mas disagreed. “You cannot hold the constitution up as a wall,” he said, claiming it had been written in the shadow of General Francisco Franco’s dictatorship and at a time of fear of military coups.

Spain’s 1978 constitution does not provide for the independence of Catalonia or any other region.

Pictured: Marchers wave Catalonian nationalist flags on Catalan National Day in Barcelona. Photograph: Albert Gea/REUTERS

Filed under spain europe separatism

1 note &

Catalonia unable to fund its social services Catalonia has indicated it will join Valencia and Murcia in asking the government for loans from a regional bailout fund The Catalan government on Tuesday said it is unable to pay this month’s bills for privately managed hospitals, old people’s homes and disabled centres, blaming Spain’s central government for its financial problems. “Liquidity for these payments depends on them,” said Francesc Homs, spokesman for the Barcelona-based government. “They should meet their obligations, and they are not doing so.” Regional governments provide health, education and social services and jointly account for almost 40% of Spain’s public spending. Catalonia, one of Spain’s wealthier regions, has outsourced management of almost half of its hospital services and much of its care for the disabled and elderly. Several old people’s homes were reported to have lodged a court writ demanding immediate payment. Late payment of July’s bills will also apply to some 700 privately managed, but state-funded, schools – though teachers salaries are not affected. The Catalan administration boycotted a meeting between the Spanish government and regional finance chiefs. At the meeting budget minister Cristóbal Montoro was expected to try to force regional finance chiefs to stick to a joint deficit target of 1.5% this year. “It doesn’t make sense to attend a meeting where everything is already decided,” said Homs. Catalonia has indicated it will join Valencia and Murcia in asking the government for money from a new regional bailout fund for financing deficits and refinancing existing debt. Regional leaders were waiting to hear exactly what conditions the government would attach to loans from the fund – which will probably include more austerity and a tighter rein from Madrid. Pictured: Calella de Palafrugell, Costa Brava, Catalonia, the Spanish region has run out of money to pay for social services. Photograph Alamy

Catalonia unable to fund its social services

Catalonia has indicated it will join Valencia and Murcia in asking the government for loans from a regional bailout fund

The Catalan government on Tuesday said it is unable to pay this month’s bills for privately managed hospitals, old people’s homes and disabled centres, blaming Spain’s central government for its financial problems.

“Liquidity for these payments depends on them,” said Francesc Homs, spokesman for the Barcelona-based government. “They should meet their obligations, and they are not doing so.”

Regional governments provide health, education and social services and jointly account for almost 40% of Spain’s public spending. Catalonia, one of Spain’s wealthier regions, has outsourced management of almost half of its hospital services and much of its care for the disabled and elderly. Several old people’s homes were reported to have lodged a court writ demanding immediate payment.

Late payment of July’s bills will also apply to some 700 privately managed, but state-funded, schools – though teachers salaries are not affected.

The Catalan administration boycotted a meeting between the Spanish government and regional finance chiefs.

At the meeting budget minister Cristóbal Montoro was expected to try to force regional finance chiefs to stick to a joint deficit target of 1.5% this year. “It doesn’t make sense to attend a meeting where everything is already decided,” said Homs.

Catalonia has indicated it will join Valencia and Murcia in asking the government for money from a new regional bailout fund for financing deficits and refinancing existing debt.

Regional leaders were waiting to hear exactly what conditions the government would attach to loans from the fund – which will probably include more austerity and a tighter rein from Madrid.

Pictured: Calella de Palafrugell, Costa Brava, Catalonia, the Spanish region has run out of money to pay for social services. Photograph Alamy

