MADRID | First quarter figures showed a marked deterioration in central government finances. Its gap has grown by ¾ as compared to the same period of the previous year, reaching 1.85% in terms of GDP. A most disappointing outcome that undermines firm pledges to slash deficit this year in a substantial way. Claims that more money has been pumped to regional authorities, pensions and unemployment benefits appear as futile excuses. For…
The financial City of Madrid welcomed El País’ redundancy plans to improve the balance sheet of the best-selling newspaper in Spain. Investor reports on Wednesday warned that the adjustment in personnel could affect a sizeable number of jobs, but it was necessary to confront the loss of 51pc of accumulated advertising income since 2007. In 2011, the drop in advertisement contracts was of -15pc. Analysts at ACF remarked that the company…
By Carlos Díaz Guell, in Madrid | Global foreign direct investment flows in 2011 increased by 17% year on year, recovering pre-crisis levels. Spain also regained investment flows into equity last year, with a rise in total net investment (total minus divestiture) of 18.2% year on year that reached 1.8% of GDP. Some aspects of this foreign direct investment figure in Spain are worth commenting. For instance, the growth rate was positive…
International Financial Analysts Afi brought to our attention this chart from 2011 financial accounts in Spain, which confirm that ratio of gross debt (loans and different security prices) of households and businesses in Spain has dropped by 13.5 percentage points of GDP. The figure is now 216pc, down from the maximum levels reached during the second quarter in 2010. It also reflects the downturn in indebtedness operations during last year,…
MADRID | The Spanish government has good reasons to feel irritated at the Bank of Spain’s erratic conduct. It has endorsed bank plans to meet the reform targets without raising any objection. Yet, it has failed to provide any credible explanation on how credit institutions might raise €45 billion in the coming months. Taking for granted that Santander, BBVA and CaixaBank will easily achieve their required €10 billion provisioning, that leaves…
By Carlos Díaz Guell, in Madrid | No one in Spain is going to make it easy for the Rajoy government. Policy reforms and budget cuts undertaken by the cabinet, although considered timid and inadequate by many, will inevitably leave a number of victims in the ditches and they don’t seem willing to let this occur without doing anything against it. The business sectors (most of them) affected by constrictions in public spending…
By Luis Arroyo, in Madrid | At FTAlphaville there recently was talk about the Spanish banking system. Sí, that particular banking system that, according to the Bank of Spain governor Fernández Ordóñez, has fixed itself without the nation’s Treasury putting any euro at all. The answers to questions like who ordered him to say this, and what for, when everybody knows and complains about public capital injections in our banks are…
By Tania Suárez, in Madrid | One more twist in the reform plans introduced by the Spanish government: time is up for the public health system… again. The vice-president Soraya Sáenz de Santamaría said in March that “the matter of the [sanitary] co-payment is not on the table of the Cabinet; it is as simple and crystal clear as that.” In Spain, the pensioners did not have to pay for…
By Olivier Longué, director general at Acción Contra el Hambre | Spain remains a country that invests in solidarity, even in times of economic distress. Its citizens have given ample evidence of this in recent years, both here in Spain as during the crises that took place outside our borders (Horn of Africa or Haiti). The Spanish people do not seem readily willing to sacrifice the possibility of a better world despite the…
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…