Spain

The story of housing boom and housing bust, debt and unemployment is repeated in towns and villages across Spain. It weighs heavily on the Spanish government as it ponders the political dangers and economic merits of a European Union bailout, the Financial Times reported. But for millions of Spaniards, the country’s severe recession is above all else a fact of daily life, reflected in empty storefronts and crowded soup kitchens, in crushing personal debt, skipped mortgage payments and the looming threat of eviction.

Spain's so-called bad bank will buy billions of euros worth of distressed loans and foreclosed property from commercial lenders for around half the book value, a discount that could weigh on the finances of its weakest banks as the government decides whether to seek assistance from the euro zone's bailout fund, The Wall Street Journal reported. New details of the government-run asset-management firm's plans were released Monday as Prime Minister Mariano Rajoy insisted again that Spain, the frailest of Europe's large economies, doesn't need a new bailout at the moment.

Spain's official jobless rate continued to climb in the third quarter, hitting a record of more than 25% and signaling the country's struggle to emerge from a deep contraction, The Wall Street Journal reported. The euro zone's fourth-largest economy is suffering from the collapse of a decadelong housing bubble and from deep spending cuts as the government tries to narrow its budget deficit. Spain's unemployment rate is the highest in the euro zone.

At the Leganes toll booth outside Madrid, the workers scan the horizon for cars. In Spain's recession, the stream of paying drivers has slowed to a trickle and the toll road is all but bankrupt. Like the housing bubble, pumped up until it burst in 2008, and its speculation-funded phantom airports, the folly of Spain's road-building boom too is now being laid bare in vast stretches of tarmac, Agence France-Presse reported. "Right now we can't meet our debt repayments.

Spanish telecom giant Telefónica SA, one of the world's most indebted companies, could establish two units—one in Latin America and one in Europe—to protect itself from any further worsening of Spain's economic troubles, its chief financial officer said, The Wall Street Journal reported. The company, among Spain's largest by market capitalization and a once-proud symbol of its boom-time expansion, is immersed in the country's troubles.

European authorities are pushing Bankia group to impose losses on junior debtholders as part of Spain’s bank bailout by swapping their securities for stock in the nationalized lender, two people with knowledge of the matter said, Reuters reported. The European Central Bank and European Commission want investors including preference shareholders to accept newly issued shares in exchange for their existing securities to help reduce the cost to the taxpayer of Spain’s 100 billion-euro ($130 billion) bank rescue, said the people, who declined to be named because the matter isn’t public.

The Madrid region has been pushed further towards requesting a bailout from Spain’s regional government rescue fund after it pulled a planned debt sale amid limp investor demand, the Financial Times reported. The failure to sell bonds by the Community of Madrid, which has the second-highest credit rating of Spain’s 17 regional governments, came after Moody’s downgraded the debt of five other Spanish regions, including the economic powerhouse of Catalonia.

Bankia and three other Spanish lenders will win European Union approval for government bailouts by the end of November, EU Competition Commissioner Joaquin Almunia said, Bloomberg reported. “The Bank of Spain, the Commission and the management of the four entities have been working on their restructuring plans during the summer, and the commission will take a decision approving them by the end of November,” Almunia said in the text of a speech he gave in Barcelona today.

Spain's debt costs retreated further from their dangerous summer highs Thursday, helped by favorable ratings news and growing hopes that the government will request a bailout, The Wall Street Journal reported. A Spanish bond auction attracted solid demand after Moody's surprised investors late Tuesday by leaving Spain's investment grade rating unchanged. It was widely expected to relegate it to junk status. Moody's pinned its decision on the increasing likelihood of the country asking for financial assistance from the European Union.

Spain has set a €90 billion limit for the size of a bad bank created to take over other financial entities’ toxic real estate assets, a necessary step to obtain European funding for the sector, the Irish Times reported. The country is preparing to receive the first funds from a €100 billion credit line for its banks agreed with Europe in June, paving the way for a fuller bailout that is likely to dominate talks at a European Union summit starting today.