Spain

Cemex SAB, the largest cement maker in the Americas, takes its proposal for restructuring $14.5 billion of bank debt to Madrid today after presenting the offer to lenders in New York earlier this week, Bloomberg reported. Monterrey, Mexico-based Cemex is seeking to extend the maturity of the debt to February 2014 from the current 2009 through 2011, the company said yesterday. Cemex also said in a U.S. securities filing that it may need to issue debt, stock or equity-linked notes and that its auditors “expressed substantial doubt” about the company’s ability to stay in business.

Spain's government approved a long-awaited €9 billion ($12.66 billion) bailout fund to shore up banks weakened by a deep economic recession and get them lending again, The Wall Street Journal reported. Spanish Finance Minister Elena Salgado said the country's systemically important institutions are healthy, but some smaller banks could have "problems" as the downturn deepens.

The problems of Greece's homes market pale in comparison with those of Spain and Ireland, but the pain is seeping through the economy. About 135,000 properties, mostly residential, remain unsold in Greece, compared with well over one million in Spain and about 70,000 in Ireland. Construction accounts for 11 percent of Greece's GDP -- a significant factor taking the economy into recession after years when Greece grew by about 4 percent annually, well above its euro-zone peers. This recession will be its first since 1993.

Faced with plunging orders, merchants across recession-wracked Spain are starting to do something that many of them have never done: cut retail prices. Prices dipped everywhere, from restaurants and fashion retailers to pharmacies and supermarkets in March, The New York Times reported. The nation’s jobless rate, already a painful 15.5 percent, could soon reach 20 percent, a troubling number for a major industrialized country.

Caja Madrid may be the first Spanish bank to stop interest payments to mortgage-backed bond investors as loan defaults soar, according to Standard & Poor’s. Homeowners lagged behind on repayments on 72 billion euros of mortgages as of January, Bank of Spain data show, after the credit crisis halted a real-estate boom. “A number of deals” may have to defer interest, said Dipesh Mehta, an asset-backed debt analyst at Barclays Capital in London. “Unemployment is the biggest risk” to Spanish mortgage bonds, he said.

Spain's government plans to set up a bank restructuring fund to inject capital or liquidity into small and medium-sized savings banks facing problems, Spanish media reported on Thursday. The fund would form part of a bank intervention plan Prime Minister Jose Luis Rodriguez Zapatero announced on Wednesday. The publicly run recapitalization fund would buy preferential shares in banks or provide loan guarantees to institutions running short of liquidity, newspaper El Pais reported.

Spain's central bank will bail out struggling regional savings bank Caja de Ahorros Castilla La Mancha, marking the first time a Spanish financial institution has been rescued since the current financial crisis began, The Wall Street Journal reported. The Spanish government said on Sunday that the Bank of Spain will take over management of the troubled lender, known as CCM, and inject liquidity to keep it afloat, backed by government loan guarantees of up to €9 billion ($12 billion).

Spain's publicly traded banks have weathered the financial storm remarkably well thus far--but that's only half the story. Around 48% of Spain's lending business is in the hands of cajas de ahorro, unlisted savings banks largely controlled by the country's regional governments. Amid the collapse in the Spanish construction sector and an ensuing jump in delinquent loans, many of these are in trouble. The industry body that represents them is calling on the government to take urgent action or face "dramatic consequences." The Spanish government hasn't yet responded.

The European Central Bank is struggling to keep up with the region’s plunging economy, Bloomberg reported. Even as President Jean-Claude Trichet and his colleagues prepare to cut interest rates to a record low today, the 16 nations that share the euro are mired in a recession deeper than envisioned in their worst-case scenario just three months ago. The pain is building as companies including chemical-maker BASF SE cut investment and jobs, Spain and Ireland run an increasing risk of default and trade partners to the east crumble.

Hayman Advisors LP, the firm that earned $500 million betting on the U.S. subprime mortgage-market collapse, says Europe’s monetary union is about to fall apart, Bloomberg reported. Richard Howard, a managing director for global markets at Dallas-based Hayman, said Germany may opt to shore up its own economy, Europe’s biggest, rather than bail out fellow euro nations such as Austria, Italy and Spain as their banks sag under the weight of bad debts. That might lead to defaults and compel Germany to renounce the euro, he said.