Filed under spain europe Eurozone financial crisis

0 notes &

Eurozone bank bailout deal throws lifeline to Spain and Italy Italy and Spain stunned Germany by blocking progress until they obtained softer bailout rules in 14 hours of bad-tempered talks European leaders have pulled back from the brink of disastrous failure in their attempts to rescue the euro, throwing a lifeline to the weakest links in the eurozone by agreeing to shore up struggling banks directly, remove disadvantages for private creditors and move quickly towards a new supervisory regime for banks. David Cameron said on Friday: “The countries of the eurozone did take some important steps forward last night. There’s still important work to do.” Amid bad-tempered talks that continued through the night, Italy and Spain stunned the Germans by blocking progress on an overall deal at a two-day EU summit in Brussels until they obtained guarantees that the eurozone would act to cut the soaring costs of their borrowing. The tough negotiations were deadlocked for hours, prompting the departure from the summit after midnight of the 10 non-euro countries, including Britain, leaving the eurozone leaders to fight it out. After 14 hours of wrangling, they emerged with a three-point statement rewriting the rules for the eurozone’s new bailout regime in a way likely to soften the draconian terms that have accompanied the rescue programmes for Greece, Portugal, and Ireland over the past two years. The leaders said a new eurozone banking supervisory system should be established by the end of the year. Once it is operational, the eurozone’s new permanent bailout fund, the European Stability Mechanism, would be able to recapitalise failing banks directly, without the loans going via governments as at present and adding to national debt burdens. The shift had been demanded particularly by Mariano Rajoy, the prime minister of Spain. The new supervisory system is likely to come under the authority of the European Central Bank. Under plans being mooted, the new banking regime is to entail pooling eurozone liability for guaranteeing savers’ deposits and a common resolution fund for winding up bad banks. But the statement mentioned neither of these two points, which are controversial in Germany, which is reluctant to accept responsibility for the conduct of other countries. The statement added that in drawing up the terms for up to €100bn (£80bn) for Spanish banks, private creditors would enjoy the same status as the bailout fund in the event of a debt rescheduling. Previously the fund enjoyed “seniority” over private investors. Herman Van Rompuy, the European Council president who chaired the fractious summit, described the agreement as a breakthrough. “We are opening possibilities for countries that are well-behaving to make use of financial stability instruments in order to reassure markets and get again some stability around some of the sovereign bonds of our member states,” he said. Pictured: German chancellor Angela Merkel arrives for day two of the summit in Brussels on Friday. Photograph: John Thys/AFP/Getty Images

Eurozone bank bailout deal throws lifeline to Spain and Italy

Italy and Spain stunned Germany by blocking progress until they obtained softer bailout rules in 14 hours of bad-tempered talks

European leaders have pulled back from the brink of disastrous failure in their attempts to rescue the euro, throwing a lifeline to the weakest links in the eurozone by agreeing to shore up struggling banks directly, remove disadvantages for private creditors and move quickly towards a new supervisory regime for banks.

David Cameron said on Friday: “The countries of the eurozone did take some important steps forward last night. There’s still important work to do.”

Amid bad-tempered talks that continued through the night, Italy and Spain stunned the Germans by blocking progress on an overall deal at a two-day EU summit in Brussels until they obtained guarantees that the eurozone would act to cut the soaring costs of their borrowing.

The tough negotiations were deadlocked for hours, prompting the departure from the summit after midnight of the 10 non-euro countries, including Britain, leaving the eurozone leaders to fight it out.

After 14 hours of wrangling, they emerged with a three-point statement rewriting the rules for the eurozone’s new bailout regime in a way likely to soften the draconian terms that have accompanied the rescue programmes for Greece, Portugal, and Ireland over the past two years.

The leaders said a new eurozone banking supervisory system should be established by the end of the year. Once it is operational, the eurozone’s new permanent bailout fund, the European Stability Mechanism, would be able to recapitalise failing banks directly, without the loans going via governments as at present and adding to national debt burdens. The shift had been demanded particularly by Mariano Rajoy, the prime minister of Spain.

The new supervisory system is likely to come under the authority of the European Central Bank. Under plans being mooted, the new banking regime is to entail pooling eurozone liability for guaranteeing savers’ deposits and a common resolution fund for winding up bad banks. But the statement mentioned neither of these two points, which are controversial in Germany, which is reluctant to accept responsibility for the conduct of other countries.

The statement added that in drawing up the terms for up to €100bn (£80bn) for Spanish banks, private creditors would enjoy the same status as the bailout fund in the event of a debt rescheduling. Previously the fund enjoyed “seniority” over private investors.

