spain economy
Euro up as Spain, Italy take a stand
That, at least, is the takeaway from yesterday’s EU summit, in which Spain and Italy won significant concessions to keep themselves solvent, only by telling Germany they would block “everything” unless immediate steps were taken to help them. Does it sound professional? No. But insofar as Mariano Rajoy and Mario Monti were desperate, it probably doesn’t matter. Moreover, the panicked tactics of the Spanish and Italian premiers have provided the breakthrough the markets were looking for. On Friday, the euro climbed 1.00% against the pound and US dollar and, compared to the brief rally that followed Spain announcing its bailout, this one looks set to last. “At last,” the markets are saying, … [Read more...] about Euro up as Spain, Italy take a stand
Spain’s true crisis isn’t economic, it’s institutional
As Spain has moved closer to what looks increasingly like economic disaster, there have been a couple of surprising - even heartening - moves by the country’s senior politicians lately. One was the announcement made by Socialist leader Alfredo Pérez Rubalcaba that his party offered its full support to the conservative government going into the key European summit in Brussels on June 28. This rare instance of political unity was accompanied by an unusual show of stark public honesty by Prime Minister Mariano Rajoy. “We can’t finance ourselves at these levels of interest much longer,” said the man who had denied that Spain would request a bank bailout days before it did so, and who said he … [Read more...] about Spain’s true crisis isn’t economic, it’s institutional
Bailout? What bailout?
“It’s not a bailout…it’s a credit line with very favourable conditions.” (Luis de Guindos.) “It’s a victory for the euro…If we hadn’t done what we have done in the past five months, the result would have been a bailout of the kingdom of Spain.” (Mariano Rajoy.) You’d hardly imagine, from listening to Spain’s prime minister and his economy minister, that the country has joined the list of nations that are receiving rescue packages from the European Union. Offering up to €100 billion for a banking sector crippled by toxic assets is clearly a major step for the EU, although whether it’s the “victory” Mariano Rajoy talks about is still uncertain. One thing the EU’s fourth bailout has … [Read more...] about Bailout? What bailout?
Bankia and the blame game
The news that former Prime Minister José Luis Rodríguez Zapatero is writing a book about his two terms in office in which he will be “critical of himself, but not others,” according to people close to him, stuck out like a sore thumb given that in Spanish politics, apportioning blame currently seems to be as much a priority as finding solutions to the crisis. Whether Zapatero does manage to criticise only himself in his book is another matter, but if not, plenty of others are quite happy to point the finger at him. Last week, Economy Minister Luis de Guindos echoed the Partido Popular-led government’s regular complaint that it inherited an economy in tatters from the Socialists, this … [Read more...] about Bankia and the blame game
Profile: Esperanza Aguirre, Spain’s very own iron lady
Never one to miss the chance of a headline, last week Esperanza Aguirre, the Popular Party’s head of the regional government of Madrid, aroused the ire of Catalans and Basques when she called for the Copa del Rey soccer final to be played behind closed doors, “somewhere else”, rather than in the Spanish capital. Why? The likelihood of whistling and booing by fans of the two sides, Barcelona and Athletic Bilbao, during the playing of the Spanish national anthem, as happened when the two sides faced each other three years ago in the final, in Valencia. In the event, Aguirre took a rain check on the match, leaving Prince Felipe to stand stoically through the national anthem amid the catcalls … [Read more...] about Profile: Esperanza Aguirre, Spain’s very own iron lady
Rajoy’s labyrinth
When looking back on the first five months of Spanish Prime Minister Mariano Rajoy’s government, it’s hard to recall many striking images of the man. That’s probably because he is so studiously media-shy, giving as few press conferences as he possibly can, and leaving most major policy announcements to his number two, Soraya Sáenz de Santamaría. But while Rajoy has been typically low-key during his opening spell in office, events have not and a couple of moments from those rollercoaster first months do stick in the mind, telling us apparently contradictory things about the man. One is his comment to his Finnish counterpart, Jyrki Katainen, back in January, that the labour reform he was … [Read more...] about Rajoy’s labyrinth
Bankia: A tale of confusion, conflict and unnecessary haggling
Measured from the close of May 7 - the day Bankia’s president Rodrigo Rato announced his resignation - through noon of Thursday the 18, when its shares hit a low of €1.17, Bankia shed no less than 48 percent of its value. Adding to this the 40 percent lost since the July 2011 initial public offering through early May (this perfectly in line with the average euro zone bank over the period, by the way) and the hoards of retail depositors cajoled into parting with their savings in order to subscribe to the IPO by their local bank managers, we’re looking at just shy of a 70-point loss in a bit over eight months. It wasn’t intended to turn out that way. When Banco Financiero y de Ahorros (BFA) … [Read more...] about Bankia: A tale of confusion, conflict and unnecessary haggling
Education strike highlights Spain’s teaching problem
Tuesday’s nationwide education strike included representatives from all levels of the sector, marking the first time such an action had been staged in Spain. The strike was propelled by the austerity measures affecting the sector. These include up to €3 billion cuts in spending, the addition of two hours to teachers' weekly classroom timetable and an increase in the pupil-classroom maximum ratio, currently at 25 in primary level and 30 in secondary. Early reports suggested a good level of support among teaching staff. However, while unions claimed an 80-percent turnout, as expected, government figures were decidedly lower. A more pressing question to ask about Tuesday's action, … [Read more...] about Education strike highlights Spain’s teaching problem
Spain’s “technically impossible” euro exit
Spanish Prime Minister Mariano Rajoy, his Economy Minister Luis de Guindos, and Finance Minister Cristóbal Montoro, have all been asked to respond to Nobel laureate Paul Krugman’s recent comments regarding what he called eurodämmerung: the end of the single currency. Unsurprisingly, they all repeated their commitment to the single currency, saying that Spain would not require a bailout, and that the spending cuts would continue. But like guilty men giving away what is really on their minds, all three went further, insisting that Spain would remain in the eurozone, and that a corralito was a “technical impossibility.” Corralito is a dreaded word in Spain, associated with the chaos that … [Read more...] about Spain’s “technically impossible” euro exit