Spanish Information Blog: 2011

The first area called “City Adventure” will include three major attractions. One of them will be based on the film Titanic and will feature a huge reproduction of the ocean liner. This area will also host one of three roller coasters to be built in the park based on “The Italian Job” and a virtual reality feature entitled “Mission Impossible”.

The second area, “Lost Valley”, will feature a water ride recreating a trip down the Congo river along with a recreation of the crypt from Tomb Raider and a rollercoaster based on the legend of Beowulf.

Especially designed for children is the “Woodland Fantasy” area. A more tranquil offering, dominated by a large tree and featuring magic workshops and interactive adventures including one based on the “Spiderwick Chronicles”.

Plaza Futura is the cutting edge technology area which will feature Star Trek and a spectacular recreation of “War of the Worlds”. Not for the faint hearted this area will feature a passage of terror based on the feature film “Paranormal Activity”.

The centerpiece of the park will be an avenue flanked by hotels, restaurants and a shopping centre with a pavilion focusing on the attractions of the region of Murcia and Spain.

Over one billion Euros is to be invested in the park which will employ in excess of 10,000 people during the course of construction. The park will also contain an auditorium with capacity for 15,000 people and the largest convention centre in the region of Murcia capable of accommodating over 3,000 people in its main hall.

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Wednesday, 27 July 2011

Spain's Financial Worries Mount

A mighty row is brewing over regional funding and debt

La Razón today

El Mundo notes that the Government is not going to make the payments to the PP regions which are over the deficit limit.
The paper says that the Government is demanding they follow an adjustment plan. Elena Salgado has said that she does not believe the shortfall claims made by Barreda, and has written to Cospedal to turn the screw. The Junta de Castilla-La Mancha meanwhile blames the Ministry for Hacienda for the cuts which are needed to make the accounts balance.

Read more:

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Water Cuts Likely in Murcia Region Today

The Mancomunidad de Canales del Taibilla (MCT) are continuing with repair works and improvement works in the Túnel del Roble up in Moratalla.

Water feeding down to the south comes via this water piping, so a warning has been issued by Mazarrón council that supplies could be affected in their municipality from 6pm on Wednesday 27th July.

No indication is available of when the water will be back on.

This may also affect residents in other bordering municipalities which all rely on their supplies from the main source, so make sure there are a few bottles of water sitting in the garage just in case.

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Saturday, 9 July 2011

Latest Investment News For Paramount Theme Park

An article has appeared in the La Verdad newspaper today, discussing the future of the Paramount Murcia Theme park which is destined for construction in the municipality of Alhama.

Since the presentation of the conceptual project on March 25th, estate agents have been waiting with baited breath for the news that investment funds have been secured and construction can begin, but although there have been rumours, no formal announcement has yet been made to confirm that investment has been secured.

A team have been carrying out a full viability study on behalf of the Paramount Licensing corporation, and it may be no coincidence that today´s article appears to revise the construction investment estimate to 1.3 billion.

A short time ago a most peculiar article appeared in la Opinión, which hinted at the visit by a mysterious Russian Investor to look at the proposed location for the project, who although he remained mysteriously referred to as " the Russian with no name" throughout the article, raised quite a few eyebrows by stealthily concealing his identity inside a top of the range luxury gold Rolls Royce, having arrived via private jet.

La Verdad have named him today as Oleg Boyko.

Oleg Boyko is a Forbes listed billionaire, who although he has been involved in a wide range of businesses, is currently the majority owner of Ritzio Entertainment, which operates over 1000 Entertainment venues across Russia, Latin America and Europe, a combination of casinos, gaming clubs, night clubs, bars and restaurants.

One of the first possible sources of revenue for the park discussed in the early days of the project was the possibility that this had the potential to attract a casino investor, Russia being an obvious source of investment for this type of product. It´s a logical entertainment partner for a focal point which aims to keep a captive audience within a purpose built complex, spending their money on site and Ritzio are keen to extend further into Europe as gaming controls within Russia are tightened. Europe is also seen as a lucrative development market with no major chain dominating the market, and good operating profits achievable following the existing model developed by the company which employs over 25,000 staff.

However, this is only speculation at the moment, so here´s a fairly accurate representation of the story published today in La Verdad:

The route map for the Paramount theme park is being followed on time, according to the Regional Government, and it is hoped that construction on the site in Alhama de Murcia will start as soon as February. Before that, though, all the urbanism and planning paperwork needs to be finished by the Town Hall of Alhama and the Autonomous Community.