Herman Van Rompuy, the European Council president who chaired the fractious summit, described the agreement as a breakthrough.

“We are opening possibilities for countries that are well-behaving to make use of financial stability instruments in order to reassure markets and get again some stability around some of the sovereign bonds of our member states,” he said.

Pictured: German chancellor Angela Merkel arrives for day two of the summit in Brussels on Friday. Photograph: John Thys/AFP/Getty Images

Filed under spain italy europe Eurozone financial crisis bail out

0 notes &

Spain´s leader warns nation may not be able to borrow much longer MADRID — Paying ever-higher rates to borrow money, Spain may not be able to finance itself much longer through debt, the country’s prime minister warned Wednesday. It was the clearest indication yet that his country may need an even bigger rescue than a European bailout already slated for its banks. Although fellow government ministers have hinted at such, Prime Minister Mariano Rajoy’s comments before parliament marked his first and most direct admission that Spain is close to being locked out of capital markets. The interest rate Madrid pays to borrow using short-term bonds nearly tripled at an auction a day earlier. “We can’t keep funding ourselves for too long at the prices we’re currently paying,” Rajoy told lawmakers on the eve of a crucial European Union summit that begins Thursday in Brussels. Spanish lawmakers also debated whether to raise property, sales and energy taxes to close the budget gap. Rajoy’s comments suggest that Spain’s financial woes go well beyond its troubled banks, which are burdened by unpaid property loans left over from its housing bubble. The country’s borrowing costs have soared in the last several weeks after Spain requested a loan from fellow European nations to aid its banks, as investors have come to realize the negative effect that helping hand would have on Madrid’s books. Spain’s budget deficit was 8.9% of the country’s gross domestic product last year, nearly three times what EU rules allow. Rajoy has pledged to cut the deficit down to the required limit of 3% of GDP by the end of next year, but the International Monetary Fund has said that looks unlikely. Rajoy told parliament he would push fellow leaders in Brussels to allow aid to go directly to troubled Spanish banks to ensure the European loan would not exacerbate the government’s debt load. But finance ministers of the Eurozone, made up of the 17 nations that share the euro currency, rebuffed that suggestion Wednesday, issuing a statement saying “the Spanish government will remain fully liable” for the loan. Germany in particular has insisted that Rajoy’s administration be held accountable for loan repayment. Pictured: Spanish Prime Minister Mariano Rajoy speaks during a session of parliament in Madrid on Wednesday. Credit: Andres Kudacki / Associated Press

Spain´s leader warns nation may not be able to borrow much longer

MADRID — Paying ever-higher rates to borrow money, Spain may not be able to finance itself much longer through debt, the country’s prime minister warned Wednesday. It was the clearest indication yet that his country may need an even bigger rescue than a European bailout already slated for its banks.

Although fellow government ministers have hinted at such, Prime Minister Mariano Rajoy’s comments before parliament marked his first and most direct admission that Spain is close to being locked out of capital markets. The interest rate Madrid pays to borrow using short-term bonds nearly tripled at an auction a day earlier.

“We can’t keep funding ourselves for too long at the prices we’re currently paying,” Rajoy told lawmakers on the eve of a crucial European Union summit that begins Thursday in Brussels. Spanish lawmakers also debated whether to raise property, sales and energy taxes to close the budget gap.

Rajoy’s comments suggest that Spain’s financial woes go well beyond its troubled banks, which are burdened by unpaid property loans left over from its housing bubble. The country’s borrowing costs have soared in the last several weeks after Spain requested a loan from fellow European nations to aid its banks, as investors have come to realize the negative effect that helping hand would have on Madrid’s books.

Spain’s budget deficit was 8.9% of the country’s gross domestic product last year, nearly three times what EU rules allow. Rajoy has pledged to cut the deficit down to the required limit of 3% of GDP by the end of next year, but the International Monetary Fund has said that looks unlikely.

Rajoy told parliament he would push fellow leaders in Brussels to allow aid to go directly to troubled Spanish banks to ensure the European loan would not exacerbate the government’s debt load.

