Spain

The European Central Bank's pledge to stand by vulnerable euro zone members will be enough to ensure Italy and Spain find buyers for their bonds at parallel auctions on Thursday, Reuters reported. In Italy, the ECB's bond-buying scheme is seen as a solid enough counterweight to the political tension and market jitters triggered by Prime Minister Mario Monti's weekend announcement of his intention to step down early.

The Spanish government said it won't make extra payments expected by more than five million retirees to adjust for this year's inflation, one of the toughest austerity steps yet in its struggle to slash a gaping budget deficit, The Wall Street Journal reported. The measure announced Friday means the government will withhold an estimated €3.86 billion ($5 billion) from older Spaniards, sending ripple effects throughout society. With more than one-quarter of the workforce unemployed, families rely increasingly on the retirement income of their elders to buttress household finances.

European Union regulators gave the green light to €37 billion ($47.9 billion) in euro-zone funding for Spain's stricken banking sector on Wednesday, setting in motion a long-term cleanup, The Wall Street Journal reported. In exchange, four nationalized banks agreed to make sharp cuts in their balance sheets and payrolls—a retrenchment that carries the risk of intensifying Spain's credit crunch in the midst of a deep recession.

The Bank of Spain has approved the restructuring plans for four of the country's nationalised banks due to receive aid from Europe, Spanish restructuring fund FROB said on Tuesday. The FROB, which controls the banks bailed out by Spain, added that the European Commission was expected to give its definitive approval to the plans on Wednesday. The banks involved are Bankia, Novagalicia Banco, CatalunyaCaixa and Banco de Valencia. The FROB said it expected to receive European funds in the first half of December, and it would then inject them into the banks.

Spanish banks, awaiting the first payments from a €100 billion European credit line, saw bad loans hit a new high in September, new data showed Monday, the Irish Times reported. The new figures will not affect the euro zone aid, aimed at cleaning up the toxic real estate assets from the lenders' balance sheets, but reflect moves by the banks to be more realistic about the extent of their bad loans. A recent independent audit of Spanish banks concluded that they needed capital injections totalling €60 billion to ride out a severe economic crisis.

Mariano Rajoy has always said that when it comes to a possible Spanish bailout, he will do what is right for Spain and right for Europe. So far, it has to be said, the Prime Minister's policy of sitting on his hands has been vindicated, much to the frustration of those who predicted the markets would have forced his hand by now, The Wall Street Journal Agenda blog reported.

Spain will need no further austerity measures until the end of next year even though it will easily miss its deficit targets, the EU’s top economic official announced on Wednesday in the clearest sign yet Brussels is backing away from an austerity-focused crisis response, the Financial Times reported. The clean bill of health from Olli Rehn, EU economic commissioner, does not set new budget targets for this year or next. Instead, his assessment gives approval based on the structural reforms proposed by Madrid as part of its budget plan unveiled in September.

Spain's largest banks said Monday they had agreed to a two-year freeze on evictions of homeowners "in extreme financial need," amid a public uproar following the suicides of two homeowners facing expulsion, The Wall Street Journal reported. The decision by the Spanish banking association AEB, for what it called "humanitarian reasons," came as leaders of the governing Popular Party and the opposition Socialists were to begin working on a bipartisan deal to change Spain's mortgage laws, some of which date back to the early 1900s.

Prime Minister Mariano Rajoy signalled Tuesday that he is in no hurry to ask for a financial rescue, saying he wants to be certain that activating the euro zone's new bailout mechanism would bring a significant improvement in Spain's borrowing costs, The Wall Street Journal reported. Though most analysts believe Spain will need assistance as it overhauls its ailing economy, the European Central Bank's recent promise of massive government bond purchases for countries seeking bailouts has brought down borrowing costs for Spain and other struggling euro-zone countries.

Tour operator Orizonia is restructuring around 640 million euros ($818 million) of loans, according to people close to talks with creditors, as it battles to survive Spain's economic downturn, Reuters reported. Private equity-owned Orizonia, formerly known as Iberostar, has a cash hole in its finances after revenues slumped as the euro zone crisis intensified, a senior investor said. The travel company is expected to complete a debt restructuring by the end of November.