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Spanish economy 6th June 2012

Spanish proposal to inject capital directly into troubled entities wins support

By Julia Pastor, in Madrid | The solution proposed by the Spanish president Mariano Rajoy to inject capital directly into troubled entities, with no need of intervening the whole of the countries' economy is gaining momentum. It was the International Monetary Fund the first organisation which gave a boost to the idea when its managing director, Christine Lagarde, assured that Spain did not require a rescue. Last week, Mario Draghi’s…

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Spanish economy 1st June 2012

We are not short of arguments in Spain, yet delivery fails

MADRID | We have a case for demanding some support in resisting the current run on us, our most solid argument being that something nasty might happen to the euro should we fall in the abyss. The one based on the merits of performing our homework seems less convincing. For all the reforms undertaken, we still have a long way to go in redressing a dismal record. Sheer lack of money…

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Spanish economy 31st May 2012

Audit companies in Spain increase turnover exceeding €2.8 billion

MADRID | The turnover of audit firms in Spain increased by 2.2% in 2011 to over 2.8 billion, thus extending the trend of steady moderate growth in the previous two years. Tax and legal advice, and corporate finance experienced a more dynamic activity level, while the audit and consulting areas grew by 1%. A study of the sector published by DBK showed that audit firms managed to increase its sales in 2011,…

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Spanish economy 31st May 2012

A bank managed by politicians is an economic aberration

VALENCIAPLAZA.COM | Víctor Alvargonzález is executive director at financial advisor firm Profim. Alvargonzález points at the root of all Bankia’s problems: in his opinion, a bank managed was destined to become a systemic disaster waiting to happen. He believes Spain’s finances hurt more from lack of credibility than soundness, though. Is it time to avoid the Ibex for a while? We have been sort of avoiding the Spanish market for over…

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Spanish economy 30th May 2012

Spain’s main political parties come together against the European rescue option

By Julia Pastor, in Madrid | Contrary to what might be assumed, on Wednesday Spanish politics answer to the EU was strong despite the severe turbulences affecting the country’s financial system: the argument is that it does not need to rescued, but its debt needs to be guaranteed. President Mariano Rajoy and the opposition leader, the Socialist Alfredo Pérez Rubalcaba, agreed to hold this position together in order to “defend the…

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Spanish economy 30th May 2012

Setting BANKIA as the standard for provisioning might lead to disaster

MADRID | Bankia’s Chairman brilliant performance in transforming the hole he found in his company as an opportunity to ransack the public coffers, has turned him in government’s shadow financial policy maker. His recipe to cure banking ills will receive little praise in economic circles. But it sounds extremely simple and effective. Writing down bad loans resorting to taxpayers’ money amounts to a rather dull endeavour. Bur indulging in such…

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Spanish economy 23rd May 2012

Is Spain’s risk premium being exaggerated? Yes, say the big companies

By Julia Pastor, in Madrid | Report and counter-report, this seems to be the general trend in talking about the Spanish economy’s health. Wednesday it was the CEEC’s occasion to present a report. The nation-wide competitiveness council integrated by presidents of the big Spanish multinationals assured that “expected losses in the the banking sector are limited. Since 2007, the industry has assumed €190 billion of them, including implications from last…

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Spanish economy 18th May 2012

Bureaucracy, taxes and regulation keep Spanish companies too small

By CaixaBank research team, in Barcelona | The average size of Spanish firms is smaller than that of other countries with a similar degree of development. According to the Central Company Directory, at 1 January 2011, out of the total 3.25 million firms in Spain, 99.9% were small and medium-sized enterprises; that is, they employed fewer than 250 salaried workers. Micro-enterprises with fewer than 10 salaried employees accounted for 95.2%…

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Spanish economy 18th May 2012

If you sow doubts you are bound to harvest uncertainty

MADRID | The Spanish financial system badly needs to get equipped with a survival kit. Not only has it been left stranded in a highly hostile territory. Its guide and guardian may have developed a rare taste for inflicting damage on it. There can be no other plausible clue to explain the Economy minister’s statement at the outcome of the last Ecofin meeting. He flatly acknowledged  there were good reasons to…

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Spanish economy 16th May 2012

What is the European Central Bank waiting for?

MADRID | Risk premium is attaining no-return levels. But this time any prospect of bailing out either Spain or Italy seems utterly out of reach. The EU rescue fund simply lacks enough muscle. Its depleted coffers are unable to provide any sustainable respite to the on-going crisis. Even if it had the money, it is highly questionable it would thwart the current wild burst of uncertainty now raging on uncontrollably across…