InfoAnda - Analysis: Spain faces corrosion not collapse from euro crisis |

Pakistanis angry over detentions in Times Sq. case
Monday, May 24, 2010
ISLAMABAD – Relatives of three men detained by Pakistan for alleged links to the suspect in the attempted Times Square bombing say the men are innocent.
They

Taiwan denies boycotting Australian film festival
Thursday, August 6, 2009

AFP - Thursday, August 6TAIPEI (AFP) - - Taiwan's Beijing-friendly government on Wednesday denied boycotting an Australian film festival amid a row over the e

Merkel's support dips, regional ally resigns International
Thursday, September 3, 2009

By Sarah Marsh and Noah Barkin

BERLIN (Reuters) - Chancellor Angela Merkel suffered a double blow on Thursday as a senior party ally in east German

Minister seeks closure of anti-Berlusconi websites
Wednesday, December 16, 2009
ROME (AFP) - – The Italian government moved Tuesday to close down Internet sites encouraging further violence against Prime Minister Silvio Berlusconi, who

Asian markets mixed after Wall Street rally
Wednesday, March 18, 2009

By ELAINE KURTENBACH,AP Business Writer AP - Wednesday, March 18SHANGHAI - Asia's stock market rally seemed to be running out of steam Wednesday, despite an

China auto output hits 10 mln units for 1st time | 20 October 2009
U.S. gears up for digital TV switch on June 12 | Technology | | 6 March 2009
Yahoo! News | 18 March 2010

Braves crack three homers, lead Mets 5-2 through five innings | 8 August 2011

Forum Views () Forum Replies ()

Read more with google mobile : Analysis: Spain faces corrosion not collapse from euro crisis |

Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Home Business Business Home Economy Technology Media Small Business Legal Deals Earnings Social Pulse Business Video The Freeland File Markets Markets Home U.S. Markets European Markets Asian Markets Global Market Data Indices M&A Stocks Bonds Currencies Commodities Futures Funds peHUB World World Home U.S. Brazil China Euro Zone Japan Mexico Russia India Insight World Video Reuters Investigates Decoder Politics Politics Home Election 2012 Issues 2012 Candidates 2012 Tales from the Trail Political Punchlines Supreme Court Politics Video Tech Technology Home MediaFile Science Tech Video Tech Tonic Social Pulse Opinion Opinion Home Chrystia Freeland John Lloyd Felix Salmon Jack Shafer David Rohde Bernd Debusmann Nader Mousavizadeh Lucy P. Marcus David Cay Johnston Bethany McLean Edward Hadas Hugo Dixon Ian Bremmer Lawrence Summers Susan Glasser The Great Debate Steven Brill Jack & Suzy Welch Frederick Kempe Christopher Papagianis Breakingviews Equities Credit Private Equity M&A Macro & Markets Politics Breakingviews Video Money Money Home Tax Break Lipper Awards 2012 Global Investing MuniLand Unstructured Finance Linda Stern Mark Miller John Wasik James Saft Analyst Research Alerts Watchlist Portfolio Stock Screener Fund Screener Personal Finance Video Money Clip Investing 201 Life Health Sports Arts Faithworld Business Traveler Entertainment Oddly Enough Lifestyle Video Pictures Pictures Home Reuters Photographers Full Focus Video Reuters TV Reuters News Article Comments (2) Full Focus Photos of the week Our top photos from the past week. See more Images of April Follow Reuters Facebook Twitter RSS YouTube Read Romney seeks evangelical votes; opposes gay marriage 3:51pm EDT Gay marriage moves closer to Supreme Court 11 May 2012 Olympics-Britain to deploy "sonic gun" at Olympics 11 May 2012 "Subversive" newspaper crossword stirs Venezuela 11 May 2012 Greece lurches towards new vote, hard left leads 12:57pm EDT Discussed 152 Romney apologizes for bullying incident at school 147 Obesity fight must shift from personal blame: U.S. panel 125 Florida nabs white supremacists planning ”race war” Watched A look at the U.K.’s most beautiful face Thu, May 10 2012 South Korea opens Expo 2012 with dazzling display Fri, May 11 2012 Surfer rides 78-foot wave to world record Fri, May 11 2012 Pictures Reuters Photojournalism Our day's top images, in-depth photo essays and offbeat slices of life. See the best of Reuters photography. See more | Photo caption Photos of the week Our top photos from the past week. Slideshow Mother's Day in prison An annual Mother's Day event, Get On The Bus, brings children to visit their mothers in prison. Slideshow Afghan girls An indepth look at the lives of girls in Afghanistan in times of uncertainty. Slideshow Analysis: Spain faces corrosion not collapse from euro crisis Tweet Share this Email Print Related News Lack of new cash disappoints in Spain bank reform Fri, May 11 2012 Spain takes over Bankia to steady ailing sector Thu, May 10 2012 Spain to demand banks recognize more losses Wed, May 9 2012 Spain hopes for fourth time lucky with bank reform Tue, May 8 2012 Spain to announce clean-up plan for Bankia: sources Mon, May 7 2012 Analysis & Opinion Euro zone carry trade has limited shelf life Principal reductions begin in earnest Related Topics World » A woman stands under session information screens at the Madrid bourse April 27, 2012. Credit: Reuters/Andrea Comas By Alan Wheatley, Global Economics Correspondent BARCELONA, Spain | Sat May 12, 2012 3:59pm EDT BARCELONA, Spain (Reuters) - Students are protesting on Barcelona's elegant boulevards, public-sector wages are being cut for the second time in three years and resentment is growing against the central government and beneficiaries of bank bailouts. Such is the daily fallout from the euro zone's debt crisis. Like the rest of Spain, Barcelona is looking at several years of hard grind as the country adjusts to living within its means after the collapse of a debt-financed housing bubble that has brought much of the banking sector to its knees. Yet unless the most pessimistic projections of the cost of rescuing the banks prove right, the signs are that Spain faces corrosion not collapse. Greece risks suddenly not being able to pay for vital imports if it cannot form a new government that sticks to the terms of an international bailout. But Spain is more representative of the generally insidious, demoralizing nature of the crisis: austerity is sapping trust in politicians across the euro zone and fraying the social fabric as the bills for years of economic mismanagement are shared out. "The problem is social. What are we going to do when we have 25 percent unemployment? It's dramatic," said Joan Ramon Rovira, head of economic studies at the Barcelona chamber of commerce. Even though every fourth Spaniard is unemployed, job protection is being eroded. In Barcelona, capital of the northeastern region of Catalonia, hospital wards are being closed, class sizes are growing and university fees are rising. The result is a hardening of attitudes as various groups campaign to preserve their entitlements. The crisis has also ratcheted up political tensions with Madrid as supporters of Catalan independence increasingly begrudge helping to bankroll the central government, which they feel treats them with disdain. "Spain is a backpack that is too heavy for us to keep carrying. It's costing us our development," said the spokesman for Catalan President Artur Mas, Joan Maria Pique. EXPORTS RISING, HOUSE PRICES FALLING Rovira is optimistic that Spain will pull through. He produces figures showing how smartly exports are rising from Catalonia, which makes up 20 percent of the national economy and generates about 30 percent of its exports. Spain's exports rose 11 percent last year as it gradually restored the competitiveness lost when wages spurted after the launch of the euro in 1999. The government expects the current account deficit to shrink to under 1 percent of GDP this year from a peak of 10 percent in 2007. Joerg Kraemer, chief economist with Commerzbank in Frankfurt, estimated that Spain had recouped half of the pre-crisis deterioration in relative labor costs, a trend that should continue because of recent reforms making pay and contracts more flexible. The priority now, according to Catalonia's economy minister Andreu Mas-Colell is for firms in the region to bulk up. "The bright spot in our economy is exports," he said in an interview. "But our firms are too small. In an export-oriented economy size is important. We are too fragmented." In contrast to progress on external economic rebalancing, Spain is dragging its feet on reducing its budget deficit and is being