But finance ministers of the Eurozone, made up of the 17 nations that share the euro currency, rebuffed that suggestion Wednesday, issuing a statement saying “the Spanish government will remain fully liable” for the loan. Germany in particular has insisted that Rajoy’s administration be held accountable for loan repayment.

Pictured: Spanish Prime Minister Mariano Rajoy speaks during a session of parliament in Madrid on Wednesday. Credit: Andres Kudacki / Associated Press

Filed under spain europe financial crisis Eurozone

0 notes &

Eurozone four leaders agree economic growth package Leaders of the eurozone’s four biggest nations have agreed in principle to measures to boost growth equal to 1% of the currency area’s economic output. Germany, France, Italy and Spain outlined plans to push for a 130bn-euros (£104bn; $163bn) package. But analysts suggest that with little or no new money involved, the significance of the agreement between the four was more symbolic than actual. There is also still no consensus on issues such as common eurobonds. “We want there to be a significant European growth package,” said Italian PM Mario Monti. He appeared at the press conference alongside Spanish PM Mariano Rajoy, German Chancellor Angela Merkel and French President Francois Hollande. The four met in Rome ahead of an EU summit on the euro crisis next week. The growth package is expected to comprise several measures already in the works to boost spending on infrastructure and other investments, backed by European taxpayer money: Increasing the capital of the European Investment Bank by 10bn euros, which would enable the EU government-backed institution to increase its lending capacity by several times that amount; Fully deploying unused money in the European Commission’s regional funds; The creation of pan-European “project bonds” - common debts used to finance specific investment projects such as the construction of pan-european transport networks. The agreement may represent a political victory for the recently elected French president, who has demanded a growth pact despite strong reservations expressed by his Germany counterpart. Pictured:The four leaders also agreed to push for a pan-European tax on financial transactions

Eurozone four leaders agree economic growth package

Leaders of the eurozone’s four biggest nations have agreed in principle to measures to boost growth equal to 1% of the currency area’s economic output.

Germany, France, Italy and Spain outlined plans to push for a 130bn-euros (£104bn; $163bn) package.

But analysts suggest that with little or no new money involved, the significance of the agreement between the four was more symbolic than actual.

There is also still no consensus on issues such as common eurobonds.

“We want there to be a significant European growth package,” said Italian PM Mario Monti.

He appeared at the press conference alongside Spanish PM Mariano Rajoy, German Chancellor Angela Merkel and French President Francois Hollande.

The four met in Rome ahead of an EU summit on the euro crisis next week.

The growth package is expected to comprise several measures already in the works to boost spending on infrastructure and other investments, backed by European taxpayer money:

  • Increasing the capital of the European Investment Bank by 10bn euros, which would enable the EU government-backed institution to increase its lending capacity by several times that amount;
  • Fully deploying unused money in the European Commission’s regional funds;
  • The creation of pan-European “project bonds” - common debts used to finance specific investment projects such as the construction of pan-european transport networks.

The agreement may represent a political victory for the recently elected French president, who has demanded a growth pact despite strong reservations expressed by his Germany counterpart.

Pictured:The four leaders also agreed to push for a pan-European tax on financial transactions

