Spain rolls out all its artillery to placate international markets

[Ognir]

http://www.elpais.com/articulo/english/ ... peng_4/Ten

Spain came out firing on all fronts Friday in answer to those who would predict economic downfall along the lines of Greece and Ireland. The three-pronged counter attack was conducted in the areas of political argument, finance and public accounts. But while the assault contained the country's sovereign debt risk, it made little impact on the local stock market.

The first political salvo came from Prime Minster José Luis Rodríguez Zapatero who said there was "absolutely" no chance Spain would have to ask for a bailout from fellow euro-zone members. The Socialist leader challenged market speculators, warning them that they would lose money if they continued to bet against his country, speaking in a radio interview. Zapatero also reminded investors and analysts that the deficit reduction was bang on schedule. His administration has successfully trimmed the public accounts shortfall by over 40 percent in the first nine months of 2010, putting it on track to meet the 9.3 percent target by the end of the year.

The prime minister added that no new cuts were on the horizon, despite the OECD's warning Thursday that his government should "stand ready" to make further reductions.

The next line of defense was financial, from Bank of Spain's Deputy Governor Javier Arístegui, who announced new, more detailed reporting requirements for banks.

The supervisor's measures are aimed at allaying fears that stress tests were flawed, following the collapse of Irish banks that had passed with flying colors last July.

Arístegui said Spanish banks would now be expected to provide extra detail on their real estate portfolio, which tracked the deterioration of assets - a source of concern to markets- starting from next year.

Economy Minister Elena Salgado rejoined that the transparency offered by banks was equivalent to an ongoing stress test, during an unscheduled news conference appearance.

The minister added that "transparency" was the best reaction to those who- with vested interests or otherwise- questioned the Spanish economy. Salgado then spoke up for Spain's public coffers, reiterating that the government is on track with the austerity measures promised to Brussels.

Investors initially reacted positively to Spain's offensive. The country's risk premium- the best indicator of investor confidence in a country's finances- made a minor improvement. It closed with a minimal rise of 0.3 basis points at 243, following a week of record highs.

But the markets seemed impervious to the government's attempts to establish calm. Uncertainty continued to take its toll on Spanish companies, with the Ibex blue chip index falling seven percent in total this week, making this the worst run since May when the Greek financial crisis hit.

[abduLMaria]

maybe they can sell the license for the Running of the Bulls to some rich American.

poetic justice - "Bush Family sponsors Spanish ritual, Changes Name to Running of the Bullshit".

so I guess Spain has possibly pushed off concern about their collapse to 2011.