punished by investors. Ten-year government bonds yield around 6 percent, a level that is unsustainable in the long run, on concerns that Madrid will have to spend tens of billions of euros to stop the rot in its banking system. Spanish banks have more than 180 billion euros of sour property assets on their books, and analysts fear there is worse to come as recession triggers more corporate and mortgage defaults. The Spanish government sought to boost investor confidence on Friday by ordering banks to set aside a further 30 billion euros in loan-loss provisions, two days after taking effective control of Bankia SA, one of the leading banks. But the financial markets were unimpressed. The attempted clean-up is the fourth, and Edward Hugh, an independent economist near Barcelona who says the government has been too slow to get to grips with the meltdown, doubts it will be the last. "The key question is where the price of property is going to settle. Until we know that, it's all guesswork," he said. House prices have fallen about 25 percent since 2007 and a Reuters poll published on Friday pointed to a further decline of more than 15 percent in 2012-2013. Morgan Stanley's base case is that banks will need 25 billion euros in capital. Royal Bank of Scotland expects a 68 billion euro shortfall over the next three years. Roubini Global Economics sees losses ranging from 130 billion euros to 300 billion euros and attaches a 60 percent probability to the need for a sovereign bailout followed, in 2015, by a restructuring of Spain's debt. But the chief economist of one local bank, who requested anonymity because the government was still finalizing its latest clean-up, said the extra provisioning being demanded by the market made sense only if Spain were to be stuck in recession for several years. "If it's needed to restore credibility and reduce the risk premium on our bonds, then maybe we have to do it. But I think the markets are overshooting," he said. REGIONAL FEUDING The urgency of stabilizing Spain's fast-growing stock of debt is shining the spotlight on its 17 autonomous regions, which account for about half of general government spending and whose debt has almost doubled in the past three years. The regions accounted for 55 percent of last year's general government deficit of 8.5 percent of GDP, according to JP Morgan, and Madrid has passed a law threatening to take direct control of their budgets unless they rein in spending. Seen from Barcelona, though, things are not so simple. Catalonia and other regions are responsible for managing public services, but Madrid retains most regulatory and tax-and-spend powers. This is a recipe for friction when economic times are tough: the tax take plummets, but demand for health and education does not. As a result, Barcelona frequently finds itself going cap in hand to Madrid to plug its cash shortfall even though Catalonia, Spain's richest region, transfers more than 8 percent of its GDP every year in net taxes to the central government. At the same time, Catalonia's ruling centre-right Convergence and Union (CiU) nationalist party says Madrid has withheld promised investment funds in pursuit of what it regards as a blatant agenda of centralizing power and suffocating Catalonia. "We understand that Spain is going through a crisis and reforms are needed. We are all in the same boat." Mas-Colell said. "What irritates us is that the crisis could be used as an opportunity to limit our self-government or to not honor commitments made in the past." Catalonia wants to negotiate a new fiscal deal that gives it more autonomy. But, saddled with a debt approaching 22 percent of regional output, its political hand looks weak. In the meantime, it is making more cuts. Health spending will fall 4.8 percent this year after a 6.5 percent drop in 2011. Regional public-sector salaries are being reduced 5 percent on top of a similar nationwide cut in 2010. A school building program has been halted and Catalans will soon start contributing to the cost of prescriptions. "We're going out on a limb, but we think our voters will understand the constraints in which we live," Mas-Colell said. NOT FAIR Conversations in Barcelona suggest that people do understand the need for belt-tightening. Importantly, strong family ties constitute a safety net of sorts for the unemployed. But there is a sense that the sacrifices are not being fairly shared. Felipe Aranguren, 59, who works when he can as a sociologist, rails against Spain's "rotten" banks and wants higher taxes on the rich to pay for a "New Deal" public-works program. A black star, the symbol of anarchism, is pinned to his lapel, but Aranguren does not think that dumping the euro and going it alone would ease Spain's plight. "Economically speaking, we can't do anything in Spain because everything is decided in Brussels. But leaving Europe would be just one more problem," he said. Joan Colom, an economist at the University of Barcelona, said his department had been forced to let go a lot of young lecturers and slash research. He was optimistic that Spain would overcome the crisis but was critical of the laser-like focus on austerity. "We will pay a cost, for sure, and it could be higher than necessary," said Colom, a former head of the Catalan Court of Auditors. Psychology student Celia Nisare Bleda, 19, fears that students from poorer families will bear the brunt of the education cuts. With every second young Spaniard out of work, she suspects that not even a degree will be enough to secure a job in Spain that pays decently. Lots of students were going abroad in search of a better future. So would she if necessary. "With the salaries we're likely to get, there's no possibility of having a good life. We'll be living all our lives like students." Nisare Bleda said. (editing by Janet McBride) World Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (2) gee.la wrote: Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Back to top Reuters.com Business Markets World Politics Technology Opinion Money Pictures Videos Site Index Legal Bankruptcy Law California Legal New York Legal Securities Law Support & Contact Support Corrections Connect with Reuters Twitter Facebook LinkedIn RSS Podcast Newsletters Mobile About Privacy Policy Terms of Use AdChoices Copyright Our Flagship financial information platform incorporating Reuters Insider An ultra-low latency infrastructure for electronic trading and data distribution A connected approach to governance, risk and compliance Our next generation legal research platform Our global tax workstation Thomsonreuters.com About Thomson Reuters Investor Relations Careers Contact Us Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests. NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.