Sources within the company Proyectos Emblemáticos de la Región de Murcia, whose president is Jesús Samper, estimate that an initial investment of 300 million euros will be sufficient to begin work and finish preparing the park itself. Another 1,000 million euros will then be needed to complete the project, and this will happen in various phases related to the different commercial areas and hotels which will be situated both inside and outside the park. The cost of these areas will be borne by the companies taking part in the project.

The promoters believe that the progress of the work will be fast, and it could be finished in 2014, a year before the original prediction, to coincide with the planned opening of the high-speed train line connecting Murcia to the rest of Spain.

In total the development will occupy 108 hectares of land, 37 of which will be home to the actual park. The final studies will be completed in September, and will be taken on a "road show" tour to recruit funds in London, New York, Shanghai and the UAE, among other places.

Some investment funds and business groups have already expressed an interest in taking part in the project, and earlier this year there was a meeting in Madrid with staff of the Chinese Embassy in Spain. Furthermore, a few days ago Murcia was visited by the Russian multi-millionaire Oleg Boyko, who has amassed one of the largest fortunes in Eastern Europe. He came on a lightning visit to find out personally about the planned development.

The Regional Government remains convinced that this project would never have been feasible in the Region of Murcia without the hew airport, which will be just 15 minutes' drive away. The airport could provide as many as three million visitors a year, and Proyectos Emblemáticos is counting on those visitors. Apparently, the first thing that Paramount representatives and consultants do when they visit the Region is take a look at the new airport. Sr Valcarcel's administration believes that San Javier is too small to cater for so many visitors, although sources at AENA disagree, saying that San Javier could carry three million passengers a year.

Last month experts from a consultancy firm specializing in theme parks came to the Region of Murcia to assess the viability of the project. The company has been commissioned by Paramount's management team to compile the final studies for the development.

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Saturday, 2 April 2011

Master Plan for Paramount Theme Park Unveiled

The masterplan for the Paramount theme park in Murcia was unveiled at an official function last week, with an expected opening date set for 2015.

The park will be located in an 158 hectare site on the Mazarron/Alhama de Murcia border, about 15 minutes from the beach and marina resort of Puerto de Mazarron. It will be zoned into different thematic areas inspired by the likes of Star Trek, Titanic and Mission Impossible plus a much larger ‘Lifestyle Centre’ with no less than two five-star hotels, three of four-star status and several more three-star resorts. Also announced were themed shopping malls, restaurants, bars and clubs, a conference centre with the largest meeting room capacity in Murcia – over 3,000 seats – and an open-air auditorium to host 15,000 people.

Chris Mercer, Director of Murcia-based Mercers headquartered in Mazarron, said: “It is indeed a huge privilege to be the recipient of a landmark Theme Park in the local area that will rival Disneyland Paris and attract millions of visitors each year. It’s also highly encouraging to follow the progress that has been made on the masterplan in terms of design, investment and timescales. Samper estimated on Friday that the project would directly create 10,000 construction jobs and upon opening, many more. Undoubtedly Paramount will have a positive effect locally - not least on the property market and house values. We have been through some hard times but Paramount’s confidence and faith proves that the lure and attraction of Spain will prevail.”

Michael Bartok, the executive vice president for licensing at Paramount Pictures, reiterated that Spain was “key” to his company and highlighted Murcia’s 300 sunny days each year as a major bonus. Meanwhile Valcárcel was quick to make reference to the current economic climate in his speech saying that the Theme Park was being launched “with the support and enthusiasm of some and the doubt of others”. He felt that in times of crisis what you cannot do is “stand still” and “while the road is tough, the outcome is sure.” It is reported that Flagship Projects and Paramount Pictures have signed the license agreement for 30 years - renewable for an unspecified period.

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Wednesday, 30 March 2011

More News About Paramount!

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San Javier Airport in Murcia to Remain Open?

A.E.N.A., the Spanish Airports Authority, has denied claims by the Murcia President, Ramón Luis Valcárcel that San Javier airport will close once the new international airport at Corvera opens.

A spokesperson for A.E.N.A. said that it had just spent €67 million on building a new runway and traffic control tower and renovating the terminal, so why would they close it; it didn't make sense.
The second runway at San Javier airport was officially opened on Friday March 18th, allowing more daytime domestic flights.

On Monday March 28th the first daytime flights will depart from San Javier with destinations of Manchester, Madrid and London. On Tuesday March 22nd, during a visit to the site of the new Corvera airport, President Ramón Luis Valcárcel commented that he was in negotiation with the government to close San Javier airport to domestic flights and transfer them to the international airport in Corvera when it opens next year.

