Personal Finance News & Advice

The Spanish economy is expected to in the first quarter a contraction equivalent to that of the last quarter of 2011, said Minister of Economy of the country in an interview published Monday, confirming that economy is in recession.

"If you had asked me this question two months ago, I would have thought the first quarter of 2012 would have been much worse than the last quarter of last year. But this does not happen, "said Luis de Guindos according to the interview given to El Mundo

." At the moment, I see a first quarter like the last quarter of last year. "

These words fall in line with other such statements recent times by members of the government, suggesting that Spain is in recession again

. gross domestic product (GDP) declined 0.3% in the fourth quarter of 2011, but the fall of the Euribor rate, used to adjust interest rates on mortgages of the Spaniards, had brought a strip ger respite to the economy, said Luis de Guindos. 

According to many economists, the Spanish economy will contract more strongly than projected in the government, while the austerity measures be put in place gradually.

Yields of Spanish debt to ten years have passed Monday morning to above 6% for the first time since the beginning of the year, while the Spanish CDS reached new highs, a sign As tensions in the bond market countries 'peripheral' in the euro area have not improved.

The Minister of Economy also said that the government would take further measures to help small and medium enterprises solvent to obtain credit from banks.

Spain will struggle to meet its deficit targets for 2012 and 2013 despite the austerity measures announced Friday as the country, the unemployment rate the highest European Union, is fast falling into recession.

The savings of more than 27 billion euros announced Friday at the government level, including 15 billion already announced in December through tax increases and spending cuts, were well received. The euro appreciated in stride. Brussels wants the Spanish public deficit is reduced by 3.2 percentage points this year compared to 8.5% of gross domestic product (GDP) posted in 2011.

"The central government could achieve its goal, but there is always the risk areas of the budget and Social Security," said an economist with the think tank Funcas Angel Laborda.

Regional authorities, which represent about half of the estimates, which were responsible for much of the deviation budget last year, must reduce their deficit in half this year. 

But, given the few details released Friday on how the restrictions on the central government level will affect the regions – the allocation will be specified in parliament Tuesday – no remains unclear how affected will be the 17 autonomous regions.

One thing is certain, the regions, which have control over health spending and education, will be forced to make unpopular spending cuts, which is likely to fuel public resentment, as we have seen during the general strike Thursday. 

CONTROVERSY

The tax amnesty presented Friday, which offers a reduced tax rate on income were not reported, is the single most criticized in the e ; editorials of the press Saturday. This means that for 2.5 billion euros to go into state coffers, 25 billion should be declared.

"The injustice is flagrant, it is questionable from an ethical point of view and this will affect the credibility of the government in its fight against tax evasion," the daily El Mundo de sensitivity conservative.

Government President Mariano Rajoy expressed his opposition to tax increases, including those linked to consumption such as VAT. But if the measures announced Friday did not support reducing the deficit – the objective is to reduce it to 5.3% of GDP this year and 3% next year – a new tax increases may be inevitable.

The Spanish economy is expected to contract 2.7% this year in a country where unemployment is 23% of the workforce. That rate rose to 50% for youth under 25. If taxes were to increase, there will be more difficult to revive growth.

According to El Pais, the sensitivity of the left, Mariano Rajoy was wrong to put pressure on Brussels to the accordance of a target lower than the 4.4% originally planned. It should instead request a two-year extension of the goal for 2013.

"It is very likely that the government must raise taxes again later this year. The economic recession will make it difficult. There are strategies to exit of the recession. All are risky and require a strong message of higher taxes. None of this appeared yesterday, "writes El Pais.

PSA Peugeot-Citroëna announced Friday that he was studying with General Motors, as part of their alliance, the feasibility of developments on common platforms for large segments of small sedans and minivans.

The French carmaker also announced in a statement issued at the end of a European Works Council, the offset of 7 months of the industrialization phase of the DCT gearbox whose production is envisaged on the site of Valenciennes.

"During this period, it was decided to explore cheaper ways including those offered by the alliance with GM to allow the group to have a box that kind, "said PSA. 

The suspension of a proposed C-segment car – compact type – provided on the site of Madrid is also confirmed.

PSA also said in a statement it was studying GM with the launch of a program of small cars for emerging markets, with a first potential application in Latin America , and co-development of a platform for small cars with low CO2 emissions.

Faced with labor unions determined, employers eventually agreed that the increase in supplementary pensions not only integrates the forecasts of price increases for 2012, but inflation in 2011. The chamber, which wanted the increase will not exceed 1.56%, due to the financial situation of supplementary pension funds, has finally accepted the request of trade unions.

Good news for 11 million pensioners in the private sector. The supplementary pension will be uprated by 2.3% in April 1st, the two organizations announced Agirc-Arrco in a joint statement confirming the information Echos and Le Figaro.

As a reminder, the MEDEF wanted the increase will not exceed 1.56%, highlighting the difficult financial situation of supplementary pension funds. In 2010, Agirc-Arrco had an overall deficit of over € 350 million (surplus of 355 million euros for Arrco – deficit of 709 million euros for Agirc).

But the unions did not see it that way. They demanded an increase of 2.3% to integrate not only the price increase planned for this year but inflation last year (0.55 points). They finally succeeded with an average annual increase of 2.25% for Arrco and 1.82% for Agirc.

Basic pensions (CNAV), for their part should be uprated by 2.2% on the same date, says Le Figaro.

Groupama, forced to sell assets to strengthen its financial solvency, announced Thursday an annual net loss of 1.81 billion euros, its accounts have been sealed by heavy dice depreciations linked to the crisis.

The mutual insurer said in a statement on spending in fiscal 2011 to 3 billion euros of writedowns and exceptional losses, including $ 1.55 billion on Greek sovereign debt.

