'Eurozone crisis live: 5.6m out of work as pressure piles on Spain - 27 April 2012' diff viewer (7/8)

This article is from the source 'guardian' and was first published or seen on April 27, 2012 07:10 (UTC). It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.guardian.co.uk/business/2012/apr/27/eurozone-crisis-live-downgrade-spain

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Eurozone crisis live: 5.6m out of work as pressure piles on Spain	Eurozone crisis live: 5.6m out of work as pressure piles on Spain
2012-04-27 12:00:04 UTC	2012-04-27 12:40:06 UTC (40 minutes later)
	1.31pm:That US GDP figure is a bit weaker than expected (2.5% was the prediction) and roughly equates to 0.55% per quarter.
	Still, it's better than the UK's negative growth, of course, but disappointing for investors who have sold the dollar as a result.
	My colleague in New York, Dominic Rushe, will have a full story on this shortly.
	1.30pm: The US economy grew by an annualised rate of 2.2% in the first quarter. More follows.
	1.22pm: US first quarter GDP figures will be out in a few minutes. There was a rumour earlier that they will be higher than the 2.5% annualised growth predicted by economists.
	Michael Hewson, CMC analyst, has just tweeted that the figure will come in at 2.6%. Let's see, but looks sure to be better than anything Europe can muster at the minute. Lest we forget.
12.45pm: Just so that no one can accuse of us of not checking our facts, the latest stats (for February) show that 17.1m people were unemployed in the eurozone which means Spain (at 5.6 million) does indeed account for one third.	12.45pm: Just so that no one can accuse of us of not checking our facts, the latest stats (for February) show that 17.1m people were unemployed in the eurozone which means Spain (at 5.6 million) does indeed account for one third.
That has got to be a contender for fact of the day.	That has got to be a contender for fact of the day.
12.22pm: Louise Cooper from BGC, pictured, has written a very good note on the Spanish situation this morning, including the amazing fact (that I haven't checked yet) that one third of the eurozone's unemployed live in Spain.	12.22pm: Louise Cooper from BGC, pictured, has written a very good note on the Spanish situation this morning, including the amazing fact (that I haven't checked yet) that one third of the eurozone's unemployed live in Spain.
Pointing out that bond yields spiked more on the terrible economic data from Spain than on last night's downgrade, she goes on to comment on the state of the country's banks, their exposure to dud property loans and how that compares to Ireland's banks.	Pointing out that bond yields spiked more on the terrible economic data from Spain than on last night's downgrade, she goes on to comment on the state of the country's banks, their exposure to dud property loans and how that compares to Ireland's banks.
She quotes a Bloomberg report in which BNP Paribas analyst Michael Sneyd estimates that Spanish banks need €100-120bn of new capital. Compare that, she says, with the €64bn that much smaller Ireland has pumped into its banks in three years and you begin to get an idea of the scale of the problem.	She quotes a Bloomberg report in which BNP Paribas analyst Michael Sneyd estimates that Spanish banks need €100-120bn of new capital. Compare that, she says, with the €64bn that much smaller Ireland has pumped into its banks in three years and you begin to get an idea of the scale of the problem.
As Louise says:	As Louise says:
That suggests that even Mr Sneyd's terrifying E120bn could be proved optimistically small.	That suggests that even Mr Sneyd's terrifying E120bn could be proved optimistically small.
So the real problem is the size of the property black hole. At the moment, it is best guesstimates as to how much Spanish banks will need to write down their property loans and therefore how large losses will be. The next question then has to be who will pay for the required recapitalisation. The Spanish government doesn't want to - prime minister Rajoy has stated many times that the banks will not receive public money. That leaves bailout money – the EFSF and the ESM – with the cost being taken across Europe and the threat that most of the bailout funds are used just to save Spanish banks. This is likely to provoke fierce political rows across Europe.	So the real problem is the size of the property black hole. At the moment, it is best guesstimates as to how much Spanish banks will need to write down their property loans and therefore how large losses will be. The next question then has to be who will pay for the required recapitalisation. The Spanish government doesn't want to - prime minister Rajoy has stated many times that the banks will not receive public money. That leaves bailout money – the EFSF and the ESM – with the cost being taken across Europe and the threat that most of the bailout funds are used just to save Spanish banks. This is likely to provoke fierce political rows across Europe.
Spain is the fourth largest economy in the Euro zone – this is a lot more serious than the catastrophes of Greece, Portugal and Ireland.	Spain is the fourth largest economy in the Euro zone – this is a lot more serious than the catastrophes of Greece, Portugal and Ireland.
11.42am: To underline the point about the increasingly central debate about austerity, Ian Traynor has been looking at an interview with Angela Merkel in the German press which sets her up for a potentially brusing clash with her neighbour if Francois Hollande wins the French election next weekend.	11.42am: To underline the point about the increasingly central debate about austerity, Ian Traynor has been looking at an interview with Angela Merkel in the German press which sets her up for a potentially brusing clash with her neighbour if Francois Hollande wins the French election next weekend.
Basically she says the fiscal pact cannot be renegotiated.	Basically she says the fiscal pact cannot be renegotiated.
Ian writes:	Ian writes:
Campaign noise? Or are we really heading for a bruising Berlin encounter as soon as Francois Hollande takes the Elysee? (Hollande 10 points ahead of Sarkozy in new poll this morning).	Campaign noise? Or are we really heading for a bruising Berlin encounter as soon as Francois Hollande takes the Elysee? (Hollande 10 points ahead of Sarkozy in new poll this morning).
Chancellor Angela Merkel has strayed back into the French campaign, declaring in no uncertain terms that Hollande's calls for renegotiating the euro fiscal pact are futile.	Chancellor Angela Merkel has strayed back into the French campaign, declaring in no uncertain terms that Hollande's calls for renegotiating the euro fiscal pact are futile.
