Schuldschein, a traditional non-listed German type of debt issue, will be made available for Spanish regions in need of a bailout. It could afford Europeans a chance to fix their troubling past relationship of ever riskier borrowing and lending practices.
Market reaction to Spanish sovereign downgrade by the ratings agency may not have shown visible concerns on Thursday, but the credibility of Madrid’s and Berlin’s recovery plans is ebbing away.
The European Stability Mechanism, the euro bailout fund, was designed to avoid a rapidly approaching doomsday scenario. But Germany’s tendency to backtrack in the last moment will only scare investors even more. Market pressure on Madrid is mounting again.
Spain’s largest banks have built up a bigger footprint in Latin America to hedge against recession-hit European markets. Their bet is now paying off. The economies of the region are still expanding.
Luis Martí, former World Bank director, briefs us about the map of a no-one’s land where the Spanish government seems to be wandering in search of Brussels help to face its financial needs.
Investors have responded with interest to some recent capital increase plans and debt sales from large Spanish banks. But it is too early in the year to infer an improvement in perceptions.
What exactly is Germany doing? It may succeed in shying away from the rescue bill now but it risks loosing the euro area market. Economist JP Marín Arrese warns the collapse of the common currency is not far from becoming a very real threat.
The US Federal Reserve can apply monetary measures as often as it wishes, but there is one factor that escapes its command and, nevertheless, stops markets from recovering. It’s called the euro.
From London to Madrid, analysts find there could be a slim chance of Spain avoiding a national rescue. Risk agency S&P agrees. As financial conditions improve for the country, though, bond auctions give only some extra time but not definitive solutions.
BARCELONA | The research analysts at la Caixa remind investors of how comfortably (88.2 percent) euro area debt per GDP compares against US’ over 100 percent and Japan’s over 200 percent. But Europe is too unbalanced to survive as it is.