In late 2011, its equity capital amounted to EUR 5.3 billion against 7.0 billion a year earlier.

Groupama has sold its subsidiary EUROCOURTAGE and its activities in Britain.

The rating agency has again lowered the credit rating of Greece, "C", which corresponds to an almost certain risk of default. Moody's in New York.

The U.S. rating agency Moody's said Friday night that lowered the credit rating of Greece to "Ca" to "C" to reflect the launch of the restructuring of public debt in Athens. This operation "entails expected losses of more than 70% for investors" who will participate, Moody's wrote in a statement.

Moody's assigns a "C", the lowest possible rating on its classification as it deems to borrowers on the edge of default, while a rating of "Ca" she attributed so far to the Greek public debt corresponds to the speculative issuers in which the failure seems likely. The agency says that in his view, the swap of debt proposed by the Greek government to its private sector creditors, whose success is imperative to allow "the provision [of Athens] a additional financial assistance of the euro area "will return, if completed, a" default "on" Greek government ". The agency was then referred to the new European rescue plan providing 130 billion euros of aid set in motion Thursday.

Its rival Standard & Poor's lowered the credit rating Monday of Greece to "SD", a level corresponding to "selective default", to reflect the debt erase operation launched three days earlier. S & P said it planned to raise the rating to CCC of the country, which she attributed to poor quality of issuers with a real risk of default, where such operation would have been fully completed, probably in mid- in March.

This is not the case of Moody's, which does not assign "perspective" to the Greek note, sign it refuses to speculate on what could be its evolution after the debt swap consumed. "Regarding the future, the program of the European Union and the proposed debt exchange will reduce the debt burden for Greece, but the risk of default of the country will remain high even after this exchange has been completed, "the agency wrote.  

"Moody's believes that Greece still faces challenges in the medium term solvency: the ratio of public debt to GDP is well above 100% for several years," the statement added.

Restructuring launched Feb. 24 to allow Greece to obtain a cancellation of debt of 107 billion euros. Athens proposes to give private creditors participating in the operation of securities worth less than 53.5% of those they currently hold. A quarter of those titles that creditors will receive bonds from the European Stability (EFSF), presumably with a maximum maturity of two years. The rest will consist of new Greek bonds with maturities ranging from 11 to 30 years, a period much greater than those they replace. Because interest rates that will yield these securities loss to creditors should be around 73%.

Casino Monday will consider the offer to purchase its share made by Monoprix, Galeries Lafayette, said Philippe Houze, chief executive of Galeries Lafayette and Monoprix CEO.

Galeries Lafayette and Casino disagree on the value of their joint venture, the first finding to 1.35 billion euros from 50%.

"Galeries Lafayette reiterated their offer on Feb. 10 at Casino redeem its share to 1.35 billion euros," said Philippe Houze in an interview with Le Figaro on Saturday.

The CEO of Casino "Jean-Charles Naouri assured me that the offer would be considered at Monday's council," he adds. "We have the means to finance the offer, if accepted."

The gross domestic product (GDP) contracted by German 0.2% in the fourth quarter, after rising 0.6% between July and September, confirmed Friday the federal Office ; Deral Statistics.

German growth has slowed to 1.5% annual pace in the fourth quarter after 2.6% last quarter, hampered by a slowdown in foreign trade and consumption.

Exports fell 0.8% in the quarter, after growing 2.6% last quarter.

The net trade subtracted 0.3 percentage points to GDP in the fourth quarter, while domestic demand added 0.1 percentage points, says the Office of Statistics, whose data de ; finitives were fitted to the seasonal values. 

The German budget deficit fell to 1.0% of GDP in 2011 against 4.3% in 2010.

European shares start up Friday, continuing a rebound started the day late in the session, in the wake of Wall Street and Asian markets as investors regained confidence in the ability of Greece to get its second aid plan and avoid a disorderly default.

The euro area provides the finishing touches on a second aid plan for Greece so that the finance ministers can approve Monday, European officials said.

At 9:22, the CAC 40 index is 1.02% to 3,427.77 points, having pressed upon opening the pivot points of 3410.

The Euro Stoxx 50 gained 0.91%, the Frankfurt Stock Exchange 0.7% and 0.4% in London. 

The financial and cyclical stocks are leading gains in Europe, including a gain of more than 3% for SG. Lafarge gained nearly 4% after its results and the announcement of a 14% reduction of its debt.

Meanwhile, the cost of borrowing from Italy and Spain fall in the bond market, thereby enhancing

yield spreads with those of Germany.

Lagardère Tuesday reported a turnover slightly below expectations for 2011, hit by the decline in revenues in publishing, and announced ; significant writedowns of around 900 million euros.

The media group has gone through a year 2011 marked heckled by two warnings on its results, a controversy over its leader Arnaud Lagardère and a fall of over 30% of his title scholarship. 

"In 2011, taking into account both an economic and market environment deteriorated, and other performances (recorded in the second half) and prospects for the industry Unlimited, should lead impairment in value of a significant amount, "the group said in a statement, referring to its division dedicated to sport and entertainment.

Lagardère adds that he also revised down the value in its accounts of its 20% stake in Canal + France.

The full year, revenue came out to 7.657 billion euros, against 7.966 billion during the previous year, an increase of 0.2% on a comparable basis. 

The Thomson Reuters consensus I / B / E / S brought out a turnover of 7.684 billion euros on the basis of estimates of 18 analysts.

The group, which will publish its full year results on March 8, confirmed its forecast of a decline of 5 to 12% of its recurring EBIT before associates (EBIT) for 2011 Media .

The stock closed Monday at 1.51% to 23.1450 euros. Since the beginning of the year, it was up 13.5%, compared with increases of 4.62% of the media sector index.