In an interview published this morning by Germany's large Westdeutsche Allgemeine Zeitungsgruppe, Merkel also reasserts her support for Sarkozy as a political ally with whom she has worked closely throughout the euro crisis. Merkel said:	In an interview published this morning by Germany's large Westdeutsche Allgemeine Zeitungsgruppe, Merkel also reasserts her support for Sarkozy as a political ally with whom she has worked closely throughout the euro crisis. Merkel said:
'The fiscal pact has been negotiated. It was signed by 25 heads of government and has already been ratified by Portugal and Greece. Parliaments everywhere in Europe are poised to pass it. There's a referendum on it in Ireland at the end of May. It cannot be re-negotiated.'	'The fiscal pact has been negotiated. It was signed by 25 heads of government and has already been ratified by Portugal and Greece. Parliaments everywhere in Europe are poised to pass it. There's a referendum on it in Ireland at the end of May. It cannot be re-negotiated.'
Hollande's response was equally to the point when news of the interview filtered out last night, telling French TV that "Germany can't decide on its own for all of Europe".	Hollande's response was equally to the point when news of the interview filtered out last night, telling French TV that "Germany can't decide on its own for all of Europe".
Ian goes on:	Ian goes on:
If he is elected president, he will have a clear mandate from the French people to re-open the pact, Hollande insists, regardless of its ratification stage.	If he is elected president, he will have a clear mandate from the French people to re-open the pact, Hollande insists, regardless of its ratification stage.
Herman Van Rompuy, who runs EU summits as president of the European Council, has written to EU leaders this morning telling them he might summon them to an "informal dinner" in Brussels before the next scheduled summit at the end of June. Early June is being talked about in Brussels.	Herman Van Rompuy, who runs EU summits as president of the European Council, has written to EU leaders this morning telling them he might summon them to an "informal dinner" in Brussels before the next scheduled summit at the end of June. Early June is being talked about in Brussels.
Reflecting the change in tone on how to tackle the euro crisis, triggered by Hollande and Mario Monti in Italy, Van Rompuy told the 27 national leaders: "We have had to deal with the urgent pressures of the sovereign debt crisis. The emphasis should now shift increasingly to prioritising measures that can boost growth and jobs."	Reflecting the change in tone on how to tackle the euro crisis, triggered by Hollande and Mario Monti in Italy, Van Rompuy told the 27 national leaders: "We have had to deal with the urgent pressures of the sovereign debt crisis. The emphasis should now shift increasingly to prioritising measures that can boost growth and jobs."
11.22am: Nearly five years on from the start of the financial crisis and banks are still apologising. It's the turn of Barclays today with chairman Marcus Agius telling the group's agm that chief executive Bob Diamond's pay award was handled badly.	11.22am: Nearly five years on from the start of the financial crisis and banks are still apologising. It's the turn of Barclays today with chairman Marcus Agius telling the group's agm that chief executive Bob Diamond's pay award was handled badly.
Our City editor Jill Treanor is blogging this big event here.	Our City editor Jill Treanor is blogging this big event here.
11.06am: Spain's government will need no reminder that the the key issue in Europe now is whether the German-inspired drive towards €450bn worth of cuts across Europe can hold. We've already seen the Dutch government collapse under the pressure of trying to hit fiscal targets this week and the Czech leadership is also under threat as it trieds to cut.	11.06am: Spain's government will need no reminder that the the key issue in Europe now is whether the German-inspired drive towards €450bn worth of cuts across Europe can hold. We've already seen the Dutch government collapse under the pressure of trying to hit fiscal targets this week and the Czech leadership is also under threat as it trieds to cut.
Joseph Stiglitz, the Nobel-prize winning economist, doesn't think that governments will be able to hold the line. Or at least thinks it will be diisastrous if they do. Yesterday he described the pursuit of austerity measures as "suicidal".	Joseph Stiglitz, the Nobel-prize winning economist, doesn't think that governments will be able to hold the line. Or at least thinks it will be diisastrous if they do. Yesterday he described the pursuit of austerity measures as "suicidal".
According to Bloomberg, he told reporters in Vienna:	According to Bloomberg, he told reporters in Vienna:
There has never been any successful austerity programme in any large country. The European approach definitely is the least promising. I think Europe is headed to a suicide.	There has never been any successful austerity programme in any large country. The European approach definitely is the least promising. I think Europe is headed to a suicide.
If Greece was the only part of Europe that was having austerity, authorities could ignore it, Stiglitz said, "but if you have the UK, France, you know all the countries having austerity, it's like a joint austerity and the economic consequences of that are going to be dire."	If Greece was the only part of Europe that was having austerity, authorities could ignore it, Stiglitz said, "but if you have the UK, France, you know all the countries having austerity, it's like a joint austerity and the economic consequences of that are going to be dire."
10.50am: The markets seem to have shaken off their early pessimism and are heading back up again. FTSE 100 is up 0.16% while, remarkably, Spain's Ibex is now up 0.26%.	10.50am: The markets seem to have shaken off their early pessimism and are heading back up again. FTSE 100 is up 0.16% while, remarkably, Spain's Ibex is now up 0.26%.
Perhaps Italy's successful, though expensive, foray into the bond markets this morning has helped calm some nerves.	Perhaps Italy's successful, though expensive, foray into the bond markets this morning has helped calm some nerves.
10.33am: It's a busy day in euroland and our Europe editor Ian Traynor has been looking at a survey of bank lending by the ECB which suggests that its policy of pumping money into the eurozone is failing.	10.33am: It's a busy day in euroland and our Europe editor Ian Traynor has been looking at a survey of bank lending by the ECB which suggests that its policy of pumping money into the eurozone is failing.
Here he is:	Here he is: