“Spain will return to economic growth in 2014″, says Rajoy

The Spanish Prime Minister insisted that all the measures being taken by the Government of Spain are with a view to economic recovery and added that he anticipates being able to lower taxes in 2014. He also expressed his confidence that employment and growth forecasts contained in the General State Budget for this year will improve and insisted that “2013 will be better. We still may not have reached the lowest point but we will start to see improvement, especially in the latter half of the year, and the economy will start to grow again in 2014″.

In an interview with Cadena Cope earlier this week, Mariano Rajoy said that “reducing the public deficit is our top priority”. It must be lowered to 6.3% this year “at a time of economic recession and a shortage of financing, which is why we have raised taxes and cut spending”. In spite of that, he stressed that no further tax increases are on the cards. “What I want, because I believe in it, is to lower taxes and I hope to do so in 2014″. He also rejected the idea of lowering public sector wages in 2013.

The President of the Government argued that the difficult decisions taken until now have all been “aimed at enabling economic recovery”. The labour reform, the financial restructuring and the reform of public administration services, which he said “we’ve been talking about for 30 years and will now finally be carried out”, are some of those steps, the true effectiveness of which will be revealed when economic activity returns. Rajoy added that, for the time being, Spain is going through a debt reduction process and said “it is very difficult during any process of debt repayment to ensure that money is available for investment and consumption. But this process is essential because otherwise nobody will finance us”.

The Spanish Government newsletter, La Moncloa, reported that when questioned over whether Spain should request aid from the European Union or not, Rajoy reiterated that this decision has yet to be taken. The Government of Spain will eventually make that decision, he explained, and it “will be solely and exclusively aimed at guaranteeing the general interest of every Spanish citizen. I have not discarded the possibility of going down that path; it is an option that remains open to us”.

Article source: Kyero.com

UK rebuffs Spanish challenge to Gibraltar sovereignty

The United Kingdom government has dismissed a request from Spain’s Prime Minister, Mariano Rajoy, for a return to bilateral discussions on matters relating to Gibraltar under an agreement dating back to 1984.

Under the previous administration in Spain, Gibraltar and the UK had made significant progress on contentious issues surrounding Gibraltar’s sovereignty after more than a century of fractious relations. Through the trilateral forum, the three governments engaged on maritime border issues, customs policy and, critically, on tax information exchange. It was hoped that through the signing of a bilateral tax information exchange agreement, Spain would in turn recognize Gibraltar’s status as a transparent, highly-regulated international financial centre, lawfully independent from the United Kingdom.

However, in its election manifesto, the People’s Party, which took office this year, said it would seek to undo the work of the previous government and aim to restore the idea of ‘Two Flags (the United Kingdom and Spain), Three Voices’. This approach would remove Gibraltar’s power of veto over discussions pertinent to the territory and force it to mediate issues with Spain through the United Kingdom, under the terms of the 1984 Brussels Agreement.

Speaking at the General Assembly of the United Nations on September 25, Rajoy called for the United Kingdom to agree to a reset, and the resumption of negotiations under the Brussels process.

In a move welcomed by the Gibraltar government, the UK responded however that it would “not engage in any discussions about Gibraltar that the Gibraltarians don’t want to engage in”.

The Gibraltar government underscored that it had “already made clear that talks under the Brussels process are unacceptable to the government and to the people of Gibraltar”, and expressed hope that with the UK’s backing the matter would be put to rest.

“Gibraltar enjoys a veto on the resumption of bilateral discussions about Gibraltar and that is the end of the matter,” the Gibraltar government stated. “The only dialogue acceptable to the people and government of Gibraltar is a trilateral process, to which Gibraltar and the UK remain strongly committed.”

Article source: Investors Offshore.com

Critics beware – Rajoy v’s The Media

Ana Pastor the latest "political" victim
Ana Pastor the latest “political” victim

As Mariano Rajoy’s government introduce cuts and tax increases to try and fix his huge budget deficit it seems that journalists who question his methods are risking their jobs.

Presenter of Los Desayunos de TVE, Ana Pastor, is the latest neck to be chopped for “political reasons”.