Other News on Sunday, 13 May 2012
Thousands march against economic gloom in Spain, UK |
Exiles: Iran advancing active nuclear arms program |
U.S. drone strike kills 6 suspected militants in Yemen |
Analysis: Spain faces corrosion not collapse from euro crisis |
Bahrain protesters clash with police outside capital |
Batman, Spider-man, Iron Man guard Obama at fundraiser |
East Asian powers agree on trade pact talks |
Gulf leaders to discuss political union-Bahrain minister |
Senior Afghan peace negotiator shot dead in Kabul |
Alawite-Sunni fighting erupts in Lebanese port city |
Blind China activist Chen says arrested nephew a scapegoat |
Four soldiers in NATO-led force die in Afghanistan |
Netanyahu responds to Palestinian letter |
Coalition talks stall, Greece faces moment of truth |
Uganda captures Lord's Resistance Army commander |
Saudi and Bahrain expected to seek union: minister |
Insight: India's Queen of Democrazy at the crossroads of change |
Obama aide in Yemen in anti-al Qaeda drive |
Syrian forces kill seven civilians in rural attack: activists |
Germany's Merkel dealt heavy blow in state vote |
More than 40 dismembered bodies dumped on Mexican highway |
Avengers rings up $103 million in record weekend |
Greece at new risk of being pushed off euro
Bodies of missing Tenn. mom, Jo Ann Bain, and daughter found
Female Breasts Are Bigger Than Ever
AMD Trinity Accelerated Processing Units Now in Volume Production
The Avengers (2012 film), made the second biggest opening- and single-day gross of all-time
AMD to Start Production of piledriver
Ivy Bridge Quad-Core, Four-Thread Desktop CPUs
Islamists Protest Lady Gaga's Concert in Indonesia
Japan Successfully Broadcasts an 8K Signal Over the Air
ECB boosts loans to 1 trillion Euro to stop credit crunch
Egypt : Mohammed Morsi won with 52 percent
What do you call 100,000 Frenchmen with their hands up
AMD Launches AMD Embedded R-Series APU Platform
Fed Should not Ignore Emerging Market Crisis
Fed casts shadow over India, emerging markets
Why are Chinese tourists so rude? A few insights

USD EUR - 1 year graph		BlogMeter 1.01