The government has raised its deficit forecast for this year to 3.6%, thus failing to comply with the objective agreed with the European Commission (2.8%). But Guindos is confident that the Spanish economy will be able to apply an adjustment equivalent to 1.4 percentage points of GDP, over 14 billion euros. But the experts do not believe that the economy can deal with such a large adjustment.
The ECB could end up with a new headache if the euro continues to appreciate as it has done over the last few weeks. In a short space of time, the eurozone currency has gone from 1,08 dollars to 1,14 dollars. Analysts believe Draghi will have to take some kind of action if it goes over 1,15 dollars.
Telefonica’s leadership changes have favoured the company’s stock price. On Wednesday, for the second day in a row, the share price outperformed the Ibex, closing just over the 10 euros level.
Bankia, the lender which had to be bailed-out in 2012 with more than 22 billion euros of taxpayers’ money, is in the news because of the money it has now returned to its minority shareholders. Not for being the Spanish bank which recorded the biggest profits last year.
The demise of Abengoa, the Spanish engineering and renewable energy firm, would have been a massive blow for its creditor banks. So the government and the banks have been working on a solution since the company entered pre-insolvency proceedings. The deal agreed this week hands over the majority of Abengoa’s capital to its creditors.
Almost at the same time as Socialist candidate Pedro Sanchez gave his inaugural speech in Parliament yesterday, Spain’s stock market saw another consecutive increase. It rose over 1.8%, almost its best performance since October. The second day of debate has been closed with a similar level increase: 1.78% up to 8.764,5 points.
Francisco López |The OECD has once again downgraded its outlook for global growth, especially for the Eurozone. It will only grow 1.4% this year, almost half a percentage point less than the previous forecast in November. But is the downwards revision the result of the sharp drop in share prices, or is it the stock market which is in fact anticipating that growth will slow in the coming months?
Bankia’s current management team has decided to give back to minority shareholders the money they invested in the banks’s shares in July 2011 with 1% annual interest. The proposal is a sensible one because it benefits shareholders and tax payers, as well as Bankia’s image and balance sheet.
Bankia, created from the merger of seven savings banks lead by Cajamadrid and Bancaja, and its July 2011 stock market listing, have become a major headache for many people: the bank’s shareholders, the current management team, the auditor, the Bank of Spain and the stock exchange regulatory body CNMV.