Spain

Jittery businessmen in Catalonia, spooked by signs the recent tumult over the region's latest bid to secede from Spain is hurting the local economy, have put their investment plans on ice as they brace for the Catalan parliamentary election on Thursday, the International New York Times reported on an Associated Press story. Catalan retail sales and tourist arrivals are falling and unemployment is edging higher, recent figures show.

Global hedge fund managers have said they are willing to pursue the Spanish government in the courts for a “zillion years” until they get a full payout over a series of bankrupt toll roads, the Financial Times reported. The group, some of whom were involved in the protracted fight over billions of unpaid debt in Argentina, are looking to wring up to €4.5bn from the government — enough to make a dent in Spain’s budget deficit.

Spain’s constitutional crisis in Catalonia will lower the country’s projected economic growth next year, according to Madrid’s finance minister. Luis de Guindos said the country’s GDP growth projection had been lowered by about 0.4-0.5 percentage points to 2.3 per cent next year — “a small impact” as a result of events in Catalonia, which accounts for a fifth of Spain’s GDP, the Financial Times reported. Speaking in Brussels on Monday, Mr de Guindos said the government’s projections would likely match the European Commission’s latest economic forecasts due on Thursday.

Spanish bonds were shaken and the country’s stocks erased two days of gains as Prime Minister Mariano Rajoy’s government deployed its ultimate constitutional weapon in a bid to bring Catalonia’s bid for independence to an end, Bloomberg News reported. Spain’s 10-year bond yield climbed from a one-month low after the country said it will move forward with the process of suspending the powers of the Catalan government following Regional President Carles Puigdemont’s refusal to drop his claim to independence.

Financial markets have swung their attention towards Spain after the Catalan regional government held a contested independence vote on Sunday, setting it on a collision course with Madrid, the Financial Times reported. Investors have been spooked by the possibility of Catalonia, a region with an economy roughly the size of Portugal, breaking away from Spain, risking a constitutional crisis and derailing its recovery from a severe recession. Madrid-listed shares are under pressure while yields on debt issued by the Spanish and Catalan regional governments have risen.

Business in Catalonia has warned that political instability, violence and legal uncertainty could deter investment and hurt the economy, as tensions escalate ahead of the region’s planned independence referendum on Sunday, the Financial Times reported. The region, one of Spain’s richest, has an economy the size of Portugal and its government has promised to declare independence within 48 hours of a Yes vote — despite Spanish courts ruling the referendum illegal and Madrid’s plans to prevent the vote.

Brazil’s Mines and Energy Ministry has canceled nine licenses to build transmission lines that had been granted to Spain’s Abengoa SA after the company abandoned construction works in 2015, a senior official said on Wednesday. The decision formalizing cancellation of the licenses was published in the Wednesday edition of the official gazette, Reuters reported. The cancellation will not exempt the company from paying legal fines related to projects, according to the decision. The company did not have an immediate comment on the cancellation of the licenses.

When Juan Velayos left his job at the accountancy firm PwC to become chief executive of Spanish housebuilder Neinor Homes two years ago, some people thought he was crazy. Construction companies in Spain once built more residential homes every year than the rest of western Europe combined, fuelled by cheap debt. But a 35 per cent slump in prices after the 2007 financial crisis left much of the sector bankrupt, the Financial Times reported.

A group of bondholders in failed Banco Popular have filed an appeal against Spain’s banking bailout fund, their law firm said on Thursday, after the bank’s rescue landed them with 850 million euros ($1.02 billion) of losses, Reuters reported. European authorities orchestrated a rescue of Spain’s then sixth-biggest lender in early June which wiped out shareholders and junior bondholders while Popular was sold for a nominal one euro to larger rival Banco Santander.

When EU authorities wiped out some of Banco Popular’s bonds last month, it looked as if credit default swaps might finally compensate bank debt investors for their losses with little controversy, the Financial Times reported. Credit derivatives written against the failed Spanish lender’s junior debt were triggered in a matter of days and, given that these bonds were now worthless, it seemed self-evident to many that owners of the CDS would get paid in full.