This comment has since been denied by both the A.E.N.A. and a government spokesperson. At the opening of the new runway in San Javier, the region's Transport Secretary, Isaías Táboas, commented to the Minister of Public Works, José Ballesta, that they were willing to work on a formula that would allow San Javier and Corvera airports to be compatible, thereby providing the region's residents and tourists with the best possible travel options.

The mayor of San Javier, Pepa García, called the President's comments "very strange" and added that there must be a misunderstanding because, "I don´t think he would lie. The airport makes money and allows lots of tourists to visit the region and it will continue to do so in years to come."

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Sunday, 27 March 2011

Latest News About Paramount Theme Park in Murcia

Latest news as from the 25th March 2011.

The Paramount Resort vision was unveiled yesterday by Jesus Samper, president of flagship projects in the Region of Murcia on which the regional government is promoting the park along with executives from Paramount Licensing, which yesterday unveiled the master plan of the park and showed pictures for some of the attractions that will feature in the new theme park.

The forecast of annual visitors will be around 5 million visitors, a figure which studies show will continue to grow over the next 30
The Paramount Park will be the 'envy of Europe " .....

the park project, will be completely different from those currently operating in Spain and Europe, including a unique area in the master plan defined as ‘Lifestyle Center’ in which will include an outdoor auditorium with capacity for 15,000 people, and the largest convention center in the region, with a building capable of accommodating 3,000 people in its main hall.
It will also feature hotels inside the park: two will be five stars, three hotels four star ratings and a further three will be three stars, also included will be entertainment areas and a shopping center such as 'street mall', ie shaped as if it were a city.

Four major areas

The master plan was featured on a presentation video.

The first area is called 'City Adventure', and will include three major attractions. One of them, based on 'Titanic', displaying a huge reproduction of the legendary ocean liner of the White Star Line. Next to this the equally legendary iceberg that sent Titanic to the bottom of the North Atlantic in 1912,
This area also includes one of the three roller coasters in the park, based on 'The Italian Job' and a thriller ride based on the Mission Impossible movies with plenty of virtual reality and fireworks.

From there visitors can access the Lost Valley, where there is a water ride that mimics the Congo River and its dangers, in addition to the reproduction of a crypt-style 'Tomb Raider' set, and a new roller coaster in the legend Beowulf, with dragons included.

To relax the mind and especially designed for children is "Woodland Fantasy", an area dominated by a giant tree with attractions that are less adrenaline filled than the rest.
Magic workshops, interactive adventures in the world of 'Spiderwick Chronicles' and a tavern of a more adult based theme on the legend of the headless horseman 'Sleepy Hollow'

The 4th area is to be called "Space", featuring 'Star Trek' this is going to be in Plaza Futura, the cutting edge of the park. There, in addition to the more modern-motion simulation feel that controls the Enterprise, will also be located a spectacular recreation of 'The War of the Worlds movie', with a battle against aliens with plenty of action.
For those people that like to be terrified you can walk down the passage of terror, which in this case is modernized and updated based on the penultimate success of Paramount, 'Paranormal Activity'. The makers warn that the realism makes this attraction not suitable for people that are frightened to easily.

The centerpiece of the park will be occupied by a large avenue flanked with the hotels and catering areas.

Employment. 10,000 direct jobs in the construction of the park, and at least 700 workers for its operation.
Visitors. The estimates refer to a period of four to five years with an average of between 2.5 and 3 million per year, which would rise to 5 from 2020.
Economic impact. It is estimated that in the tourism sector, growth will be 33% to 15% register with the regional GDP.

Courtesy of Simply Networking March 18th 2011 t´s been announced in the press today, that Proyectos Emblemáticos has now been granted a 30 year licence to build and operate the Paramount Resort Murcia, the Paramount theme park which is to be built in Alhama de Murcia.
The contract has been signed between the Murcian based company and the American multinational in Los Ángeles for a figure believed to be around 2 million euros. the official presentation for the project is 25th March. Construction work should begin later this year, we will have all the latest news and pictures right here!

This week (1st March) a multidisciplinary team from the American Multinational Paramount Pictures have been in the Region of Murcia working with representatives from Proyectos Emblemáticos to develop the master plan of the projected Paramount Murcia theme and leisure park.The name of "Paramount Resort" has been mentioned for the first time in the press coverage of the topic recently, which seems a good name so we´ll refer to the park as the Paramount Resort Murcia from now on.....