Filed under europe Eurozone germany spain italy france financial crisis

1 note &

Spain issues dramatic messages of impending eurozone doom Spain’s foreign minister, José Manuel García-Margallo, said the EU’s future would be played out in days or perhaps even hours A panicky Spanish government issued dramatic messages of impending doom for the eurozone on Thursday as its borrowing costs reached unsustainable levels and foreign minister José Manuel García-Margallo claimed that the EU may need to act within hours. “The future of the European Union will be played out in the next few days, perhaps in the coming hours,” he said, according to Spanish press reports. The foreign minister, who was speaking as Spain’s long-term borrowing costs hit an unsustainable 7%, warned that other European countries would suffer dreadfully if they let Spain fall. ”If the Titanic sinks, it takes everyone with it, even those travelling in first class,” he said, in a warning clearly aimed at Germany and other eurozone countries. The interest rate on the country’s benchmark 10-year bonds briefly hit 7% on Thursday, its highest level since the country joined the euro in 1999, after the ratings agency Moody’s downgraded Spain’s sovereign debt to just one grade above ”junk” status. Moody’s said the downgrade was due to the offer from eurozone leaders of up to €100bn (£81bn) to Spain to prop up its failing banking sector adding considerably to the government’s debt burden. García-Margallo’s comments contrasted with those of finance minister Luis de Guindos, who called for calm during an inevitably volatile period while Europe prepares to make key decisions on its future and waits to see how Greece votes on Sunday. “It is not a situation that can be maintained over time … and I am convinced that we will continue to take more measures in the coming days and weeks to help bring it down,” De Guindos told reporters, referring to Spain’s borrowing costs, after senior cabinet members had met prime minister Mariano Rajoy. Government sources said that the EU president Herman von Rompuy was set to meet Rajoy, Germany’s Angela Merkel, Italy’s Mario Monti and Frrance’s François Hollande in a five-way meeting during the G20 meeting in Mexico on Monday. Barack Obama, who has been pressuring eurozone countries to act quickly in order to sort out the debt crisis, was also expected to meet the five leaders in Mexico. David Cameron may also join the meeting. Pictured: Spanish foreign minister José Manuel García-Margallo warned other European countries would suffer dreadfully if they let Spain fall. Photograph: Eraldo Peres/AP

Spain issues dramatic messages of impending eurozone doom

Spain’s foreign minister, José Manuel García-Margallo, said the EU’s future would be played out in days or perhaps even hours

A panicky Spanish government issued dramatic messages of impending doom for the eurozone on Thursday as its borrowing costs reached unsustainable levels and foreign minister José Manuel García-Margallo claimed that the EU may need to act within hours.

“The future of the European Union will be played out in the next few days, perhaps in the coming hours,” he said, according to Spanish press reports.

The foreign minister, who was speaking as Spain’s long-term borrowing costs hit an unsustainable 7%, warned that other European countries would suffer dreadfully if they let Spain fall. ”If the Titanic sinks, it takes everyone with it, even those travelling in first class,” he said, in a warning clearly aimed at Germany and other eurozone countries.

The interest rate on the country’s benchmark 10-year bonds briefly hit 7% on Thursday, its highest level since the country joined the euro in 1999, after the ratings agency Moody’s downgraded Spain’s sovereign debt to just one grade above ”junk” status.

Moody’s said the downgrade was due to the offer from eurozone leaders of up to €100bn (£81bn) to Spain to prop up its failing banking sector adding considerably to the government’s debt burden.

García-Margallo’s comments contrasted with those of finance minister Luis de Guindos, who called for calm during an inevitably volatile period while Europe prepares to make key decisions on its future and waits to see how Greece votes on Sunday.

“It is not a situation that can be maintained over time … and I am convinced that we will continue to take more measures in the coming days and weeks to help bring it down,” De Guindos told reporters, referring to Spain’s borrowing costs, after senior cabinet members had met prime minister Mariano Rajoy.

Government sources said that the EU president Herman von Rompuy was set to meet Rajoy, Germany’s Angela Merkel, Italy’s Mario Monti and Frrance’s François Hollande in a five-way meeting during the G20 meeting in Mexico on Monday.

Barack Obama, who has been pressuring eurozone countries to act quickly in order to sort out the debt crisis, was also expected to meet the five leaders in Mexico. David Cameron may also join the meeting.

Pictured: Spanish foreign minister José Manuel García-Margallo warned other European countries would suffer dreadfully if they let Spain fall. Photograph: Eraldo Peres/AP

