Spain

The Spanish government Tuesday said it cut its budget deficit in half in the first four months of the year and that efforts to overhaul the country's ailing finances are on track despite slippages from regional authorities, The Wall Street Journal reported. Finance ministry data showed that the central government slashed its January-April deficit by 53% on the year to €2.45 billion, equal to 0.2% of gross domestic product. But the finance ministry also said the country's 17 regions—which collectively control about one third of spending—had a deficit equal to 0.5% of GDP.

A series of youth rallies have swept across Spain's biggest cities ahead of this weekend's elections, with thousands calling for an overhaul of Spain's political system and economy, The Wall Street Journal reported. The protesters, mostly unemployed, filled public squares in Madrid, Barcelona and Valencia on Wednesday, and most left late Wednesday night, leaving only several hundred core protesters camped in city squares.

With Spain's troubled savings banks struggling to attract badly needed private investment, the Bank of Spain is edging toward a variation on the "bad bank" model that aims to reassure investors while minimizing government risk, The Wall Street Journal reported. The model—in which individual lenders create a so-called bad bank that holds toxic assets and is supported by state funds—shows how Spain is ramping up efforts to attract private money as its seeks to plug a €14.1 billion ($20.2 billion) capital hole in the financial sector.

A reluctant Spain has been shoved once again into the front line of the battle over the future of the euro, following indications that Greece might need another bail-out to avoid defaulting on its sovereign debt, the Financial Times reported. After the rescues of Greece and Ireland last year and the imminent bail-out package for Portugal, investors say Spain’s €1,744bn ($2,478bn) gross external debt burden and its dependence on foreign financing place it technically next in line for emergency aid from the European Union and the International Monetary Fund.

Spain's first-quarter unemployment rate soared to 21.3%, with the economy losing more jobs in the three-month period than in the whole of 2010, as the country's government said talks for much-needed labor market reform may soon result in a deal, The Wall Street Journal reported. Spain's unemployment rate, the highest in the industrialized world, rose from 20.3% in the fourth quarter as the economy lost jobs across all sectors, data released Friday by the country's statistics institute INE shows.

Madrid has been forced to make an embarrassing clarification after claims that Spain had secured from China up to €9bn in investment in its troubled savings banks were denied by Beijing, the Financial Times reported. Spanish officials said an “error of communication” had led to reports that China Investment Corporation – one of the country’s sovereign wealth funds – was considering a €9bn investment after José Luis Rodríguez Zapatero, Spain’s prime minister, met Chinese leaders this week. A CIC official told Reuters that reports in the Spanish media of the investment were false.

Portugal's request for a bailout from the European Union hasn't so far rattled its neighbor Spain, which was able to sell bonds comfortably on Thursday, The Wall Street Journal reported. In a sharp shift from last year, when financial bailouts of Greece and Ireland shook the whole euro-zone periphery, the stability of Spain's borrowing costs suggests markets currently don't believe the country will be the next domino to fall. In a closely watched auction on Thursday, the Spanish government sold €4.130 billion of three-year bonds, offering around 3.57% interest.

Three years into Spain's economic crisis, the worst could still be to come for the country's ailing banks as they grapple with falling profits and rising bad debt, the central bank chief warned Tuesday, The Wall Street Journal reported. "2011 will be another year of adjustment, and for the banking sector, it will be one of the worst," Bank of Spain Governor Miguel Ángel Fernández Ordóñez said at a conference. Mr.

Spanish jobless claims rose again in March, adding to signs of a softening economy amid growing political uncertainty, The Wall Street Journal reported. Jobless claims rose by 0.8% to 4.3 million in March from February, a new record high, the ministry said in a statement Monday. In annual terms, March claims were up 4% from a year earlier. The ministry didn't give an unemployment rate, but data last week from the European Union's statistics arm Eurostat showed Spanish unemployment stood at 20.5% in February.

Ailing Spanish savings bank Caja de Ahorros del Mediterráneo Thursday began discussing its possible nationalization with the central bank after its merger with three small peers fell apart late Wednesday, The Wall Street Journal reported. A CAM spokesman said the Alicante-based savings bank, or caja, is presenting the Bank of Spain with a new business plan and an application for money from Spain's state-financed Fund for Orderly Bank Restructuring, also known as FROB.