Spanish politicians have got used to having the press on their side but in the face of a financial crisis some difficult questions need to be asked and Pastor was one person prepared to ask and to call her subjects to account.

“They’re getting rid of me for acting as a journalist,” Pastor said.

She is the latest is an ever-growing list of journalists who have dared to question the governments austerity measures and subsequently been removed from their posts at the national RTVE radio and TV channel.

The channel announced the departure on July 4th saying it was because she had refused an offer to present an evening programme.

Pastor explained: “I thought they were going to offer me something [else] but there was nothing of substance. The head of news said we should both think about my future but it was all vague. He said let’s see what happens between now and January. They didn’t want to say I was sacked, but I was, and I’m not one to hang around earning public money and doing nothing.”

She also said that is was plain to see the politicians don’t like “uncomfortable interviews”. Another source at TVE said the government was “allergic to discussion”.

This departure follows the sacking of Fran Llorente who had been the head of news at RTVE and was accused of politcal bias by the government. Another former news anchor, Pepa Buena, said Llorente was “under constant pressure” from government officials.

Healthcare workers angry over new laws for immigrants

Public health protest in Madrid last month
Health workers protest in Madrid last month

Healthcare employees across Spain are uniting as conscientious objectors in protest at new laws that require them to deny treatment to illegal immigrants.

The new royal decree, to be passed on Friday, removes the right to free health care for illegal immigrants in Spain. The decree comes into effect on September 1st.

As a result of the change any immigrants without a residency card will be denied treatment at public hospitals. Exceptions will be made if the person seeking treatment is under 18, pregnant or requires emergency treatment.

The change is part of Mariano Rajoy’s austerity measures intended to reduce public spending to facilitate meeting the budget deficit target set by Europe.

However, healthcare workers have hit out at the decry saying it is “unethical” and “inhumane” and they are registering their objections.

Across Spain over 800 doctors have already signed forms, distributed by the Society of Family and Community Medicine (Semfyc),  objecting to the law.

The doctors are not alone and the government faces a serious backlash against this decry. The Medical College Association has said the new law “violates the ethical principles of medicine and the code of professional ethics”.

Also against it, the Spanish Association of Neuropsychiatry said the law marked “a regression in human rights” in Spain.

Since the measure was announced in April protests have taken place outside hospitals and health ministries across the country.

A number of Spain’s autonomous regions, heavily indebted and with new budgetary  restrictions, have said they will defy Madrid and continue to provide basic healthcare and medication for anyone that needs it, regardless of their residency status.

A full Spanish bailout – will they, wont they?

The European Central Bank
The European Central Bank

As speculation continues to surround the possibility of Spain requesting a full bailout from Europe, the struggling country has given no indication that any decision has been taken.

In an interview on Sunday Spain’s finance minister, Luis de Guindos, said Spain was “in no rush” to request further assistance from Europe and is safe to hold out until more details emerge about a possible European assistance program.

“When we know the details [of the aid program], we’ll have a more precise calendar,” said Sr. de Guindos.

Spanish Prime Minister Mariano Rajoy last week ‘opened the door’ to officially requesting a bailout from the euro-zone fund to help Spain out of the worst financial crisis it has seen.

Last week ECB President Mario Draghi increased the pressure on Spain when he said the ECB was ready to buy government-bonds if a government requests it as a means of support, under strict conditions. This was a mile away from his comments the previous week when he said the ECB was ready to do “whatever it takes” to save the Euro.

This is a u-turn for Mariano Rajoy’s government who have said, until recently, that they will not need a full sovereign bailout, and that the bank funding would be the only help requested, in the hope that the ECB would buy Spanish debt.

However, over recent days the government have had to concede that without intervention from the ECB the government could be left with no choice but to ask for aid.

Reforms ‘Will be a Milestone for Spain’, Says Rajoy

Reforms "will be a milestone for Spain" - Rajoy
Reforms “a milestone for Spain” – Rajoy

Spanish Prime Minister and leader of the PP, Mariano Rajoy, has announced his own new and ambitious structural reforms which, he stressed, “will be a milestone in the modernisation of our country”.

