Spanish government borrowing costs continued to moderate this week, the latest consumer price index figures showed a downward trend without being full-on deflationary, and the country posted a trade surplus of around €600 million, prompting a practically giddy reaction from Economy Minister Luis de Guindos. Mr De Guindos cited the trade figures as evidence of “the economy’s transformation”. There are three ways to look at this. The first is that the economy minister is a sentimental sort of fellow whose exuberance errs a tad on the side of irrationality. The second is that there has been a transformation but – ask any of the six million unemployed – not a positive one. And the … [Read more...] about Tales for Tapas: Irrational exuberance
economy
Spain’s Socialists are desperate for new blood
Close to 18 months after its catastrophic general election defeat, the Socialist Party remains further away from power than ever. Opinion polls have it trailing behind a Popular Party that has pushed through unprecedented austerity measures that only seem to deepen the recession, while Prime Minister Mariano Rajoy, who has broken every electoral pledge he made, now admits that there will be no improvement in the economy until at least 2016. Unemployment continues to rise, and the health and education systems are being dismantled before our eyes. And that’s without going into the Bárcenas corruption allegations. The ideal conditions, surely, for the Socialist Party to launch a sustained … [Read more...] about Spain’s Socialists are desperate for new blood
Beyond their ken?
"To a herd of rams, the ram the herdsman drives each evening into a special enclosure to feed and that becomes twice as fat as the others must seem to be a genius. And it must appear an astonishing conjunction of genius with a whole series of extraordinary chances that this ram, who instead of getting into the general fold every evening goes into a special enclosure where there are oats- that this very ram, swelling with fat, is killed for meat". - Tolstoy, ‘War & Peace’. After so many false dawns, the recent announcement by Spain's Prime Minister Mariano Rajoy that the government was revising down its 2013 economic forecast hardly caused a blink among a citizenry that is now … [Read more...] about Beyond their ken?
Has Spain’s economic contraction become self-perpetuating?
Spain’s political leaders are in cheerful mood at the moment. According to the country’s Economy Minister Luis de Guindos, the Spanish economy will return to growth in the second half of 2013. “The perception of the Spanish economy has improved and will continue to do so over the coming weeks and months,” he told his audience at the World Economic Forum in Davos. Earth-shattering it will not be, but grow it will, he insisted. Perhaps, he suggested, the economy will be stationary in the third quarter, with very slight growth in the fourth. And quite possibly he is right. The core of the problem is whether any faltering growth emerging in the last three months of the year will be sustained … [Read more...] about Has Spain’s economic contraction become self-perpetuating?
Mariano Rajoy
To his supporters he’s calm, considered, strategic and resilient. But to his critics – whose ranks have swelled this year – Spain’s prime minister is hesitant, rigid, poorly advised and uncharismatic. Whatever your view, few will argue that even his previous experience as a government minister and eight years in opposition can have prepared Mariano Rajoy adequately for the torrid 12 months he has just had. Having made few electoral promises other than to fix the economy, his fortunes were always going to mirror those of the country’s credit risk premium and its jobless queue. Both hit dangerously high levels in 2012, belying Rajoy’s apparent belief on taking office that a change of … [Read more...] about Mariano Rajoy
Juan Manuel Sánchez Gordillo
For some, the answer to the economic crisis is austerity. For others it is credit, or job creation. For the mayor of the Andalusian town of Marinaleda, direct action is the most apt response. In the summer, Sánchez Gordillo and fellow members of the SAT labour union grabbed the headlines by organising “food grabs” in two supermarkets. Activists carted food out of the shops without paying, insisting it would be donated to local charities. Sánchez Gordillo saw this as a symbolic move to illustrate the extent of Spain’s troubles and he also led a series of protest marches and squats on unused land across the south. In Marinaleda itself, the bearded, charismatic mayor claims to have established … [Read more...] about Juan Manuel Sánchez Gordillo
Pound falls as UK faces triple-dip recession
Welcome to the Pure FX account of the latest changes in the euro exchange rate. This is intended as a brief guide to movements in the euro this week, to put you in the best position for when you exchange currencies. Latest exchange rate changes GBPEUR: 1.2527 to 1.2443 (-0.671%) GBPUSD: 1.5989 to 1.5875 (-0.713%) EURUSD: 1.2762 to 1.2758 (-0.031%) The pound lost out to both the euro and US dollar this week, putting an end to three weeks of gains against the common currency, as the Bank of England warns the UK faces a possible triple-dip recession in 2013. This pound loss came in spite of the fact that, meanwhile, the Eurozone officially entered recession this week, contracting … [Read more...] about Pound falls as UK faces triple-dip recession
Pound hits three week high as UK expands 1.0% in Q3
Welcome to the Pure FX account of changes in the euro exchange rate, covering the 19th to 26th of October 2012. This is intended as a brief guide to movements in the euro this week, to put you in the best position for when you exchange currencies. Latest exchange rate changes Pound to euro: Last week: 1.2276 Today: 1.2457 Increase: +1.474% Pound to US dollar: Last week: 1.6038 Today: 1.6108 Increase: +0.436% Euro to US dollar: Last week: 1.306 Today: 1.2925 Decrease: –1.034% The UK pound reversed a four-month decline against the euro this week, gaining almost two cents against the common currency. This takes sterling back to a level we last saw in early October, when … [Read more...] about Pound hits three week high as UK expands 1.0% in Q3
Has Rajoy turned the corner? Of course he hasn’t
In the lead-up to the weekend’s elections in Galicia and the Basque Country, it was striking how much attention was focused on the former. The Galician vote, we were repeatedly told by both the international and Spanish media, will reflect widespread discontent at Mariano Rajoy’s economic policy. But the result saw Rajoy’s Partido Popular (PP) maintain its majority and increase its share of seats. What are we to make of this if we believe the previews that presented Galicia as a faithful representation of Spain as a whole? Is Rajoy bouncing back? Of course he isn’t. The central government in Madrid is still in as much difficulty as it was before the Galician election and Rajoy’s … [Read more...] about Has Rajoy turned the corner? Of course he hasn’t
Land and liberty
It may be a slow summer; it may be that the world’s media can’t get enough bad news from Spain as the country sinks deeper into depression. In such a context, news editors are particularly susceptible to stories about latter-day Robin Hoods. Which is what Juan Manuel Sánchez Gordillo, the Communist Party mayor for the last 33 years of Marinaleda, a village near Seville, has been gleefully dubbed after he and groups from the Andalusian Workers’ Union that he helped found went into two supermarkets in early August and made off with trolleys of basic foodstuffs that they said they were going to distribute among unemployed agricultural labourers. Speaking to journalists after he and his … [Read more...] about Land and liberty