Spain

The Spanish government is hoping to put the country’s creaking pension system back on sounder financial footing this week, with the launch of a pension reform that places tight curbs on how far payments to Spain’s 9m elderly people can rise in the coming years and decades, the Financial Times reported. The reform, due to enter into force on January 1, forms a key plank in the broader structural reform programme that has dominated Mariano Rajoy’s first two years as prime minister.

As mortgage defaults rise, lenders will have to set aside money to cover losses, hurting profits, according to Juan Villen, head of mortgages at Spanish property web site Idealista.com, Bloomberg reported. Spanish banks absorbed 87 billion euros ($120 billion) of impairment charges last year after Economy Minister Luis de Guindos forced them to record more defaults on loans to developers. The government took 41 billion euros in European assistance to shore up its failing lenders.

Ailing Spanish fishing firm Pescanova is considering a non-binding takeover offer from a consortium which includes U.S. private equity firm KKR and shareholder Damm, a domestic brewer, Reuters reported. Pescanova filed for insolvency earlier this year after its auditors said managers had attempted to hide debt. The drawn-out insolvency process could end in a liquidation or a plan to re-float the company.

Ailing Spanish fishing firm Pescanova is considering a non-binding takeover offer from a consortium which includes U.S. private equity firm KKR and shareholder Damm, a domestic brewer, Reuters reported today. Pescanova filed for insolvency earlier this year after its auditors said managers had attempted to hide debt. The drawn-out insolvency process could end in a liquidation or a plan to re-float the company.

Ireland and Spain said Thursday they could stand on their own feet once their bailout programs end in the coming months, marking significant steps as the euro zone battles to exit a four-year debt crisis, The Wall Street Journal reported. The currency union's finance ministers hailed the decisions as signs that their strategy of budget cuts, economic overhauls and long-term rescue loans was working.

Spain's biggest consumer appliance company Fagor said on Wednesday it had started insolvency proceedings after failing to reach a deal on debt which it needed to keep going as sales fell, Reuters reported. Spanish bankruptcies have risen steadily this year, after a prolonged economic downturn that sapped consumer spending and as bank lending falls. Fagor, however, was part of the Mondragon group in the northern Basque Country region, a large cooperative seen as a flexible organisation that was riding out the crisis. Fagor is the fifth-largest electrical appliance company in Europe.

Spanish appliance maker Fagor Electrodomésticos on Wednesday edged toward a possible bankruptcy filing after its French unit said it was seeking protection from creditors, The Wall Street Journal reported. Fagor, Europe's fifth-largest maker of household appliances such as washing machines and stoves, was hit hard by the region's economic crisis and has been scrambling to secure financing to continue operations. The white-goods maker is the flagship industrial member of the Mondragón network of self-managed cooperatives—the largest of its type in the world.

It was a reality check that many in Spain always knew was coming. For more than two weeks, the country woke up almost daily to brightening economic news: first came the widely-hailed return to economic growth, then a flurry of data showing that the labour market is stabilising, the Financial Times reported. Even Microsoft founder Bill Gates seemed keen to buy into the Spanish comeback, snapping up a 6 per cent stake in one of the country’s biggest construction groups.

Indebted Spanish printing company Service Point Solutions SA has applied for creditor protection, it said on Thursday, after talks with its lenders failed, Reuters reported. The company said earlier on Thursday it was talking to creditors after banks rejected its proposals to buy back debt and that it had not ruled out applying for protection from creditors.

Hedge funds are circling Spanish banks, hoping to mop up bad corporate debt cheaply when the lenders finally face up to billions of euros in losses on loans to firms in trouble, Reuters reported. Spanish companies are among the most indebted in Europe, and investors say that only when this burden has eased will equity buyouts recover following the country's long recession. While Spanish banks have already been forced to grasp the nettle on property loans, they still need to tackle their distressed corporate lending.