48 hours of economic hard news in Spain
- Paul Giblin
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E-mail Xinhua, September 29, 2012
48 hours of economic hard news in Spain
MADRID, Sept. 28 (Xinhua) -- Spanish banks need just over 59 billion euros to complete their recapitalization, it was confirmed on Friday with the publication of the audit carried out by the consulting firm Oliver Wymang.
Over 46 billion of that figure is needed by banks which have already been nationalized after their exposure to toxic assets as a result of the crash of the Spanish construction industry with the bank Bankia requiring almost 25 billion euros.
Three private banks also require some recapitalization, but another seven, including Banco Santander, BBVA and Caixabank do not need any financial aid.
The news was greeted with certain relief in Spain given that the total required is well below the 100 billion euros that the EU granted earlier in the year for the recapitalization of the country's banks.
The news comes 24 hours after the government of Mariano Rajoy presented its budget for 2013 in what is seen as a key moment amid possible negotiations for an EU bailout.
Experts were looking at the terms of the budget to see if there were any clues over the possible bailout request with the government preparing the way with a further series of spending cuts.
The government highlighted its decision to raise pensions by one percent and the fact that there are no major tax increases on top of recent rises in sales and income tax.
This decision not to raise taxes again for the time being, or to begin taxing the church in Spain, limited the possibilities of the government to help deal with the Spanish State deficit and Rajoy and his ministers have opted for a further round of spending cuts with central government spending to be slashed by over seven percent.
This will do little to ease the problem of unemployment in a country where around 25 percent of the workforce is out of a job and with the recession looking certain to continue into 2013 and many experts are disappointed that no measures have been taken to stimulate growth, which would help increase revenue to the Treasury. Enditem
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