Daily Archives: June 3, 2012
The Prime Minister, Mariano Rajoy, will close the conference today in Sitges Economy Circle, after the opposition leader, Alfredo Perez Rubalcaba, he has urged in this forum to reach agreements, like the “big countries “image in favor of Spain.
The chairman of the Economic Circle, the former Minister Josep Pique PP, Rajoy intends to bring in the closing ceremony of the Catalan business forum, the need for a pact between the PP and PSOE in order to give an image of unity internal appeal abroad.
Beyond meeting these demands, Rajoy is expected to address the serious economic crisis in Spain, at a time when the risk premium remains rampant despite government efforts to convey an image of tranquility.
Indeed, the Deputy Prime Minister, Soraya Saenz de Santamaria, met in Washington with Secretary of the U.S. Treasury, Timothy Geithner, and Managing Director International Monetary Fund (IMF), Christine Lagarde, to address, among other issues, the European situation and the future of the euro.
The visit, however, has not helped to reassure the markets and the risk premium Spanish, which measures the spread between bond yields and German national, which has closed its worst week since the entry into the euro, 536 points basic, while the stock market has dropped another 0.41% on Friday.
The Economics Circle Meeting, which this year reaches its XXVIII edition, has had this year with the participation, among others, the president of the Generalitat, Artur Mas, Minister of Economy, Luis de Guindos, the Minister of Economy Catalan Artur Mas-Colell, and the PSOE leader, Alfredo Perez Rubalcaba.
Some major banks Bankia took months pointing to the origin of the doubts about the Spanish financial system and now that the entity has filed a million dollar injection of public money that will be critical in better shape than all of them.
The plan of the new management team Bankia, which calls for 22,000 million to the State but with adjustments to stay at 19,000 million, is great for the group, but is a “grievance” against the rest of the industry, told Reuters a banking executive.
The nationalization of Bankia enable the group to cover your property risk as required by the government, but also have billions to protect against possible losses to surface in the future.
On this last point where the main criticisms arise because Bankia has no hole and with that money is shielded against losses, and become practically covered half of its loans.
This gives the highest coverage of Spanish banks and “possibly” from around the world, as recently pointed out the board of directors of Caja Madrid, chaired by Rodrigo Rato.
The consultees agree that “open bar” offered by the Economy Minister Luis de Guindos to Bankia is “great” because she will be able to cope more comfortably than their competitors the possible deterioration of its balance sheet.
However, this is done with public money, and instead of clearing doubts, creates new suspicions about the health of the Spanish financial system, which gets less coverage.
Recently the CEO of Bankinter, Maria Dolores Dancausa, considered that the aid requested by Bankia is “excessive” and “deserves an explanation”, although in his opinion, if he had not done so “had broken the confidence not only in the new managers, but on the whole industry. ”
He also complained of discrimination for other entities is discrimination compete with one that has received an injection of this size.
Other banks also fear that sanitation Bankia intended to serve as an example of which will be forced to make others, especially if the consultants hired by the government detected the need for more supplies.
Bankia hole, the escalation of the risk premium and the ECB’s refusal to come to the aid of debt have drawn a black week in the markets in which the Government has expressed hope that the EU take steps towards a union bank to soften the pressure on Spain.
Government sources acknowledge that they have placed their trust in Greek elections next June 17, pending a government that is elected European, and the Summit to be held later this month in Brussels.
This week we have heard with satisfaction how the Commission President, Jose Manuel Durao Barroso and European Central Bank, Mario Dragui, betting directly by a bank bond to safeguard the euro, a move that would involve, inter alia, a fund entities at risk.
In no case could assist Bankia because its implementation would require a long process, but from the Government considered it important that the markets see the EU committed to the single currency and decided to take steps to protect it.
Throughout the week, the chief executive, Mariano Rajoy, has spoken to the main European and German Chancellor Angela Merkel publicly asked to have confidence in the measures being taken by the Spanish Government in stabilizing European banks.
Although Berlin has always rejected the idea that banks can directly access the European funds and that Merkel made it clear that it is not already in it, also admitted that “there need be no taboos.”
The Deputy Prime Minister, Soraya Saenz de Santamaria, also received support from the IMF in Washington and U.S. authorities, but the markets have turned a deaf ear to these messages, the risk premium has broken records every day and the bag has reached fall to 2003 levels.
The government publicly attributed the hardness of the latest financial turmoil on the Greek political instability, but government sources acknowledge also the doubts aroused by the Spanish financial system.
However, at the Moncloa are convinced that they have taken adequate steps to dispel the uncertainties, as the solution to Bankia is underway and will soon study the report of the two independent assessors who are studying the assets of all entities and financing needs.
This is an exercise in transparency that has not made any European country, sources emphasize that regret the speculation about the situation in Spain, “not only idle, but very counterproductive.”
So far, the known data are Bankia hole, which formally recognized on Friday June 25 the state needed 19,000 million euros, which, combined with 4465 and injected, the operation became the most expensive rescue Spanish financial history.
On Monday, with the risk premium over the 500 points, so unusual and unexpected Rajoy staged a press conference at the headquarters of the PP to cast a reassuring message and make it clear that “there will be no bailout of the banking Spanish. “