Something happened Friday September 28. Catalonia sold €2 billion in bonds and Spain’s Treasury minister announced that the regions rescue fund is now open for business to provide capital aid to Barcelona. The central government has a strong case to deactivate the Catalan conflict while reassuring markets with a restructuring plan of the state’s administration.
While national identity tensions belong to an ongoing debate, the fiscal irritation that Catalonia feels can be easily soothed. Madrid must offer a fairer treatment to a region whose economic output sets the best hopes for Spain to exit the crisis.
MADRID | Whereas London has gone to battle in the Scottish independence referendum, Madrid would rather focus on the dire situation of the state finances and a looming rescue when challenged by Catalan independentists. Carlos Díaz Guell believes the Spanish government has no spare strength to spend.
The Catalonian regional government has filed a request for help warning Madrid it will not accept any condition linked to such rescue. For a Cabinet in desperate need of cash to keep running its services, the flat refusal to take on board any tip seems a bit reckless. But it has a trump card in its bid to soften Madrid resistance. It is threatening to trigger a full fledged confrontation…
The new set of rules on restructuring and liquidation of ailing banking institutions planned to be approved next Friday confers full command to the Spanish government. The Bank of Spain will exclusively identify solvency failures and pit in place an early warning mechanism to redress potential deviations. But once public money is involved the task is conferred to a formally independent body, the FROB, but under tight governmental control. Politicians…
Hundreds of thousands of retail investors may share an uncomfortable feeling these days, that of being trapped under their holdings of what once was commercialised as ‘patriotic bonds’. Unloading them is proving a difficult task. While most sovereign and sub-sovereign debt securities in the secondary market move millions of euros, daily trade volumes of short-term paper issued in 2011 and 2012 by Spanish regional governments rarely reach the modest figure of €50,000….
MADRID | Inditex announced this week it signed a letter of intent for the acquisition of 300,000 square metres in Cabanillas, Guadalajara (Spain) in order to expand its logistics capacity. The project is set within the plans of the group’s investment in its facilities in Spain detailed by the chairman Pablo Isla during the general meeting of shareholders held on July 17. Initially, a 70,000 square metre platform for logistics activities is…
MADRID | The chain of default warnings is getting larger. If the regions of Murcia and Catalonia confirm they need help from the €18-billion central fund to repay its debt maturities, as Valencia explicitly did on July 20, the autonomous bailout would reach so far €7.7 billion. Of them, €6 billion could be made available with almost immediate effect, as Loterías del Estado would be the lender. The regions’ short-term…
By Tania Suárez, in Madrid | Things are getting even more difficult in Spain. First, the recently announced measures of adjustment, then the protests from the mining industry and now it is the turn of the Spanish regions. Minister of finance Cristóbal Montoro said that he wouldn’t be as permissive as Brussels has been with Spain; that the government will not extend the period for the regions to achieve the fiscal…
The implications of recent developments in Catalonia's export activity are bound to agitate the political scene of the region more than its economic stand, which remains at a deficit of around €15 billion. According to the statistics institute of the autonomous government, the Generalitat, Catalan exports to non-Spanish markets in 2011 were higher for the first time than those to Spain: the regional department for the Economy said the international trade percentage…