How To Guides
- Childbirth & Education
- Legal Formalities
- Pensions & Benefits
- Property & Accommodation
Did you know...?
... Telefonica are NOT the only service provider of Telephone Lines, Internet Access or Mobile Phones?
Tumbit recommends Telitec Communications. Find out how Telitec Communications can help you here!
- Airports and Airlines Spain
- Paramount Theme Park Murcia Spain
- Corvera International Airport Murcia Spain
- Daily brief -Thursday 23 February 2017
- When Expat Eyes Are Smiling
- Meet Wincham at The Homes, Gardens & Lifestyle Show, Calpe
- QROPS 2014
- Spain Increases IHT in Valencia & Murcia
- Removals to Spain v Exports from Spain
- The Charm of Seville
- Gibraltar Relations
- Retiro Park : Madrid
- Wincham announce opening of Marbella office
- Community Insurance in Spain
- Calendar Girls
- Considerations when Insuring your Boat in Spain
- QROPS – HMRC Introduces changes that create havoc in the market place
- QROPS – All Change From April 2012
Spain deficit progress fails to calm contagion
Spain's borrowing costs jumped on Tuesday as risk aversion spread from Ireland and the central bank warned that the economic recovery would be halting, prompting investors to ignore Madrid's progress towards its deficit targets.
Central government deficit figures through October came in better than expected, and government officials came out in chorus to say that Spain - the euro zone's No. 4 economy - was on track to meet its ambitious deficit reduction targets.
But yields rose at Tuesday's Treasury bill auction, the country risk spread over German benchmark bonds hit a new euro lifetime high and bank shares sank as markets shrugged off news of a rescue package for Ireland.
"The outlook for a gradual recovery is surrounded by uncertainties" Bank of Spain Governor Miguel Angel Fernandez Ordonez told a finance committee in the Senate.
Spain's borrowing costs have soared this year as investors worry that its high deficit - the hangover of a property crisis that has yet to fully unwind - could push it the way of the Greek and Irish debt crises, putting a huge strain on the EU's bailout resources.
"In an environment where financing conditions will foreseeably remain restrictive and in which the public and the private sector have a pressing need to clean up their financial position, we can expect the pace of recovery in household consumption to slow versus the first half of the year" he said.
The Treasury sold 3.26 billion euros of three- and six-month bills, at the low end of its target range. Demand was solid but yields jumped from a month earlier.
The spread between yields on benchmark 10-year Spanish bonds and German bunds jumped to 233 basis points, the highest in the history of the single currency euro zone.
Spain's biggest banks Santander and BBVA were down 3 percent apiece in midsession trade, sinking to five-month lows, as doubts about banks and their exposure to property across Europe continued to weigh on prices.
Spain's central government budget - which does not include the pension system or regional government deficits - came in better than expected, down almost 50% from a year earlier helped by a hike in the value-added tax last summer.
Treasury Secretary Carlos Ocana said the data put Spain on track to reach its target for the overall state deficit for the full year.
The government has pledged to bring the deficit down to 9.3% of gross domestic product this year from more than 11 percent in 2009, and to continue to lower it next year.
The central government deficit reduction was deep enough to allow the government to reach its overall targets even though autonomous regions have been urged by the Central Bank to get their deficits further under control, economist Jose Carlos Diez with Intermoney brokerage, said.
"These are the numbers Spain must sell to the markets" Diez said.
If signs emerge that the deficit target is unattainable, market concerns over Spain could quickly push it toward crisis.
"We will not have problems in relation to Ireland if we carry out all the adjustments and reforms we've done and those we are planning, such as pension reform" Ocana told reporters in the Senate.
Ocana and Economy Secretary Jose Manuel Campa both reiterated on Tuesday the government's commitment to cutting its deficits.
Earlier, Ordonez made a clear distinction between Spanish banks and those of Ireland.
"(The Spanish banking sector) can't be compared with others. It's had its problems with the cajas (savings banks) but the system has undergone a big restructuring process" he said.
Spain's savings banks were hugely exposed to bad debt accumulated during the property boom, and have now undergone a restructuring process via government funding and a wave of mergers which has reduced their numbers to less than 20 from 45.
Latest News & Stories
- Five women killed in four days as gender violence spikes in Spain
- Spain struggles with spike in migrant arrivals at North African exclave
- New Route Manchester - Seville
- How millions of Spanish fans are watching pirated soccer on Facebook Live
- Spain says butane gas-bottle truck theft not terrorist related
- Facebook user faces €30,000 fine for posting video of Spanish policeman
- Hundreds of migrants cross into Spain's Ceuta in second wave in 3 days
- Spain will drop out of the world’s 25 largest economies by 2050
- Brexit Worry as Spain Predict Financial Disaster
- 'That bus has gone' - EU sees no Brexit U-turn now