Spain testing its economic confidence
While major secondary markets, except in US, around the world are getting to positive signs of improving economic performances, Spanish still look bleak to improve their internal situation.
Spanish are waiting for a new debt auction offer from the government today. The Treasury is auctioning between Euro 1.5 to 2 billion in two separate bonds of 2 years and 10 years which fetches 3.30% and 5.85% on maturity.
There are little hopes of the debt auction will revive the economy to positive scale looking at what had happened with Greece. Though Greece economy did make little improvements in last few months, people are still not safe of their investment or job.
Indicators are already visible as Euro depreciated against dollar a day ahead of the action. The investors are worry of further economic turmoil in Europe, likely pushed by failing economies of Spain, Greece and Italy. Thursday’s auction will give snapshot if investors are confident of European recovery. Ireland and Portugal are faring better of all almost ‘bankrupt’ economies in Europe.
The situation in France runs on the same line. Ahead of the presidential polls, France plans to invite over 11 billion euros into the market through bonds yielding 3.01% on maturity.
The new measures to tame the crisis came following the unsuccessful efforts of the European Central Bank to deal with the crisis. The long term re-financing operation of the bank is producing fading effect to the continent’s economy, which had injected over 1 trillion euros into the continent’s financial system recently.
Despite bleak future, economists are hoping a better result from Spain with the auction. “I don’t foresee the need for Spain to come, but there is a lot of money available,” Klaus P. Regling, chief executive of the euro zone’s current bailout fund, said. He added that there were “lots of positive elements in Spain that are ignored at the moment but that, no doubt, over time will become clearer to everybody.”
The Europe crisis is obvious to have significant impact on world over, more specifically to the developing economies. Europe bailout’s positive outcomes are more important to Asian and African developing economies than Europe itself.