Spain suffers. And Spanish citizens are paying the consequences. On the outskirts of Madrid, brand new apartments, designed for middle-class families, are being sold off for less than half their original price, even for 70 thousand euros. Banks, in order to eliminate them from their assets, offer mortgages up to 100% of the value of the property. repeat offenders? It seems. Bankia's mistakes, the fourth bank in the country which has over 20 billion non-performing loans in its portfolio linked to the brick and mortar sector and which has undergone a semi-nationalization of the Government in order not to implode, do not seem to be doing school.
The government of Mariano Rajoy, a few days ago, launched a second one reform of the financial system aimed at the recapitalization of banks and the conversion of junk assets in the real estate market. To the 54 billion in provisions that Madrid had asked for from credit institutions in February, another 30 will be added. The European Central Bank has sided with Rajoy and has decided to collaborate in the reform of the banking system as regards the valuation of assets and the creation of a "bad bank" to liquidate toxic assets.
But in the meantime, at a macro-economic level, Spanish data continue to disappoint. The unemployment set a new record, confirming itself as the country with the highest number of unemployed in the European Union. In the first quarter of 2012 the jobless reached 24,44% e among young people under 25 the percentage exceeds 50%. The economy is in full recession: in the first three months of 2012, for ithe second consecutive quarter, the GDP recorded a -0,3%. And the demonstrations by the "indignados" of 15-M (May 15), who in recent days, after a year, once again poured into the Plaza del Sol to underline how nothing has changed since then, are an example of the social discontent that pervades the country.
However, Madrid has not yet made any proposals for growth. There is a debate these days cut of over 10 billion euros in health and education which, barring last-minute changes, will be approved in the next few days. The socialist party PSOE calculates that this would lead to the dismissal of over 40 professors.
In times of crisis you know, there are priorities. And for the Spanish prime minister, one of these is the almost 5 billion euro semi-nationalization of Bankia but no plan to relaunch the country. However, the markets are not of the same opinion. Bankia shares lost almost 30% on Thursday, reaching the lowest level since its IPO in July 2011. The Plaza de Madrid continues to suffer and the Ibex, the index which includes the 35 main Spanish companies, has lost 24% since January XNUMXst.
On the bond market, 6,33-year Bonos, the benchmark for calculating the spread with the Bund, achieved a yield of 6,7% which had not been recorded since January when the crisis had become more acute and a maximum of XNUMX had been reached %. The differential with the Bund today exceeded 490 basis points. Spain has now entered the eye of the storm. Our Iberian neighbor needs to find a way to revive its economy as soon as possible, otherwise there is the risk that the vortex will embrace us too.