The team visited the proposed location at Alhama de Murcia yesterday, which sits on the corner of the the Autovia between Alhama and the Campo of Cartagena, the 602, a total site comprising some 170 hectares.
At the moment it´s a mixture of cultivated almond and citrus trees, some dead almonds and cleared land, indistinguishable from the fields which surround it.
According to the reports which have come out this week there are a number of options being considered about how the park will be structured?
One thing, however, is certain; that this park will be unlike any other park which currently exists, the focus being on new generation technology, innovation and creating an interactive experience for visitors, a worldwide first.
Scale of the construction elements
The land on option covers 170m hectares.
The park complex itself is anticipated to cover 109 of these, leaving space to amplify the park, car parking or accommodation as required
The main park will cover 36.5-37 hectares, with allocations of between 4.8 and 8.8 for each of four hotel complexes. This will be supported by to parking zones of 45 hectares .
A water park of 8.8 hectares could be included in the project
It´s thought at this stage that the park will be roughly the same size as Euro Disney, and the initial plans proposed were for a central park structure with four hotel complexes, each designed to suit varying budgetary requirements surrounding it, very much along the lines of a traditional leisure park structure.
However, other ideas are being considered this week which include amplifying the size of the park structure and locating just one large hotel inside the park structure, and positioning the others slightly further back.
The original visitor figures mooted for the park were a target audience of 4.5 million visitors a year, although again, this week figures of 6 million a year have been mentioned as being achievable, several times more than the visitor figures currently enjoyed by the region.
Inevitably there will be a significant volume of "day user traffic" as well as catering for the residential traffic using hotels within the complex.
The main park area is being projected as covering approximately 37 hectares ( 370,000 square metres) and indications are that it will comprise four distinct leisure zones, one of which may be what´s called an interactive fantasy forest.
The principal feature of the park will be the cinematographic products of Paramount Pictures, at the moment it ´s being said that this could be based around the films Lara Croft, Titanic, The Italian Job and Congo, the visitors actually becoming part of the film experience through the use of the latest audiovisual technology.
Of course, none of this will be confirmed until the plans are formally unveiled.
There´s also discussion about whether a waterpark will be included within the complex, adding an additional 8.8 hectares of attractions into the leisure offering. The region already has one waterpark, based at the Terra Natura site on the outskirts of Murcia, but this is only open for the summer months when the demand from tourist visitors is highest, and is always very busy and well usedduring open time.
Pedro Cruz today said in an interview that the master design will be unveiled at the end of the month, on the 25th March, when Michael Bartok from Paramount Licensing is due to visit the Region.
Along with everyone else, we await the presentation of the master design with a great deal of interest.

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Wednesday, 9 March 2011

Paramount Theme Park Latest News

Paramount Theme park Murcia will have an initial size equivalent to 109 football stadiums and will include four large hotels which will include a theme park of 36.5 hectares and a water park of 9.9 hectares. The park will be called the Paramount Resort and will be the first Paramount park in Europe.

Executives emerge with a few plans today from the Paramount office located in the JC1 office building downtown Murcia
A brief description…Central Park will host the main attractions and will have an area equivalent to 37 football fields. Four hotels will be surrounded by medium and high range for various types of budgets, as exists in Disney Paris. Speaking of comparisons, the promoters say the park will be very similar in size to the French project.

A final plan will be revealed March 25th when Michael Bartok visits the region again to launch the master plan.

Brilliant news for Condado De Alhama owners as the plan takes another very serious step forward, a step that will ultimately put Murcia on the International map. Building for the park should begin before the end of the year.

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Wednesday, 2 February 2011

Paramount Land Deal Sealed

The new Paramount theme park and studios will now be built on land belonging to the privately owned company Intersa, following an agreement on price between the owners and Proyectos Emblematicos led by Jesus Samper. Jesus Samper who is also the owner of Real Murcia Football Club, managed to reach an agreement with Intersa to purchase the land located in the south of Alhama de Murcia adjacent to the Alhama - Cartagena Motorway.

Initially Intersa were planning on building Sierra de Alhama a residential golf complex, but the onset of the crisis made the project non profitable so plans to build were abandoned. Whilst the preferred site for the project was on the Condado de Alhama II site, previously owned by Polaris, an agreement on price could not be achieved with the financial institutions who now own the land, following the economic difficulties experienced by Polaris The land owned by Intersa measures more than 1.5 million square meters, sufficient for the theme park; however Jesus Samper did comment that more land adjacent to Intersas may be purchased for additional parking facilities.

