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Apr 16, 2012
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Repsol has to fight Argentina’s oily expropriation

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By Fiona Maharg-Bravo and Kevin Allison
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Argentina’s leftist government is taking control of YPF, the oil and gas company 57 percent owned by Repsol of Spain. Worse, the state is nationalizing only Repsol’s shares. Stakes owned by Argentina’s Petersen Group, and other minorities, will escape the expropriation.

It’s not yet clear what price Argentina will pay for the shares, but given that a state tribunal will decide, it’s safe to assume Repsol will get a raw deal. Nor is this small beer for the Spanish company. YPF has accounted on average for 63 percent of Repsol’s oil and gas production since 2007 and has contributed nearly 30 percent of its group operating income, according to Société Générale estimates. What’s more, Repsol’s exposure to YPF is actually larger than it looks. Argentina’s Petersen group still owes Repsol $1.9 billion after it struck a deal to buy shares from the Spaniards. Petersen has relied on dividends from YPF to service the loan. Now Argentina may redirect these dividends into capital investment at YPF.

Apr 16, 2012
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Spanish house prices poised for more falls

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By Fiona Maharg-Bravo

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Spain’s property market has been crashing in slow motion. Now the decline is accelerating.

Apr 11, 2012
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Spain’s fiscal amnesty sends wrong message

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By Fiona Maharg-Bravo

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Spain has a large underground economy and the country faces an uphill struggle to shrink its budget deficit to 3 percent of GDP in 2013. But Prime Minister Mariano Rajoy’s decision to allow a temporary, no-questions-asked fiscal amnesty is wrong on several fronts. It is desperate and will be ineffective. A better approach would be to beef up resources on tax inspection.

Mar 30, 2012
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Spain can’t avoid austerity conundrum

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By Fiona Maharg-Bravo

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

It’s hard to get the population revved up for a general strike in a country with a 23 percent unemployment rate. Indeed, the one in Spain on March 29 – aimed at stopping the country’s recent labour reform – was relatively subdued. There is an air of inevitability about the upcoming austerity, to be outlined on March 30 in the conservative government’s first full-year budget. Too much austerity could be self-defeating and even unrealistic, but Prime Minister Mariano Rajoy doesn’t have much choice.

Mar 28, 2012
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Spanish bank take-under reveals real estate mess

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By Fiona Maharg-Bravo

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Spanish bank investors have just had a painful reminder of the real estate mess that burdens the country’s banking system. Just a few months after Banca Civica listed on the stock market, Caixabank is buying the smaller lender – and its dud property loans – in an all-share deal priced at an 11 percent discount to market value. Caixabank will reap savings from cutting costs, including its own network. Without state support, though, the deal is still a risk.

Mar 27, 2012
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Rajoy’s poll loss no ground for wavering on reform

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By Fiona Maharg-Bravo

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

International markets shouldn’t normally care about who wins the local elections in Andalucia. But the elections on March 25 were important enough for Spain’s Prime Minister Mariano Rajoy to delay the announcement of the 2012 budget until after they were held. The tactic didn’t work. The ruling People’s Party failed to get enough votes to govern, confounding opinion polls. But for the government’s reform drive, it’s a setback more than a disaster.

Mar 19, 2012
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Shame if Spain loses second ECB seat

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By Fiona Maharg-Bravo

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

In an ideal world, everybody would lose their national passports and just become European when they arrive at the European Central Bank. In practice, nationality matters. That much was true when Jean-Claude Trichet, a Frenchman, ceased being ECB President and was replaced by Mario Draghi, an Italian. France was keen to get another countryman on the board so that it would regain its traditional two seats. Lorenzo Bini Smaghi, who by then was the third Italian on the board, was persuaded to make way.

Mar 14, 2012
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Haggling on 2012 Spanish deficit misses the point

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By Fiona Maharg-Bravo

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Mariano Rajoy’s defiant stance has worked – at least in part. After the Spanish prime minister unilaterally changed the country’s 2012 budget deficit target, euro zone finance ministers allowed him some leeway – as long as Spain maintains its goal of shrinking it to 3 pct of GDP next year. The compromise allows both sides to save face for now.

Feb 6, 2012
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Two cheers for Spanish banking reform

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By Fiona Maharg-Bravo

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Spain’s latest bank reform deserves two cheers. The country has finally owned up to the fallout from its housing bust by requiring lenders to set aside an extra 50 billion euros to cope with possible losses on their 323 billion euros of exposure to property developers. While this will help, the deteriorating economy means more provisions will be needed. The bigger listed banks can cope, but the state will still be on the hook for part of the cleanup.

Jan 16, 2012
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Spain’s regions need tough love treatment

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By Fiona Maharg-Bravo and Neil Unmack

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Spanish regions are like teenagers pushing their parents to the limit. The country’s 17 autonomous regions, which are responsible for education and health (over 50 percent of total government spending), missed their fiscal targets again last year, and caused the country to miss its own. Madrid faces the same dilemma as the European Commission when it comes to ensuring compliance of member countries with the stability pact: how to force the regions to follow the rules?

    • About Fiona

      "Fiona Maharg-Bravo is breakingviews´ Madrid correspondent. Fiona joined breakingviews in 2003 in London, covering media, transport, energy and Spain. Previously she spent a few months at the Financial Times as winner of the 2002 Nico Colchester Fellowship. Before becoming a journalist, Fiona worked nearly five years in banking, first at JP Morgan in equity capital markets and leveraged finance groups and then at the European Bank for Reconstruction and Development. She gained a BA/MA (Phi Beta Kappa) from the University of Chicago in Political Science and International Relations and a Diploma in Economics from Cambridge University."
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