Spain

In the years of economic crisis since the collapse of Lehman Brothers in 2008, Spanish leaders have always been able to boast to nervous investors that Spain’s public debt burden – however bad its annual budget deficits – is smaller than Germany’s and well below the European Union average, the Financial Times reported. Economists, business executives and even government officials, however, have started to sound the alarm about the rapid and unsustainable growth of the country’s public debt.

Spain's centre-right government moved today to head off any potential rebellion by the country's 17 autonomous regions over cost-cutting measures that are key to retaining credibility with its euro zone peers and financial markets, the Irish Times reported. Finance minister Cristobal Montoro was scheduled to meet with the financial heads from all of the regions later today to drive home the message of austerity.

The euro's tough new German-penned economic rulebook will be immediately tested by spiralling budget deficits in the Netherlands and Spain, raising the prospect of swingeing fines on the two countries, it emerged at an EU summit, The Guardian reported. As eurozone leaders finally launched a second, €130bn (£108bn) bailout of Greece, EU chiefs, with the exception of David Cameron and the Czech prime minister, prepared to sign the new rulebook – the fiscal pact – on Friday morning. The rules are the main part of an attempt to get the eurozone's soaring debt levels under control.

French presidential front-runner François Hollande said taxpayers earning over €1 million ($1.35 million) a year would be subjected to a special 75% tax bracket should he be elected, underscoring heightened interest across Europe in raising taxes on the wealthiest individuals, The Wall Street Journal reported. Speaking on French television late Monday, the Socialist candidate lamented the "considerable increase" in French corporate executives' pay, which he put at €2 million a year on average. "How can we accept that?" asked Mr. Hollande.

The Spanish government said Monday it missed its 2011 budget-deficit target by a wide margin, highlighting the difficulties in closing one of the euro zone's largest budget gaps as the country's economy entered a new downturn, The Wall Street Journal reported. The Spanish budget ministry said Spain's total public-sector budget deficit stood at 8.51% of gross domestic product last year, above the 8% estimate the new government of Prime Minister Mariano Rajoy gave in December. Spain had been aiming for a budget deficit equal to 6% of GDP in 2011.

Spain's jobless claims shot up 4% in January from December to 4.59 million, a sign that the euro zone's fourth-largest economy is still shedding jobs at a record rate, The Wall Street Journal reported. All sectors posted more claims but the rise was sharpest for services at 5.1%. In construction, weighed down by a four-year property slump, the number of residents registered as job seekers rose 2.1%. Compared with the same period a year ago, overall claims rose 8%.

Banco Santander of Spain announced on Tuesday that its net profit fell nearly 98 percent, to 47 million euros, during the final three months of last year, as the bank dealt with the downturn in the Spanish real estate market and the European debt crisis, The New York Times DealBook blog reported. The drop in quarterly profit weighed on the bank’s annual earnings, which fell 35 percent, to 5.35 billion euros ($7 billion), in 2011.

A new downturn for the Spanish economy has led to a sharp escalation of its unemployment rate, data showed Friday, lending new urgency to Prime Minister Mariano Rajoy's plans to overhaul one of the region's largest ailing economies, The Wall Street Journal reported. According to Spain's National Statistics Institute, the number of jobless Spaniards rose by 295,300 in the fourth quarter from the third, to 5.27 million. That is equal to 22.85% of the work force, compared with 21.52%, more than twice the average unemployment rate of 10% for the 27 members of the European Union.

Spanair SA, the Spanish airline involved in a crash that killed 154 people in 2008, ceased operations after Qatar Airways Ltd. halted takeover talks and the regional government refused to provide further funding, Bloomberg reported. The final flight landed at about 10 p.m. Friday, the Barcelona-based carrier said in an e-mailed statement, citing “a lack of financial visibility for the coming months.” The closer may affect as many as 23,000 passengers this weekend and will see 120 flights canceled, spokeswoman Sandra Melendez said.

After years of decrying as incompetent the former Socialist government of José Luis Rodríguez Zapatero, Spain’s business leaders and fund managers are having their first twinges of doubt about the Popular party administration they elected in November to replace it, the Financial Times reported. Mariano Rajoy, PP prime minister, had raised expectations he would enact radical economic reforms to save Spain from the eurozone sovereign debt crisis and the ignominy of a bail-out such as those of Greece, Ireland and Portugal.