Spain

Labor unions at the Adam Opel AG car factory in northeastern Spain said Monday they had accepted a new restructuring agreement reached with Magna International Inc., clearing at least one obstacle to the Canadian company's plans to take over the General Motors Co. subsidiary together with Russia's OAO Sberbank, The Wall Street Journal reported. The European Commission, the European Union's executive branch, meanwhile, said it has set a Nov. 27 deadline for its antitrust review of the planned takeover.

The IMF forecasts that Spain will be within the group of European economies that recorded a higher rate of bad loans above the European average along with France and Italy, because these countries have a high rate of loans on total assets, according to the Barcelona Reporter. As far as estimates of losses for banks and financial institutions are concerned, their financial losses for the period 2007/10 could be around 412 million euros to 2.3 billion euros, but warned that risks to global financial stability "remains high".

More uncertainty was injected into the planned sale of General Motors Co.'s Opel to a group led by Magna International Inc. as Spain urged European regulators to investigate the agreement and Germany's Free Democrats, consistent critics of the deal, were poised to win a powerful voice in Germany's new government, The Wall Street Journal reported. The deal has run into steady fire from Magna customers and European governments alike since the Canadian auto-parts maker reached a preliminary agreement to buy a majority stake in Opel earlier this month.

Spain's government on Saturday agreed a 2010 budget, which includes tax rises to cover increases in government spending as Spain fights a recession after a huge housing boom, Finfacts reported. The government said in a statement that it now forecasts a total 2010 budget deficit equal to 8.1% of GDP (gross domestic product), compared to 8.4% previously and the Euro 3% Growth and Stability Pact.

The president of a leading European business group has condemned Germany's plan to sweeten the sale of Opel, General Motors' European arm, to a Canadian-led consortium with an offer of billions of euros in subsidies, the Financial Times reported. "We would have been much better off if we had had a structured insolvency. That would have left Opel in Europe in a much stronger position," said Jürgen Thumann, head of BusinessEurope, a pan-European employers' federation.

Unless government programs for the unemployed are refined, there is a danger that high jobless rates will persist beyond 2010 in advanced economies, the Organization for Economic Cooperation and Development warned on Wednesday. The international organization said that unemployment among its 30 member nations would rise to nearly 10 percent by the end of 2010, above its previous post-1970 peak of 7.5 percent during the second quarter of 1993, The New York Times reported.

Even as France and Germany begin to show signs of economic recovery, weaker members of the European common-currency union remain mired in recession, The Wall Street Journal reported. The euro is at its strongest level against the dollar this year, and interest rates suggest investor fears over a debt default by a euro-zone member have eased since earlier in the year. Despite this, the euro zone's toughest times could lie ahead. To understand why, it is worth taking a look at Spain.

Spanish jobless claims resumed their upward spiral in August, ending several months of improvement in which an €8 billion ($11.37 billion) government infrastructure program and the summer tourism season gave job creation a boost, The Wall Street Journal reported. The Spanish labor ministry said Wednesday that jobless claims rose by 84,985, or 2.4%, to 3,629,080 in August from July. August jobless claims were up 43% on the year. Spain has been rapidly shedding jobs since the collapse of a labor-intensive housing boom last year.

Earlier this year, Federal Deposit Insurance Corp. Chairman Sheila C. Bair had a discreet visit from a Spanish banker, The Wall Street Journal reported. Francisco González, chairman and chief executive of Banco Bilbao Vizcaya Argentaria SA, the second-largest bank in Spain by stock-market value after Banco Santander SA, wanted to make sure the FDIC kept him in mind when selling assets the agency is getting from failed U.S. banks, according to people familiar with the meeting.

The number of businesses and individuals filing for bankruptcy in Spain reached a record 3,285 in the first half of this year, or triple the figure in the same period in 2008, The Economic Times reported. Firms and the self-employed accounted for all but 515 of the filings, the National Statistics Institute (INE) said Wednesday. By industry, 32.1 per cent of the firms declaring bankruptcy in the second quarter were mainly involved in construction or real estate sales, while 24.9 per cent were in industry and energy, and 17.3 per cent operated in the retail sector.