MADRID | The new team in power in Spain never thought they could one day being mercilessly mauled by markets as the previous government was. Spanish Conservatism was supposed to stand as a safe harbour in a euro zone vastly dominated by fellow political parties. Swift implementation of sweeping reforms, coupled with an extremely tight budget, was expected to act as a powerful lever to winch up ailing credibility. And yet, Madrid…
MADRID | Berlin is utterly bewildered, according to official sources, by the clumsy way Madrid is running its current crisis. A high ranking government representative stunned his German counterparts by openly declaring that Spain would be ready to find its way out of the euro if that was the prize to avoid intervention. He wasn’t bluffing. On Monday this week he presented PM Rajoy and ministers in charge of economic matters…
MADRID | People at command in Madrid seem baffled by the massive onslaught inflicted on the economy. A steeply rising risk premium coupled with the severe battering the stock market is receiving have dampened any hope to steer out of trouble with minor collateral damage. The dream of a soft landing has switched into the nightmare of plausible intervention. Fear to fall in that abyss has materialised in a rather hectic…
MADRID | Spain seems crippled by mounting economic woes. It faces a steep rise in risk premium fuelled by plunging confidence on its ability to reverse the bleak outlook ahead. Recession takes its toll in terms of higher unemployment, budgetary deviations and extensive deterioration in the banking sector. Reforms undertaken so far have failed to deliver any tangible benefit. Labour market overhaul has only helped to accelerate lay-offs, with no impact…
MADRID | The Spanish government claims the 2012 budget to be the toughest ever. On face value it embodies a 2.5% GDP deficit reduction, an awesome effort by any standard. Slashing expenditure amounts to two thirds of the squeeze, the rest falling on tax adjustments. Will budgetary crunch depress activity or axe main spending policies? A closer look dispels any anxiety over these daunting effects. Many of the cuts come…