The Alhama council have promised to speed up the necessary permissions which involve a change of use from residential to leisure. A spokesperson from the council stated that this should not take longer than 3 months once Proyectos Emblematicos have the deeds to the land, something which according to Samper will be sorted out next week.

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Wednesday, 26 January 2011

Save Hundred of Euros on Your Electricity Bills

Latest tip from your Spanish Money Saving Expert!

Did you know that you can save yourself hundreds of Euros each year by simply changing your electricity tariff? Many people are still on a standard tariff, or worse still, the "green electricity" tariff with Iberdrola, the Spanish electricity provider.
The tariff can vary but mosty people are on one of the following -
---- 2 monthly bill tariff of 12.99 cents per kilowatt of electricity
---- 1 monthly bill tariff of 14.01 cents per kilowatt of electricity
---- Green energy tariff of 15.37 cents per kilowatt of electricity

However there is another tariff which may save you a considerable amount of money, depending upon your circumstances.
The day and night tariff introduced by Iberdrola works as follows. For 10 hours during the day, the tariff is 16.87 cents per kilowatt but during the other 14 hours the tariff drops to just 6.08 cents per kilowatt.

So, you pay slightly more during the hours from 12pm to 10pm (1pm to 11pm in summer) but pay less than half price from 10pm to 12pm (11pm to 1pm in summer).

The savings can be quite considerable if you consider that appliances such as fridges, pool pumps, air conditioning, electric water heaters and lighting are still running during the night. Also, most people shower in the morning when the tariff is at it's lowest and many people will have cooked breakfast and/or lunch by 12pm (1pm in the summer). Also, washing machines and dishwashers can be put on in the morning.

Iberdrola charge 10 euro for the switch-over as they need to install a second meter.
If you can't be bothered with the hassle of phoning Iberdrola to request the change, let me know and I will do it for you. Send me an email to paul@armstrongvillas.com and I'll tell you how to give me one time authorisation to make the change for you.

This could possible save you 100 euro on each electricity bill so don't ignore it - don't give Iberdrola any more of your hard earned money than you need to.

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Tuesday, 25 January 2011

Spanish Court Makes Landmark Ruling To Protect Bank Guarantees

A Spanish court has made a “landmark ruling” to uphold the principal of bank guarantees on off-plan property despite small-print exonerating the bank from liability.

The judge in Cantabria ruled that the bank, Caja Cantabria, had failed in its duty and ordered it to give the client a full refund of both deposit and staged payments for a unit on an off-plan development which was purchased during the boom but never completed.

The court disregarded small print which stated the bank guarantee had expired, deciding that guarantees could not expire whilst the purchaser still had no home to show for their money.

Although bank guarantees were seen as the ultimate in security by Spanish property investors, we’ve uncovered many cases where the guarantee has been promised but not delivered and everyone from the bank to the lawyer, notary to the developer has seen fit to relieve themselves of responsibility for the failure.

This landmark ruling shows that the Spanish legal system is prepared to apportion blame and will not allow property scams to be brushed under the carpet. It gives us added confidence going forward as we work on behalf of our out of pocket clients

Sadly Spanish Law is not based on precedent in the same way as English Law, but undoubtedly other courts in Spain will take this verdict into account when faced with similar cases of which there are many.

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Important Changes To Spanish Utility Bill Collection

Please Note:

From May 1st 2011, the utility companies (Gas, Water & Electric) in Spain are changing the way in which they will collect their payments. It is very important now to ensure that you have sufficient funds in your bank accounts to cover all bills. If not you will be cut off and could wait up to 40 days to be reconnected. Contact me for more information.

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Friday, 14 January 2011

Banks Force Paramount To Look Elsewhere

Plans for Paramount to build a theme park in Murcia have been dealt a blow by news that they have failed to reach a purchase agreement with the banks that own the land where the park was to be built.
The theme park and movie studios were to be built at Condado de Alhama in Alhama de Murcia but it now appears very unlikely to happen.

Jesus Samper, the President of Proyectos Emblematicos, the company promoting and developing the Paramout project, is now seriously studying the alternative possibility of purchasing land owned by Intersa and two other private companies.

The sites in question are believed to be closer to Cartagena and the new international airport at Corvera.

