ECB rejects Madrid plan to boost Bankia
A Spanish plan to recapitalise Bankia, the troubled lender, by indirectly tapping the European Central Bank for cash, was bluntly rejected as unacceptable by the ECB, reports the Financial Times.
News of the rejection came as Spain faces elevated borrowing costs in the bond markets, tries to persuade investors it can contain problems in a banking sector weighed down by €180bn (£144bn) of bad property loans and, on Tuesday, saw its central bank governor stand down early.
Spain reels as high street hits fresh low
The sinking Spanish economy was struck a fresh blow yesterday with retail sales figures for April showing a 9.8 per cent year-on-year fall, the biggest since records began in 2003, reports the Independent.
Spanish fears send euro near to two-year low against dollar
The euro sank to a near two-year low against the dollar on Tuesday amid worries about the solvency of Spanish banks, reports the Guardian. The single currency fell below $1.25 after rating agency Egan-Jones cut the country’s credit rating. Against the pound it was worth 79.95p.
Europe’s debtors must pawn their gold for Eurobond Redemption
Southern Europe’s debtor states must pledge their gold reserves and national treasure as collateral under a €2.3trn stabilisation plan gaining momentum in Germany, reports the Daily Telegraph.
The German scheme – known as the European Redemption Pact – offers a form of “Eurobonds Lite” that can be squared with the German constitution and breaks the political logjam. It is a highly creative way out of the debt crisis, but is not a soft option for Italy, Spain, Portugal, and other states in trouble.
US seeks action on Europe crisis
The Obama administration dispatched one of its top economic officials to Europe on Tuesday to press officials in Greece, Spain, France and Germany to calm a widening crisis that threatens to spark new trouble for the US economy, reports the Wall Street Journal.
Retailers take on more staff for the first time in nearly a decade
Britain’s ailing economy showed signs of life yesterday as it emerged retailers took on more staff this month for the first time in nearly a decade, reports the Daily Mail.
The CBI said the number of people employed in the sector, including on the high street, in shopping centres and at car dealerships, increased in May – ending a decline dating back to February 2003.
MPs question Bank’s new regulatory ‘tools’
The Treasury Select Committee has launched an inquiry into the new regulatory powers the Bank of England will be handed by the government next year, arguing current proposals do not go far enough, reports the Daily Telegraph.
The committee stressed the importance of getting the Financial Policy Committee’s tools correct because of the “unprecedented” power it will have later this year.
WPP chief faces investor revolt over pay
Sir Martin Sorrell, chief executive of WPP, faces a shareholder revolt over his pay after an influential advisory firm recommended investors in the advertising group vote against its board remuneration policies, reports the Financial Times.
Anger over Lagarde’s tax-free salary
The IMF chief Christine Lagarde was accused of hypocrisy yesterday after it emerged that she pays no income tax – just days after blaming the Greeks for causing their financial peril by dodging their own bills, reports the Independent.