MADRID (Reuters) – Mariano Rajoy thought he could pull Spain out of economic crisis by sticking close to fellow conservative Angela Merkel.
But six months after he was elected prime minister the German chancellor’s slow-motion approach has let him down; Spain’s banks look in need of international rescue, state funding costs are near unaffordable, Spanish stocks are down a quarter and Rajoy’s party is sinking fast in the opinion polls.
MADRID (Reuters) – Prime Minister Mariano Rajoy is pressing for a direct European rescue for Spain’s banks with moral support from the European Commission, but Germany appeared to rule out such a “bailout lite” for the euro zone’s fourth biggest member.
A source with knowledge of the matter said Madrid is working along with European institutions to find a way to directly refinance banks using rescue funds without the government having to come under a full EU/IMF adjustment program.
MADRID (Reuters) – Spain will put forward a three-year plan to control central government spending, covering 2012-2014, when it presents a draft budget to Congress in the coming months, a government source told Reuters on Tuesday.
Spain is trying to control three areas of spending, at the central government level, the 17 autonomous regions and social security after missing the 2011 budget deficit target by a large margin. The deficit was 8.9 percent instead of 6.0 percent.
MADRID, May 25 (Reuters) – Financial troubles at a big
Spanish bank and one of the country’s richest regions,
Catalonia, piled on problems on Friday for the Madrid government
and for investors who question whether it can pay its debts
without help from euro zone allies.
Bankia SA, Spain’s fourth biggest bank and newly
nationalised, asked for a bailout of 19 billion euros ($24
billion) to repair losses caused by a burst property bubble, a
financial sector source said – more than double what the finance
minister said just days ago would be the least that was needed.
May 25 (Reuters) – Central banks and companies not bracing
for a possible Greek euro exit would be making a grave error,
Belgium’s foreign minister said on Friday, rattling markets
already alarmed by Spain’s deteriorating finances.
Greek elections are due on June 17 and could hasten the
country’s departure from the currency club should a government
intent on ripping up the country’s bailout programme result.
Polls suggest the outcome is too tight to call.
MADRID, May 25 (Reuters) – Spain’s wealthiest autonomous region, Catalonia, needs financing
help from the central government because it is running out of options for refinancing debt this
year, Catalan President Artur Mas said on Friday.
“We don’t care how they do it, but we need to make payments at the end of the month. Your
economy can’t recover if you can’t pay your bills,” Mas told a group of reporters from foreign
MADRID (Reuters) – Spain’s prime minister voiced concern on Wednesday about the state’s ability to finance itself as fears mounted over a spread of the euro zone debt crisis from Greece and a nationalised bank delayed publishing accounts amid talk of it needing more aid.
With creditors spooked by Greece’s difficulties further east along the Mediterranean, the cost of borrowing for Mariano Rajoy’s government hit 6.5 percent on benchmark 10-year bonds, more than 500 basis points above German debt and a record in the 13 years the two states have shared the common currency.
MADRID, May 16 (Reuters) – Spain faces trouble financing
itself as its borrowing costs shoot up, Prime Minister Mariano
Rajoy said on Wednesday, underscoring the widening impact of the
euro zone crisis sparked by Greece’s political stalemate.
“It’s a difficult and complicated situation. The risk
premium has risen a lot and that means that it is difficult to
finance yourself at a reasonable price,” Rajoy told reporters in
the hallways of Parliament on Wednesday morning.
MADRID (Reuters) – Hoping to put an end to a four-year banking crisis, Spain’s government effectively took over Bankia SA (BKIA.MC: Quote, Profile, Research, Stock Buzz), one of the country’s biggest banks, late on Wednesday after days of market anxiety over the lender’s viability.
The centre-right government of Prime Minister Mariano Rajoy told Spaniards the banking sector was safe and said more measures to strengthen ailing lenders would come on Friday.
MADRID/ROME (Reuters) – The election of Francois Hollande in France gives the leaders of struggling southern European countries a new ally in their effort to temper the German-led drive for rigid austerity that has exacerbated their economic woes.
Socialist Hollande’s victory breaks up the centre-right tandem of his predecessor Nicolas Sarkozy and Germany’s Angela Merkel, whose European fiscal pact demanded deep spending cuts in Italy, Spain, Portugal and Greece.