deficit target

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Spain’s interest payments on public debt are lower than in the 1990s

By CaixaBank research team, in Barcelona | Tensions in Europe’s sovereign debt markets have grown again, especially in the so-called peripheral economies. Increasing rumours regarding Greek’s possible exit from the euro area have played a significant part. In Spain, this escalation has been sharpened by further capital requirements for banks and the increasingly widespread doubts as to whether the fiscal deficit targets will be met, particularly after the upward revision…


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S&P: Spain’s debt to remain under 80pc of GDP even with €100 more billion

LONDON/MADRID | Ratings agency Standard & Poor's had already added an injection of €80 billion to €120 billion of public money into the banking sector when it downgraded Spain last April 26 to BBB+ with negative outlook. The agency stated this week that even using the total amount of €100 billion, the country's debt per GDP ratio would be 76.6 percent in 2014. S&P said there would be no further…


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Spain’s budget is starting to crack

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…


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Rigid deficit targets only fuel speculative runs

MADRID | The Dutch coalition collapse coupled with the plausible fiscal pact rebuke following the poll outcome in France has severely undermined investors’ confidence. Trust on discipline driven governance in the euro zone is crumbling. Losing in a row two key stalwart bastions of tough budgetary rules has sent shivers to the markets. Further challenges are expected to materialise as the austerity overdose dents popular support for governments at pains to…


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Pharmaceutical co-payment: Spanish pensioners charged 10%

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…


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Madrid bluffing about leaving the euro may backfire

MADRID | Berlin is utterly bewildered, according to official sources, by the clumsy way Madrid is running its current crisis. A high ranking government representative stunned his German counterparts by openly declaring that Spain would be ready to find its way out of the euro if that was the prize to avoid intervention. He wasn’t bluffing. On Monday this week he presented PM Rajoy and ministers in charge of economic matters…


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Until Spain’s new budget shows austerity muscle, Brussels must tread carefully

By Juan Pedro Marín Arrese, in Madrid | Once again Spain is riding the storm. The sharp reduction witnessed in risk premium over the last months is vanishing. A sharp budget deficit coupled with gloomy growth prospects and soaring unemployment rates are melting confidence down. Claims on a rather subdued debt position fail to impress markets. Fear that financial situation might end up in a plight is deeply ingrained. Worries…


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Madrid plans to streamline public sector seem merely cosmetic

By Juan Pedro Marín Arrese, in Madrid | Spain’s government has pledged to close down 80 publicly owned enterprises, an impressive figure at face value. But most of the adjustment is grounded on the simple recipe of merging subsidiaries into mother companies. Thus the only tangible savings amount to allowances paid to suppressed Boards of Directors. A negligible €1 million cut off that will add very little in terms of budgetary…


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Nordkapp’s Pablo Díez: “devaluation would be swift, austerity is slow and painful”

By Julia Pastor and Tania Suarez, in Madrid | Pablo Díez, at Nordkapp’s asset management department argues that implementation of austerity as the only measure to sort the crisis out will bring social chaos in Europe. Yet, Díez is unsure about how right Spain’s president  Mariano Rajoy is in rejecting the deficit target of 4.4% this year. Do you think it would have been ‘suicidal’ to commit Spain to Brussels’…


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What they said when president Rajoy bent the deficit target bar

LONDON | Odd. After months of mild fireworks of demonstrations against austerity throughout Spain, it seems hard to believe that Ambrose Evans-Pritchard, international economics editor at The Daily Telegraph, would be struck. Even president Mariano Rajoy acknowledged that his reform plans for the labour market would probably spark a general strike. But Evans-Pritchard was struck, nevertheless: “In the twenty years or so that I have been following EU affairs closely, I cannot remember such a…