Teropitka Business and Finance

Archive for the ‘Debt and Economic’ Category

The debt of the Spanish economy and slash four billion
The heads of the Ministry of Economy still explaining to foreign investors why they should trust the solvency of the Spanish state, but the fact is that the doubts raised about market analysts and Treasury debt continues unabated. Data are symptomatic of something does not fit: the risk premium paid by long-term debt of Italy against the German bond (credit paradigm) is almost the same as the Spanish, or about one percentage point.

Similarly, the cost of insuring its failure (the so-called credit default swaps) are in both cases about 150 basis points. That said, if the forecast suggests that the Spanish public debt will end this year in 66% of GDP, while the Italian exceed 115% why many of the analysts insist on putting Spain in the same sac Greece or Portugal in terms of default risk, and are more kind to Italy?

A broader analysis of the financial situation of the country may provide some clues. At the end of last year, the overall debt of public administrations, businesses, households and the banking sector were set at 3.9 billion euros, nearly four times the GDP (390% of GDP), doubling in length to the existing beginning of the decade. During this period, despite the progress of the past two years, public sector debt is down two points in relation to GDP, reaching 51%. Meanwhile, private operators have been greatly increased its use of external financing. Non-financial companies now total 143% of GDP, 107% of financial. However, perhaps the situation of families is more relevant to explain the doubts in the markets.

According to the International Financial Analyst estimates based on figures from the Bank of Spain, the household debt has doubled from 2000 to today, to stand at 89% of GDP. This quantum leap coincides with the time period of the housing bubble, which lasted until 2007. Households borrowed volumes difficult to sustain, and the arrival of low cycle has brought a sharp adjustment. As has happened with the rest of the private sector, the household debt has slowed dramatically over the past two years. This lower use of debt is offset over public sector requirements, to the extent that the current account deficit, which measures the external financing needs of the economy, has fallen by almost half from a peak of 10% GDP.

Although having a strong relative increase in the general government debt remains below the European average, then alone does not explain the attacks. The problem I see is that Spain markets may not generate sufficient economic growth to bring its public deficit below 3% of GDP in 2013, as required by the Stability Pact. “Fundamentally, the question of public revenues,” says Sara Baliña, an analyst at AFI. “The key lies in consumption. Households face an unemployment rate of about 20% and a debt still high, the result of the housing boom. We still have to do correction of that debt, so that families will intended to save part of their income than before going to consumption and investment. “

The ECB calls for more control and debt imbalances
The President of the European Central Bank (ECB), Jean-Claude Trichet, claimed yesterday to a higher level of twenty-seven European economic government and warned of the need to go much further than they are negotiating the Ministers of Economy and Finance European Union (EU). Read the rest of this entry »

If this forecast is met, private spending, which accounts for about two-thirds of GDP, would be subdued in the short term media would defeat the Government’s macroeconomic forecasts. The latest update of Stability Program submitted to Brussels puts GDP growth at 2.9% in 2012 and 3.1% in the next year. For these periods, Moncloa with private consumption to grow 3.3 points, something difficult to achieve if the rate of household savings remains at record levels today, according to the Bank of Spain, at the end of 2009 was in 18% of disposable income, and nearly two thirds of it was intended to reduce debt. “If GDP growth is limited to around 2%, in order to comply with the Stability Pact in 2013 is impossible,” Baliña rivets. Read the rest of this entry »

Current economic conditions have had an impact on businesses and individuals. Companies can not survive under current conditions, are in decline and bankruptcy. Banks and business houses, which are considered at risk of sinking so freely. Individuals have also benefited from loans and struggling to compete for their mortgage payments. People have large amounts of debt that can not see any way to save a lot of trouble.

People borrow for various reasons ranging from death just as bad buying behavior in the family, the debt in case of divorce, separation, etc., and exposure to job losses on the debt issue injuries or health problems. The problem with large amounts of debt can be useful to debt counseling. There are many institutes that offer free debt advice and help people back on track. You can get advice and do a search online and depending upon your location, you can receive information and practical advice for the debt service to your area.

You can get useful information on debt, by toll-free number provided in these pages. Some sites have useful information to help to cope with their debt problems to be liable. There are several options available for people who are struggling with debt. You can debt consolidation, tax, finding in terms of debt and managing contracts. Those who can not pay their debts can choose the order of debt or bankruptcy, but both options can be serious repercussions on their future financial situation and her credibility.

Loan debt consolidation, IVA and debt help debt management plans debt management. Before opting for this plan, the debtor must list all your debts in search of the entire household income and expenditure, make a list of priority debts and non priority debts. Once the senior debt is paid and that the money were selected for basic expenses, you can check if it is not money to pay priority debts. May borrowers to repay these debts directly if they wish, or use one of the methods described above listed debt management.