With some 80 billion euros worth of loans by Spanish banks to the country’s completely broken construction and real estate sectors now considered near worthless or at serious risk of default, Spain’s property market has been seen as the root cause to the nation’s current financial turmoil.
Nearly 100,000 social service workers in the Spanish region of Catalonia may not receive any salary for the month of July, claimed a report by AFP on Wednesday, after the Catalan regional government announced that they would be suspending social services’ payments due to a “problem of liquidity.”
The 2020 Summer Olympics could be one of the least expensive ever undertaken in the 21st century, reported the Wall Street Journal on Sunday, after the Spanish capital of Madrid – a finalist to host the games along with Istanbul and Tokyo – vowed to organize the event on a shoestring budget amid tough economic times.
Spain has announced another sweeping round of budget cuts, as Prime Minister Mariano Rajoy warned that the country would struggle to meet its debt reduction targets mandated by the European Union.
In a six-hour address to parliament, Rajoy called on Spaniards to back the new austerity measures which include a value-added tax increase to 21 percent from 18 percent, as well as a reduction of unemployment benefits and public sector wages.
Spain currently has the highest unemployment rate in the eurozone, a staggering 25 percent.
Public employees in Spain may soon have their workdays extended by a few hours each day, reported the Wall Street Journal on Monday, with the government looking to boost efficiency and productivity in the public sector amid the current budget crunch.
The Spanish Budget Minister Cristobal Montoro was speaking at an event organised by a local university when he announced the latest government proposal, which would put public sector working hours on a similar standing as those of the private sector.
As part cost cutting measures aimed at tackling its debt crisis, Spain’s north-eastern region of Catalonia will soon be cutting down on its customary evening snacks for its prison inmates.
According to a regional justice department spokeswoman, who spoke to the Associated Press on the condition of anonymity, inmates will no longer receive evening snacks such as fruit or pastry.
The Spanish “indignant” movement, which began a year ago to protest economic inequality and spending cuts, have expanded their operations to include the creation of food banks for the poor, reported AFP on Thursday, as the activists attempt to shift their focus from simply protesting to building the just society that it advocates.
Spain’s banks must undergo a government-commissioned audit by all four of accounting’s “Big Four” firms, claimed a report by Reuters on Saturday, as the Spanish government attempts to figure out exactly how much would be needed in order to recapitalise the nation’s troubled banking sector.
The crisis growing within Spanish banks at the moment appear to have its roots in the country’s property market. Some 80 billion euros worth of loans by Spanish banks to the country’s broken construction and real estate sectors are now considered near worthless – being at serious risk of default – while the drying up of credit also means that fewer people are able to afford homes.
Public concern over the health of Spain’s financial institutions caused nearly 66.2 billion euros ($82 billion) to be withdraw from the country over the month of March, said the Bank of Spain on Thursday, as the country faces a financial shortfall that threatens to send government borrowing costs to euro-era highs.
Over the first quarter of the year, 97 billion euros ($120 billion) was sent abroad from Spain – with withdrawals in March alone hitting figures that had not been seen since official records began in 1990.
