In order to avoid becoming another because of the debt crisis forced the country to the EU for help, the euro zone’s fourth largest economy, Spain began a process of painful self-help. The first day of December, Spanish Prime Minister Jose Zapatero announced a cut from the sale of state assets to the welfare of a series of major measures to cut expenditure in order to restore investor and financial situation of the country’s economic confidence.

Encouraged by this news, the Spanish stock market rose for two consecutive days, the yields are also sharply lower. As the Spanish government is determined to reduce the deficit in return, the country’s number 2 at the Treasury auction of billions of euros to obtain the investors over-subscribed.

Data reduction benefits traitorous

Recent debt crisis in Ireland continue to simmer, so that Spain, which is also facing the euro-zone countries with high debt under immense pressure, the country’s national debt has continued to sell-off record high yield.

In order to avoid the situation continues to deteriorate and even took the old Greece and Ireland, the Spanish government began to take the initiative to carry out painful self-help measures. 1, Spanish Prime Minister Jose Luis Rodriguez Zapatero unveiled an economic proposal to increase revenue by cutting spending and to improve the country’s financial situation, so that investors believe that Spain will not be reduced to the European Union to seek assistance. In order to show that the government’s attention, even Zapatero canceled plans to visit Argentina in person in the country waiting to be held on the 3rd of this month cabinet approved the proposal.

Spain last year, the fiscal deficit to GDP ratio was 11.1%, second only to Greece and Ireland, and this year’s budget deficit is expected to be almost 100 billion euros, accounting for 9.3% of GDP.

Zapatero plans to include two aspects. The first is the sale of major domestic airport operators and state lottery of part of the shares. The Government previously planned to sell the Airport and Aviation Authority of Spain about 30% of the shares, but now the proportion of shares proposed for sale is 49%. In addition, the Real Madrid Barajas Airport and Barcelona Airport Pratt will also be private franchise. Spain, a state government will also sell 30% stake in the lottery agency, which last year net profit of EUR 3.0 billion.

Bond offering to sell large

Jose Luis Rodriguez Zapatero’s plan also included the contents of stimulating the economy. According to plan, the government will exempt about 40,000 small and medium enterprises taxes to stimulate investment and employment.

Spanish government’s austerity measures initiated by the European Union welcomed.阿尔塔法赫 European Commission spokesman said the new initiative confirms the substantive implementation of the reform program of the Spanish government’s determination to continue, but also help consolidate the confidence of investors in Spain.

Madrid is visiting U.S. Deputy Treasury Secretary Brainerd Zapatero also expressed appreciation for the efforts, saying the ambitious measures will help address the current challenges.

In the bond market, Madrid’s move has received immediate results. 2, Spain successfully sold 25 billion euros in 3-year bond, which is the country of Ireland from the EU rescue plan announced late last month, the first time since issuance, the test of investor confidence in the euro area countries. The average final bid was 3.717 percent interest rate, far exceeding the 7 October when the 2.527% bonds. However, the interest rate level is still lower than similar bonds in the secondary market interest rates.

From the Spanish central bank announced the sale results, the demand for good investors to reach a multiple of 2.27 times over-subscribed, even more than Spain in October when the level of issuance was 2.16 times over-subscription ratio.

See the reaction from the financial markets, the Spanish government’s “cut costs” measures have been clearly recognized by many investors. 2, Spain, bond yields fell for a second day, the country’s stock market rose sharply for a second day. The first trading day in December, Spain’s benchmark stock index rose 4.44%, the highest since this year’s second-largest single-day gain. After the opening bell on Thursday, the Spanish stock market continues to soar, was more than 2% intraday gain.

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