Filed under spain europe European Union Eurozone financial crisis bail out

7 notes &

EU, Germany exploring Spanish rescue, no request yet (Reuters) - Germany and European Union officials are urgently exploring ways to rescue Spain’s debt-stricken banks although Madrid has not yet requested assistance and is resisting being placed under international supervision, European sources said on Wednesday. Spain, the euro zone’s fourth biggest economy, said on Tuesday it was effectively losing access to credit markets due to prohibitive borrowing costs and appealed to European partners to help revive its banks. The European Central Bank dashed investors’ hopes of an easing of monetary policy or another flood of cheap liquidity for banks despite saying that the euro zone money market has again become “dysfunctional”. The ECB left interest rates on hold at 1 percent at its monthly meeting. The move raised pressure on EU political leaders to outline a solution to the bloc’s festering debt crisis at a summit later this month. Spanish Economy Minister Luis de Guindos said after talks at the European Commission on Wednesday there were no immediate plans to apply for a bailout. Spain would await the results of an IMF report and an independent audit of the banking sector, both due this month, before taking decisions on how to recapitalize the banks, he said. ECB President Mario Draghi said financial markets were not wrong to be worried about the future of the euro zone but they underestimated the political commitment backing the single currency. He welcomed EU leaders’ agreement to step up work on a long-term vision for a full economic and monetary union. “Some of the problems in the euro area have nothing to do with monetary policy,” he told a news conference. “I don’t think it is right for monetary policy to fill other institutions’ lack of action.” Acknowledging that the rate-setting governing council’s decision was not unanimous, he said “a few members, I would say not many” had wanted a rate cut on Wednesday. Asked whether the central bank would take supportive action if the EU summit agreed to move towards a fiscal and banking union, he said there was no such “horse-trading” but the ECB would monitor developments and stood ready to act. Pictured: A Spanish flag flies above the Bank of Spain in Madrid, June 6, 2102. Credit: Reuters/Paul Hanna

EU, Germany exploring Spanish rescue, no request yet

(Reuters) - Germany and European Union officials are urgently exploring ways to rescue Spain’s debt-stricken banks although Madrid has not yet requested assistance and is resisting being placed under international supervision, European sources said on Wednesday.

Spain, the euro zone’s fourth biggest economy, said on Tuesday it was effectively losing access to credit markets due to prohibitive borrowing costs and appealed to European partners to help revive its banks.

The European Central Bank dashed investors’ hopes of an easing of monetary policy or another flood of cheap liquidity for banks despite saying that the euro zone money market has again become “dysfunctional”. The ECB left interest rates on hold at 1 percent at its monthly meeting.

The move raised pressure on EU political leaders to outline a solution to the bloc’s festering debt crisis at a summit later this month.

Spanish Economy Minister Luis de Guindos said after talks at the European Commission on Wednesday there were no immediate plans to apply for a bailout. Spain would await the results of an IMF report and an independent audit of the banking sector, both due this month, before taking decisions on how to recapitalize the banks, he said.

ECB President Mario Draghi said financial markets were not wrong to be worried about the future of the euro zone but they underestimated the political commitment backing the single currency. He welcomed EU leaders’ agreement to step up work on a long-term vision for a full economic and monetary union.

“Some of the problems in the euro area have nothing to do with monetary policy,” he told a news conference. “I don’t think it is right for monetary policy to fill other institutions’ lack of action.”

Acknowledging that the rate-setting governing council’s decision was not unanimous, he said “a few members, I would say not many” had wanted a rate cut on Wednesday.

Asked whether the central bank would take supportive action if the EU summit agreed to move towards a fiscal and banking union, he said there was no such “horse-trading” but the ECB would monitor developments and stood ready to act.

Pictured: A Spanish flag flies above the Bank of Spain in Madrid, June 6, 2102. Credit: Reuters/Paul Hanna

Filed under spain europe germany european union eurozone financial crisis bail out

