Madrid is confident that external trade almost alone can make the economy to revive. In truth, the Spanish economy is adjusting. It is fair to say that Spain still has economic muscle, but the real picture isn’t good unless credit flows again.
Over the last month, unemployment in Catalonia grew by 2.19%, while a year ago, in October 2011, it grew by 2.43%.
MADRID | Dumping damaged assets at a price much below accounting value and cumulated provisions will entail large own resources imbalances for the banks taking part in the Sareb bank. JP Marín Arrese is sorry for taxpayers.
The capital requirements of each institution have now been published, but non-performing loans continue to increase sharply. Nevertheless, CaixaBank analysts indicate, the fall in deposits of firms and households is partly due to issuances of commercial paper with more attractive, higher returns.
“To avoid the euro zone spinning out of control, conditions imposed on Spain should be tailored to be fairly met. That inevitably involves further flexibility in its deficit goals,” says economist JP Marín Arrese.
The first 3-year injection auction in November 2011 allowed the Spanish banking to get cheap and long-term funds, which substantially varied its liquidity position. According to AFI analysts, it also limited risks associated with restrictions to renew and issue bank debt and to attract sufficient retail funds to offset the fall in wholesale funding.
VALENCIA | Economist Ernest Sena reveals data of spending rates that tells a different tale about the Spanish regions: they aren’t as wild and rebels as it has been portrayed. But there is a common mistake to all public administrations, which have used budgets like propaganda tools.
How much does ‘different identity’ account in fiscal transfers between regions and their central government? Catalan president Artur Mas mixes tax data with sentimental issues and accusations of mistreatment, says Fernando G. Urbaneja, so a necessary dialogue becomes unnecessarily difficult.
Only when private sector hiring has showed some muscle, public jobs have fallen as a percentage of the total employees in Spain. The country’s public sector needs a downsize, and this should be easy to achieve: free the public administration from party politics interests.
MADRID | The weakness of Oliver Wyman’s Spanish banking test is similar to that of the national budget, economist JP Marín Arrese opines. Without growth, Spain could be rescued only to see risk premiums and credit costs decreasing. The threat of a depression would still loom.