Spain News Roundup of the Week: May 6 – May 12, 2012

Economic news dominates this week’s roundup with two – count ’em, two! – stories about money matters. Let’s start with a continuation of a topic we discussed last week.

 

The Bolivia Red Eléctrica story has stretched from last week into this one. Proving once more that your economic power is only as strong as your reputation, after the hand-wringing and general complaints about the YPF nationalization in Argentina, followed by exactly no action on the part of Spain, Bolivia has announced that it will be paying a small fraction of REE’s value, “or maybe nothing at all“. This was not entirely unexpected on Bolivia’s part. The Hydrocarbon Minister (what a fun job that must be) announced early on in the week that most of the cables, towers, and so on that the government would be taking over from Spain were old and in very bad condition. But you can see the downward turn of events here: first the government of Argentina decides to buy the shares of its oil company that are owned by Spain. Feeling encouraged by their success, the government of Bolivia then decides to buy up the Spanish-owned shares of its electric company. Argentina then announces the price it will pay for the oil company shares, which is far below what Spain expected to receive. Now Bolivia is trying to do the same for the electric company shares. Article #1 is a very interesting interview with Spain’s Minister of Foreign Affairs about both cases. He argues that punitive measures against either country would harm the people of Argentina and Bolivia instead of their governments. Best quote: “What would have been the forceful response? Send the Army to Argentina?” [“¿Cuál hubiera sido la respuesta contundente? ¿Mandar el Ejército a Argentina?”, translation mine]

Money matters internally are thorny as well. The saga of Bankia began on the 7th, when the bank’s president, Rodrigo Rato, resigned. This isn’t just a guy who wated to retire either; this decision was made under pressure from the highest levels of government. The bank is considered the keystone of the government’s plan to restructure the financial system in Spain. Rato suggested a replacement and assured investors that the bank was still solvent, but once again, reputation is key in the financial sector. By the 8th, the Minister of Finance had to announce that the government had no plans to nationalize Bankia and El País was publishing a FAQ for those who had money in Bankia accounts. On the 9th, the government announced that it was “studying” a partial nationalization of the bank, and by the end of the day it was all over: Article #2 announces the nationalization of Bankia. Will it help? Time will tell . . .

Article #3 caught my eye because I find everything to do with Gibraltar fascinating. I think it is because I never knew how bitter feelings were over British ownership of the territory. Prince Edward (Charles’s younger brother) and his wife Sophie will be visiting Gibraltar (although the article mostly refers to the place as “el Peñon”- the Rock) on June 13th, and the Spanish government is not happy about this. The King and Queen of Spain once even boycotted the royal wedding when Charles and Diana stopped over in Gibraltar. So now, the article strongly hints that the Spanish government is studying possibly standing up the Queen of England and refusing to send King Juan Carlos to the Olympic inauguration at the end of July.

Speaking of the Olympics, article #4 discusses the crucial intersection of athletes at the pinnacle of fitness and fashion. Oh, you didn’t think that was crucial? Think again; the clothing designs for the Spanish Olympic athletes are coming under heavy criticism. The main complaints are that the designers are Russian, not Spanish, and it would have shown more Spanish pride to highlight a national company at the Olympics. Also, that the clothes are ugly. Government officials have defended themselves by saying that the designs were offered to them free of charge, while a Spanish designer would have charged money. Unsurprisingly, this has not quelled the controversy. A recent political cartoon manages to link Olympic uniforms AND the financial sector, depicting athletes in patchwork clothes and naming the designer as the IMF. Meanwhile the Russian company claims that the images shown to the public were not the final designs.

There are so many soccer leagues here in Europe that I can’t keep them all straight. First there was the Copa del Rey, the final of which will be played in a mere 12 days – Athletic Club de Bilbao and Barça. Then there was the Champions League, in which Real Madrid and Barça both had a shot, but both teams lost in the semifinals. Then there was the League championship, which Real Madrid won last week. Now the soccer news is about the Europa League, which had two Spanish teams make it to the finals – Athletic Club de Bilbao, and Atlético de Madrid. They played each other in Bucarest on the 9th and Madrid won, sparking intense celebration at the Neptune fountain in Madrid (each team has an area where they congregate when their team wins, which is kind of interesting. Real Madrid gathers at the Plaza de Cibeles). Article #5 details the win, along with the 3 other times Atlético has won the Europa League.

 

I’ll sign off here for now this week. Be sure to keep your eyes peeled for next week’s roundup – the 1 year anniversary of the May 15th protests is on Tuesday, and I want to save the news stories I have accumulating on that for my next post. Until then, may your Olympic gear be the height of fashion.

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