Spain

A rented office overlooking a dusty rail track near Madrid’s airport was until recently the workplace of what would appear to be the most productive worker in all of Spain. From here a single employee presided over a company that from 2009 to 2011 made €9.9bn of net profits, all while earning an annual salary of only €55,000, the Financial Times reported.

Spain emerged from two years of recession late this summer, but it faces a long period of more austerity and painful adjustments before it can regain its footing and put most of its six million unemployed back to work, Prime Minister Mariano Rajoy said on Monday, The Wall Street Journal reported. "Spain is out of recession but not out of the crisis," Mr. Rajoy said in an interview with The Wall Street Journal, cautiously touting the effects of budgetary and structural overhauls that have been among the deepest in the euro zone.

Insolvent Spanish fishing firm Pescanova will ask its bank creditors to accept losses of between 70 percent and 75 percent on loans they made the company, a source with knowledge of the matter said on Wednesday, Reuters reported. Pescanova's new chairman Juan Manuel Urgoiti is due to meet with banks on Wednesday to discuss a plan to re-float the firm, which an audit by KPMG showed had debt of 3.6 billion euros ($4.81 billion), making it one of Spain's biggest bankruptcies. Pescanova's creditor banks include Sabadell, Popular, Caixabank and nationalised lender NovaGalicia.

Shareholders in Spain's Pescanova chose Juan Manuel Urgoiti as chairman of the insolvent fishing firm on Thursday, after the company's former head stepped down earlier this year amid charges of insider trading and falsifying information, Reuters reported. Manuel Fernandez de Sousa was removed in April from the helm of the company he had run for more than three decades. He has denied any wrongdoing. Urgoiti sits on the board of directors of retailer Inditex and is a former chairman of Banco Gallego.

Madrid is set to offer a crucial helping hand to Spain’s troubled financial sector by allowing banks such as Santander, BBVA and Banco Sabadell to reclassify billions of euros in deferred tax assets as tax credits, in a move that will make their balance sheets look much stronger. The country’s banks have been lobbying the government for months on the issue of DTAs, arguing that other eurozone countries such as Italy have already made similar changes.

While Spanish manufacturing and services expanded in August for the first time in more than two years, falling bank lending threatens small companies in a country where only 2 percent of businesses employ more than 20 people. That is overshadowing the recovery Prime Minister Mariano Rajoy forecasts after a two-year recession, Bloomberg reported. “Spanish companies are most often small family-run operations,” said Nathalie Gianese, director of studies at Informa D&B, the research arm of Spanish risk insurer CESCE S.A.

As Spaniards endure the worst economic crisis and deepest austerity measures in their country’s democratic history, start-up companies are proliferating, Bloomberg reported. Over the first seven months of the year, registrations of self-employed people increased by 21,992 while they fell by 6,826 over the same period a year earlier. The number of companies created increased by 8.2 percent in the first half as a 26 percent unemployment rate spurs entrepreneurship in a country where the government still accounts for one in six jobs.

Is Spain really on the brink of a remarkable recovery? It's a question with a significance that goes well beyond the troubled Southern European country, The Wall Street Journal reported.

Spanish banks may have to swallow more losses to shake off the legacy of a property crash, real estate experts warn, as they struggle to sell plots of land that have ended up on their books and which are now worth less than many have accounted for, Reuters reported. Lenders were forced by the government to take billions of euros in provisions against losses last year after property values collapsed in 2008, with the steepest writedowns destined to cover land they were saddled with as developers went bust.

Spain’s cuts to renewable energy subsidies will leave many project developers facing bankruptcy, four industry lobby groups said, Bloomberg News reported. Spanish Industry Minister Jose Manuel Soria’s decision to curtail profits for power generators by 2.7 billion euros ($4.1 billion) this year “will lead many installations to bankruptcy because they won’t be able to repay the credit that financed them,” the Spanish Photovoltaic Union (UNEF) said yesterday.