In his address to the PP National Executive Committee, earlier this week in Seville, Rajoy used Spain’s success at the recent European Council summit to launch an optimistic message and reiterate his “reformist speech.”

El Mundo reported that Rajoy welcomed the outcome of this Council, but said that Spain will now “step on the accelerator”. “We will do more and we will do it well,” he said, not without warning of the announced reforms which will have their effect “later”.

Notice to the Regional Governments

Rajoy targeted four immediate reforms – energy, the Administration, unity of market and regulatory bodies – and launched a very specific message to the autonomous communities. In the absence of all the regional chairmen of his party, Rajoy warned that they should make “greater efforts” to reduce the deficit.

Without specifying much beyond his commitment to deficit reduction and the reform of the financial system, the bulk of his speech was aimed at passing on his optimism to the Spanish people.

“I know that the current circumstances are complicated,” Rajoy said, “we have not reached this position by chance or bad luck, but because things have not been done well. As those of you know who protest the government decisions. There are reasons for concern but many more to overcome it. But there is no room for discouragement, and the first step towards success is knowing that we have the best goals to achieve it”.

“I have no doubt that we will,” Rajoy insisted, “I want to convey to you here that I am absolutely convinced that Spain has a great future. Absolutely convinced.”

Courage and confidence

The Prime Minister even specially thanked the collaboration of the Spanish in the Government tasks, saying “The attitude of a great many Spanish fills me with pride,” and “thanks to the Spanish for the courage and the confidence with which they are taking this situation.”

“We Spanish have every reason to trust ourselves. Even at the worst times we have lost the enthusiasm to get ahead. We are not going to sit and wait for things to change, we change them ourselves. I am fully aware that the Government can not do everything, but it can do everything in its power to develop the full capabilities of the Spanish, and so benefit Spain and each other.”

Article source: Kyero.com

Tax increase could kill renewable energy investment

Renewable energy tax increases likely
A wind-farm in Spain

A group of international investors have contacted Spanish prime minister Mariano Rajoy to urge him to reconsider raising taxes on renewable energy.

The group sent a letter to the PM saying that any rise in tax could “put the whole industry at risk of insolvency. Moreover, it will send yet another warning to foreign investors that Spain is no longer a safe place to invest”.

The letter went on to say that should the increase be implemented the investors reserved the right to  take action against Spain under Spanish and European law, and the Energy Charter Treaty, which is designed to protect foreign energy investors.

A letter was also sent to UK Prime Minister David Cameron suggesting that if the change is made it “will probably have a detrimental effect on the UK meeting its low carbon and renewable energy targets, as if made these changes will irreparably damage investor confidence in European regulatory stability.”

What rubbish! Who cares what effect if has on the UK? This is a Spanish tax to raise Spanish money for Spanish residents – the UK can do what they like with their renewable energy. What a bad idea the EU was. No country has any right to tell another what to do, how to treat it’s people or anything else.

This is all about some rich investors somewhere who care little about the poverty being inflicted on people by their greed. This is the problem across the planet – those with money control it all. I personally couldn’t care less about some rich investor losing a little bit of money (or a big one losing a lot). The tax increase is needed to fix the country and make it better for the Spanish, not for some investor who doesn’t even live here. I understand the need for investment in the country but it should be on Spain’s terms, not the investors.

At the end of the day, if Rajoy implements the increase it will raise more money for Spain strengthening the economy and contributing to growth – then the investors will come running. Where else will they go with their wind farms? The North Sea? It costs twice as much to rig a wind turbine in the open ocean as it does to place it on land. So call their bluff, Rajoy. They will still come here even with the increase, they are just trying to save a few quid.

Is Spain running out of options?

Treasury Minister Cristobal Montoro
Treasury Minister Cristobal Montoro

After months of assurances from Spanish Prime Minister Mariano Rajoy that the country will not need an international bailout it seems the reality of the situation has finally hit home as Spain has admitted, for the first time, that it can not raise the money required to refinance the country’s debt.

Asking Europe to stand by the mutual obligations of euro membership the prime minister said Spain is “in an extremely difficult situation,”

“Europe must say where it is going and show that the euro is an irreversible project that is not in danger, that helps nations in difficulty,” he added.

