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Spanish economy 18th April 2012

Will rubber-stamping bank plans convince the markets? Spain needs growth

MADRID | The Bank of Spain has cleared the plans presented by financial institutions to meet the demanding requirements designed to clean up real estate exposure. As expected, extra needs fall short by 10% to the €50 billion that the government forecast when launching the reform in February. Considerable adjustments undertaken at last year close have eased up the pending effort. Will this encouraging result calm down market concern? There is…

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Spanish economy 17th April 2012

Deutsche Bank: Spain will grow next year, never mind deficit targets

MADRID | Deutsche Bank analysts said that Spain will grow again from 2013, even though the country will not meet the current deficit targets. Spain will this year miss the 5.3% set by Brussels and will not be until 2014, a year later than planned, when the imbalance will be reduced to 3% of GDP. In a note published Tuesday and reported by El Economista, the bank’s experts explained that Spain…

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Spanish economy 16th April 2012

Rajoy’s bitterness at being treated like Zapatero

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…

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Spanish economy 12th April 2012

What the Spanish president said to his MPs …and to Mario Monti

His words appeared today scattered everywhere accompanied by odd yet expressive pictures, undoubtedly making for fitting material in the euro peripheral saga. He would have reaffirmed a commitment to abide by a deficit target that was negotiated rather than agreed with the European Commission, most accounts tell us, and scolded some his outspoken neighbours in a tit-for-tat monologue. Since Spain’s president Mariano Rajoy talked on Wednesday to his People’s Party parlamentary group,…

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Spanish economy 10th April 2012

Spain excludes the wealthy from public health services: a useless measure

MADRID | Spain’s minister of Economy Luis de Guindos suggested, almost announced, without giving away much detail immediate reforms in health care and public education to adjust the final accounts of the State. The new austerity measures are meant to touch the very nerve in public spending since both departments sum up to one third of total government spending, apart from the pension system that belongs to another cash register. The…

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Spanish economy 9th April 2012

A government with bad temper in Spain

MADRID | Governments become arrogant over time and the more arrogantly they behave, the worse they do their job. Indeed, arrogance is usually a bad influence, as it leads to confusion and errors. Former president of Catalonia and an old hand in Spanish politics, Jordi Pujol, in his latest memoirs wrote of former Spain’s presidents that José María Aznar’s political ambition dwindled away because of his pride and Rodríguez Zapatero’s did so…

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Spanish economy 2nd April 2012

In defence of Spain’s 2012 budget

MADRID | Elvira Rodríguez, who chairs the Spanish parliamentary committee on Economy and Competitiveness, and is a former State secretary for Budget and Expenditure, had two words to say about the government’s public budget: rigour and responsibility. Rodríguez published Monday an op-ed in the business daily Cinco Días, probably in advance of the heaviest wave of criticism that the country’s budget plans have had to endure during the last decade. She…

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Spanish economy 2nd April 2012

Spain’s Budget less daunting than expected

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…

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Spanish economy 2nd April 2012

Trick or treat: the Spanish budget

By Luis Arroyo, in Madrid | Spain’s 2012 budget brings a contraction in public spending of €18 billion and an increase in taxes of €9 billion, both items totaling €27 billion, which would put central government deficit at 3.5%. To reach the pursued 5.3%, the rest of the effort corresponds to the autonomous regional governments, not exactly the most successful part of the public administration in matters regarding austerity. In addition,…

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Spanish economy 30th March 2012

Why such a fuss about Spain’s budget?

By Juan Pedro Marín Arrese, in Madrid | The Spanish government will unveil today its budget bill for 2012. In the good old days, analysts and observers bent over its pages to find the clues for public sector priorities in the year. Nowadays you can dispose of such a demanding task. Brussels has unravelled its complexity, reducing the whole exercise to the simplistic aim to meet, no matter how, the deficit…