5 notes &

Eurozone crisis: Spanish fears send euro near to two-year low against dollar Currency hit as concerns grow about solvency of Spanish banks and central bank governor reveals decision to step down early The euro sank to a near two-year low against the dollar on Tuesday amid worries about the solvency of Spanish banks, and as the governor of the country’s central bank quit. The single currency fell below $1.25 after rating agency Egan-Jones cut the country’s credit rating. Against the pound it was worth 79.95p. Miguel Ángel Fernández Ordóñez, governor of the Bank of Spain, will step down on 10 June, a month earlier than expected, the central bank said. The decision came amid fierce criticism from the ruling People’s party over the central bank’s role in failing to deal quickly enough with the toxic real estate problems of Spanish banks. The government has invited external auditors to value bank assets, in effect bypassing the central bank. The government is expected to ask central bank board member Luis María Linde to take over. Spain’s borrowing costs are near euro-era records amid worries about when the country will recover from its second recession in three years and start cutting its 24% unemployment rate. Retail sales fell 9.8% in April compared with March, figures showed on Tuesday. It was the biggest monthly drop since the statistical series began in 2003, underlining the impact of government austerity measures. Sales in April were 11.3% lower year on year. Spain’s leading Ibex 35 share index fell 2.3% to 6,251.70. Troubled lender Bankia sank 16.3% after several brokers cut their ratings on the stricken bank, which had tumbled 13% on Monday after its €23.5bn (£18.8bn) rescue announced on Friday. As markets fretted about Spain, policymakers in Brussels struggled to reach a consensus on how to tackle the crisis. The European commission is to deliver economic and fiscal policy prescriptions for the eurozone countries on Wednesday amid intense speculation that Spain will need to be given a longer and looser timeframe for budget deficit reduction. With Ireland voting in a referendum on the eurozone’s German-pushed fiscal pact on Thursday, Spain’s growing banking predicament, and Greece’s standoff with Brussels deepening with elections less than three weeks away, Wednesday’s verdict from the commission is anxiously awaited by governments and the markets. The air of last-minute uncertainty was heightened when commission officials admitted they had no idea when the results of the scrutiny of national budget figures and the resulting policy recommendations would be revealed. Pictured: Bank of Spain governor Miguel Angel Fernández Ordóñez. Photograph: Susana Vera/Reuters

Eurozone crisis: Spanish fears send euro near to two-year low against dollar

Currency hit as concerns grow about solvency of Spanish banks and central bank governor reveals decision to step down early

The euro sank to a near two-year low against the dollar on Tuesday amid worries about the solvency of Spanish banks, and as the governor of the country’s central bank quit. The single currency fell below $1.25 after rating agency Egan-Jones cut the country’s credit rating. Against the pound it was worth 79.95p.

Miguel Ángel Fernández Ordóñez, governor of the Bank of Spain, will step down on 10 June, a month earlier than expected, the central bank said.

The decision came amid fierce criticism from the ruling People’s party over the central bank’s role in failing to deal quickly enough with the toxic real estate problems of Spanish banks. The government has invited external auditors to value bank assets, in effect bypassing the central bank. The government is expected to ask central bank board member Luis María Linde to take over.

Spain’s borrowing costs are near euro-era records amid worries about when the country will recover from its second recession in three years and start cutting its 24% unemployment rate. Retail sales fell 9.8% in April compared with March, figures showed on Tuesday. It was the biggest monthly drop since the statistical series began in 2003, underlining the impact of government austerity measures. Sales in April were 11.3% lower year on year.

Spain’s leading Ibex 35 share index fell 2.3% to 6,251.70. Troubled lender Bankia sank 16.3% after several brokers cut their ratings on the stricken bank, which had tumbled 13% on Monday after its €23.5bn (£18.8bn) rescue announced on Friday.

As markets fretted about Spain, policymakers in Brussels struggled to reach a consensus on how to tackle the crisis. The European commission is to deliver economic and fiscal policy prescriptions for the eurozone countries on Wednesday amid intense speculation that Spain will need to be given a longer and looser timeframe for budget deficit reduction.

With Ireland voting in a referendum on the eurozone’s German-pushed fiscal pact on Thursday, Spain’s growing banking predicament, and Greece’s standoff with Brussels deepening with elections less than three weeks away, Wednesday’s verdict from the commission is anxiously awaited by governments and the markets.

The air of last-minute uncertainty was heightened when commission officials admitted they had no idea when the results of the scrutiny of national budget figures and the resulting policy recommendations would be revealed.

Pictured: Bank of Spain governor Miguel Angel Fernández Ordóñez. Photograph: Susana Vera/Reuters

Filed under spain europe financial crisis Eurozone