Arab Today, arab today analysts fear spain may need fullblown bailout
Last Updated : GMT 13:45:13
Arab Today, arab today
Arab Today, arab today

Analysts fear Spain may need full-blown bailout

Arab Today, arab today

Arab Today, arab today Analysts fear Spain may need full-blown bailout

Madrid - Arabstoday

A Eurozone bailout for Spain’s banks and a tough batch of pay cuts and tax hikes have not been enough to save the country from the risk of a full-blown bailout, analysts warn. Squeezed between public outrage at its austere economic reforms and pressure from European authorities to strengthen its public finances, the government has run out of ammunition. Hundreds of thousands of Spaniards took to the streets on Thursday in the biggest of a string of angry anti-austerity protests. On Friday, the stock market plunged 5.8 per cent and sovereign interest rates rose to dangerous levels, despite the Eurozone’s approval for a credit line of up to €100 billion (Dh446.49 billion) to save the banks. Spain has entered a “death spiral” with its rising financing costs complicating its efforts to pay off its debts, according to Rabobank analyst Richard McGuire. Analysts at consultancy Capital Economics warned: “With the outlook for Spain’s public finances still closely tied to that of its banking sector, there remains a strong risk that the Spanish government will need its own bailout.” Bailout funds Spain is due this month to become the fourth Eurozone country, after Greece, Ireland and Portugal, to get bailout funds in the crisis after the Eurozone approved the aid for Spanish banks on Friday. Despite this, the return on Spanish 10-year bonds jumped above the 7 per cent danger level and another key measure, the difference between the yields on Spanish and safe haven German bonds, topped 600 points. “This is surprising, especially considering the recent package of savings measures...and the definitive validation of the bank bailout,” wrote Daniel Pingarron, a strategist at IG Markets trading group. “A large number of investors think that the possibility of a break-up of the euro is rising.” The Madrid stock exchange plunged by 5.8 per cent on Friday, after one of Spain’s indebted regional authorities, Valencia, reached out for aid from a €18 billion central government fund for struggling regions. The markets have defied Spain’s latest deficit-cutting measures, passed by parliament on Thursday: €65 billion in fresh austerity measures, including cuts to pay and unemployment benefits. “Front-loaded austerity is likely to deepen and prolong the recession,” wrote Christian Schulz, an analyst at German bank Berenberg, in a report. “Unemployment may rise further in the short term, increasing the risk of a political backlash.” Risk of losing market access Without better economic news, “Spain may risk losing market access” for borrowing to finance its day-to-day operations, he warned. On Friday, the Spanish government cut its economic growth forecast for 2013 from 0.2 per cent growth to a contraction of 0.5 per cent. Unemployment is at more than 24 per cent. Analysts at financial group Citi forecast a much harsher contraction of 2.1 per cent in 2012 and 3.1 per cent in 2013. Pingarron saw the risk of a full bailout for Spain as still relatively remote, however, due to its formidable cost, estimated at about half a trillion euros overall. Compared to Spain, which accounts for 12 per cent of the gross domestic product (GDP) in the Eurozone, the three countries already bailed out are small, making up six per cent of Eurozone GDP between them. Contagion to Italy “A full bailout for Spain and its contagion to Italy would be unfeasible for the Eurozone and everyone knows it,” Pingarron wrote in a note. “So, although it seems an obvious solution, it doesn’t seem close to happening.” Spain insists the European Central Bank (ECB), which in December and February offered loans at ultra-low rates to banks to ease liquidity, must step in again with further measures to break the vicious circle. “The moment of truth for the ECB, where it may be forced to step in decisively, could be approaching more quickly,” wrote Schulz.

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today analysts fear spain may need fullblown bailout Arab Today, arab today analysts fear spain may need fullblown bailout

 



Arab Today, arab today
Arab Today, arab today Fadi explains secrets of  Nancy Ajram's newlook

GMT 18:23 2017 Friday ,24 February

Fadi explains secrets of  Nancy Ajram's newlook
Arab Today, arab today Tourist guide explains types of tourism

GMT 18:28 2017 Saturday ,25 February

Tourist guide explains types of tourism
Arab Today, arab today Expresses Algerian history by woody figures

GMT 13:26 2017 Friday ,24 February

Expresses Algerian history by woody figures
Arab Today, arab today Iran complying with nuclear deal

GMT 07:14 2017 Saturday ,25 February

Iran complying with nuclear deal
Arab Today, arab today Ayat Abaza says state TV presented major stars

GMT 03:52 2017 Sunday ,26 February

Ayat Abaza says state TV presented major stars

GMT 14:44 2017 Saturday ,25 February

China overtakes US as Germany’s top trade partner

GMT 05:53 2017 Saturday ,25 February

Global sovereign debt to hit new all-time high

GMT 05:17 2017 Saturday ,25 February

Oil world cautious on Trump’s next move

GMT 09:59 2017 Friday ,24 February

Baidu revenue slips anew amid ad clampdown

GMT 05:20 2017 Thursday ,23 February

WTO ratifies first multilateral trade deal
View News in Arabic - Business: نفط وبتروكيماويات
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Reading therapy relieves mental disorders

GMT 15:39 2017 Friday ,24 February

Reading therapy relieves mental disorders
Arab Today, arab today UK appoints 1st Scotland Yard chief in 188 years

GMT 05:14 2017 Thursday ,23 February

UK appoints 1st Scotland Yard chief in 188 years
Arab Today, arab today Penguins in the age of dinos

GMT 11:44 2017 Saturday ,25 February

Penguins in the age of dinos
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today 'Constructive' Vauxhall talk with union

GMT 08:54 2017 Saturday ,25 February

'Constructive' Vauxhall talk with union
Arab Today, arab today Tesla back into red but revenue grows

GMT 07:27 2017 Thursday ,23 February

Tesla back into red but revenue grows
Arab Today, arab today Ola Ghanem hopes to work with M.Ramadan

GMT 07:23 2017 Friday ,24 February

Ola Ghanem hopes to work with M.Ramadan
Arab Today, arab today Ex-yoga missionary unleashes rage

GMT 12:16 2017 Thursday ,23 February

Ex-yoga missionary unleashes rage

GMT 06:08 2017 Thursday ,23 February

Actress Lobna Abdel Aziz proud of her career

GMT 12:35 2017 Tuesday ,21 February

63-Year-Old Woman Delivers Baby

GMT 22:42 2017 Thursday ,23 February

Nasima Gamei revives heritage in jewelries

GMT 10:28 2017 Wednesday ,22 February

Milan laughs while Rome cries

GMT 20:33 2017 Friday ,17 February

To release new antiques collection

GMT 10:20 2017 Thursday ,23 February

Brazil's top diplomat resigns

GMT 11:54 2017 Thursday ,23 February

Saudis await visitors but will they come?

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 20:02 2017 Tuesday ,21 February

Nohan Seyam designs beautiful accessories
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday