Category Archives: Euro

De Guindos insists bailout not an option

Luis de Guindos - Economy Minister (photo: lamoncloa.es)

A busy day of fire-fighting for Economy Minister Luis de Guindos, who has given a radio interview this evening in which he ruled out the possibility of Spain needing a bailout. After more wobbles for the Spanish economy today, de Guindos said this evening:

“We have not asked for [a bailout] – it is not on the table.”

He later added that a bailout would be the “worst outcome possible” and that it would be “a last resort”.

“Spain cannot lose it autonomy with regard to economic matters,” he concluded.

He also reiterated his earlier claim that Spain’s biggest problem is the uncertainty about the finances of the heavily indebted Autonomous Communities.

With regard to today’s news on the risk premium, de Guindos was quick to point out that Spain is not alone, and that other eurozone countries, notably Italy, also saw their risk premium rise today.

He also downplayed President Sarkoy’s earlier comments on Spain and Greece, saying that they were clearly meant as a critique of the social-democrat politicians which until recently governed in both countries.

The full interview can be listened to here (in Spanish)

Onwards and Downwards

Economy Minister Luis de Guindos, defending the Government's economic strategy (photo: by mercedesalonso)

Another shaky day for the Spanish economy, as Spain’s risk premium continues to rise – reaching the highest point since December, and since the Partido Popular took power at the end of last year.

Economy Minister Luis de Guindos claimed today that the rising risk premium is down to the markets’ worries about the ability of Spain to recover from the economic crisis. He went out of his way, though, to highlight that this was not a problem confined to Spain.

“What this shows,” he said, ” is that there has been an increase in market nervousness, but it has not been only about Spain. It has affected all the countries of the eurozone. It has been evident in the rest of the eurozone countries which are vulnerable in one way or another.

“It is a problem which is all about the negative perception of economic growth in Spain, Portugal and Italy,” de Guindos added. He went on to defend the measures the Government is taking, especially with regard to the proposed national budget for 2012.

The only slight silver lining today was that the Spanish stock exchange held steady, despite the storm clouds gathering overhead. The Ibex 35 closed down just 0.2%.

Disappointing Bond Auction Knocks Confidence in Spanish Economy

(photo by aranjuez1404)

The Spanish economy took another slap in the face today, and with it so did the Government who had hoped that their defiance in the face of violent ant-cuts protestors last week would signal strength of purpose.However the markets once again had different ideas. In the first auction of government bonds since the announcement of the Government’s austere budget for 2012, the Ministry of the Economy sold €2.5 billion in three-, four- and eight-year bonds despite aiming to sell between €2.5 – €3.5 billon.

In a rallying call to those who oppose his proposed budget, Prime Minister Mariano Rajoy said today:

“Spain is facing an economic situation of extreme difficulty, I repeat, of extreme difficulty, and those who do not understand that are fooling themselves.”

He also went on to raise the threat of Spain requiring an international bailout should his budget plans falter altogether. Stressing that although “no on likes” the budget his Government announced last week, he added “the alternative is infinitely worse”.

To add to this disappointment, Spain’s risk premium rose its highest level since the Partido Popular took office in December. The stock markets also took a hit, with the Ibex 35 closing down more than 2 percentage points.