Those involved in guiding the recovery of the Spanish banking industry must be recalibrating their future options in the wake of the recent nationalisation of Banco Financiero y de Ahorros and the panic that ensued amongst the retail shareholders of their subsidiary – Bankia.
Absolutely true to recent form, a week ago Tuesday the two immediately upcoming Spanish government bond auctions which were to lead up to the weekend’s municipal and regional elections were put into journalistic – and might we add – speculative play by an article in one of the world’s news sources of reference.
Once again, the Spanish economy is under pressure from the markets. But while comparing the country to Ireland may be unjustified, the government’s reluctance to send a clear message can only encourage speculators.
The generous employment contracts enjoyed by many of those taking part in the September 29 general strike leave a generation of Spaniards out in the cold, drawing the question: who do these protesters represent?
The Spanish government has passed legislation permitting the cajas de ahorros, many of which are in financial difficulties, to turn to normal capital markets to bolster their balance sheets. The legislation challenges a number of received notions about the country’s financial sector.
Portugal, Italy, Greece and Spain have all been grouped together by some market watchers as potentially unstable economies due, supposedly, to their deficit and debt levels. But a closer look at the figures tells a different story.