According to treasury minister Cristobal Montoro Spain can no longer raise money as the doors are being closed on them.

“The market is no longer open. The risk premium is telling us that Spain as a state has a problem accessing the market when we need to refinance our debt.”

He also insisted that “the European instistutions must open up and help us facilitate bank recapitalisations.”

Sr Montoro also sent shivers across Europe saying that Spain’s economy is simply to big to be fixed with an EU bailout. “Technically, we can’t really be rescued,” he said.

Montoro said the capital needed for Spain’s banks was substantial but “not astronomic” and would be less than the €40 billion suggested by Santander chief Emilio Botín. “The men in black are not going to come to Spain,” he quipped.

However, despite these comments Spain continues to hold out against making a formal request for help similar to the rescue packages for Greece, Ireland and Portugal, instead asking for EU action to recapitalise Spanish banks.

Spain, the fourth largest eurozone economy, will put two billion euros of bonds up for auction tomorrow which will be considered a key test for the country.

This all comes as the EC plans to outline proposals to stop taxpayers money being used to shore up failing banks, instead making shareholders and creditors responsible for losses. It’s about time, but lets see it put in place before we breathe a sigh of relief.

Spain receives support from Germany

Rajoy with German Chancellor Angela Merkel
Rajoy with German Chancellor Merkel

German Chancellor Angela Merkel has praised Spain’s efforts to tackle the deficit problem and pull Spain from the economic crisis.

Merkel described Spain as an ally and acknowledged that the Prime Minister had inherited a “difficult situation”.

Her comments were welcomed by Spain as EU pressure grows for Mariano Rajoy to reveal the details of the planned banking reforms.

EU leaders are keen to read how Rajoy plans to fund the bailout of ailing Bankia which is likely to cost in the region of €19 billion. Officials are also interested to see if any other Spanish banks are going to follow suit and ask for help.

Spanish Deputy Prime Minister Soraya Saenz de Santamaria flew to Washington last week for a meeting with Christine Lagarde, the head of the International Monetary Fund (IMF) fuelling rumours that Spain is asking for a bailout, something that the IMF denied.

“There is no such plan,” said Lagarde.

Saenz de Santamaria said the purpose of the meeting was how to set up a fund to recapitalise European banks.

“The problem is not Spain as a country,” she said, “but our financial system in a given moment has needs just like the other states had at other times.”

ECB rejects Bankia “backdoor bailout”

Bankia bailout unacceptable
ECB says Bankia bailout is “unacceptable”

European banking officials have called Spain’s €19 billion bailout of struggling Bankia “unacceptable”.

The ECB said the “backdoor bailout” of the bank was not the solution and a proper capital injection was needed for the bank to survive, reported the Financial Times.

The Spanish plan had been to inject 19 billion euros into the banks’ parent firm in bonds which would then be swapped for cash at the ECB’c three-month refinancing window. This money was in addition to a previous 4.5 billion euro package the bank has already received making a total bailout of €23.5 billion, so far.

ECB officials also pointed out that the plan could breach an EU ban on ‘monetary financing’ although policymaker Ewald Nowotny said it is “up to national governments to help banks.”

The comments from the ECB will not help an embattled Spain whose borrowing costs have soared recently and are approaching 7%.

On Monday the risk premium demanded by investors to hold Spain’s 10-year bonds reached its highest since the Euro was launched.

Spanish Foreign minister Jose Manuel Garcia-Margallo said Spain would take care of billions of euros of toxic assets left over from the real estate bubble in 2008 without international help.

However, analysts fear the move could damage the country’s liquidity and worsen the country’s public finances which are already under scrutiny from investors and EU officials. It could also damage the ability of the state to finance itself.

Miguel Angel Fernandez Ordonez, governor of the Bank of Spain, announced yesterday that he intends to step down on June 10, one month earlier than the end of his mandate.

Prime Minister Mariano Rajoy also reiterated his comments that Spain’s government does not need outside financial help, although most economists disagree.

“The point about Spain is it’s going to need some external support of some form,” said David Owen, chief European financial economist at Jefferies.