Minister for Tourism, Alberto Cruz, has expressed his disappointment that an agreement on price has not been reached, as this will slightly delay the project. Jesus Samper is however confident that the project will happen quickly as the council of Alhama de Murcia has also reiterated its promise that all licences and permissions for the project will be give priority.
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Thursday, 13 January 2011

Ferran Adrià Opens New Tapas Bar in Barcelona

Good news for all lovers of Spanish food, well those with cash in their wallets that is, as Ferran Adrià, the master chef of El Bulli, which has been voted Best Restaurant in the World five times, opened a tapas bar in Barcelona yesterday.

The menu at the new establishment, in the Paralelo district of the Catalan capital, boasts dishes similar to those the Spanish chef served at his restaurant on the Costa Brava, including crèpe of Peking duck and marshmallow clouds of lime and cocoa.
But whereas a four-hour banquet of 47 dishes at El Bulli might cost €500 (£415) for two, excluding wine, a meal at 41 Degrees is within reach of those of more modest means. The marshmallow clouds, for instance, will set you back €8.40 (£7), while the crèpe costs €25.50.

The restaurant doesn’t accept reservations.
Apparently the Adrià brothers, Ferran and Albert, plan to open a sit-down tapas restaurant near by next month. It will be called Tickets, will cater for 50 diners at a time and will take reservations.
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Tuesday, 11 January 2011

Financial Battle For Spain Will Be Decisive in 2011

PARIS — In the euro zone’s simmering debt crisis, the Battle of Spain will probably be decisive in 2011.

But the European Union is preparing to fight it with one hand tied behind its back, because Germany is blocking any financial lifeline for a country until it is actually drowning. Astonishingly, China, which pledged last week to buy Spanish government bonds, is doing more to help Madrid than Berlin is.

Since Greece and Ireland received bailouts from the European Union and the International Monetary Fund last year to cope with their swollen public debts and deficits, Portugal has been everyone’s next candidate for a rescue, despite the government’s efforts to put its public finances in order.

In a Reuters poll last week, 44 of 51 economists surveyed expected Lisbon to need a bailout. Only seven thought Spain would need outside help, even though most expected Madrid’s credit rating to suffer another downgrade soon.

Spain has the euro zone’s fourth-largest economy. If it had to be rescued, it would stretch to the limit the capacity of the euro zone’s financial safety net — the €440 billion, or $571 billion, European Financial Stability Facility.

“Spain has a serious, realistic chance of avoiding a program because of the government’s actions to reduce the fiscal deficit, reduce public borrowing needs, make structural economic reforms and repair the financial sector,” a senior E.U. official said.

After months in denial, the minority Socialist government of Prime Minister José Luis Rodríguez Zapatero has acted to cut public spending, increase privatization and bring forward a long-delayed pension overhaul.

Nevertheless, bond market pressure is likely to be fierce, with investors fleeing the debt of peripheral euro-zone governments because of worries about their ability to repay as interest rates rise, and because of fears of write-downs for bondholders.

E.U. officials are searching for ways to reinforce the euro zone’s financial backstop by increasing its effective lending capacity and broadening its scope for action.

But Chancellor Angela Merkel of Germany, facing hostile public opinion and fearing a constitutional court veto, has rejected any pre-emptive standby credit line for troubled euro-zone countries before they are pushed out of the capital markets. Berlin has so far also opposed any increase in the size of the rescue fund and any use of that money to buy sovereign bonds in the secondary market or to help recapitalize troubled banks.

German resistance will be put to the test when euro-zone finance ministers meet Monday to discuss a comprehensive response to the potentially systemic crisis. If they are unable to agree on any strengthening of the financial safety net, that could hasten a backlash in the markets.

“We are quite negative on Portugal,” said Pavan Wadhwa, a European rates strategist at J.P. Morgan, adding that Portugal was expected to be the next to tap the bailout fund. “We’re not so sure about Spain. It’s a question of a toss of the coin.”

Madrid’s fiscal challenge was easier than those of Greece, Portugal and Ireland, Mr. Wadhwa said during a conference call, and the Spanish government is making progress in cutting the budget deficit and using privatization revenue to reduce borrowing needs.

But the market was still pricing in a 15 percent to 20 percent marginal possibility of a Spanish default in each of the next five years.

Spain’s troubles, like Ireland’s, result mostly from the bursting of a real estate bubble that was inflated by low interest rates. Unemployment stands at 20 percent, and the economy is barely growing.

Although Spanish public debt is still well below the euro-zone average and the two biggest commercial banks, Banco Santander and Banco Bilbao Vizcaya Argentaria, which is known as B.B.V.A., are in good shape, the state faces contingent liabilities from a damaged financial sector.

Madrid’s fiscal problems are compounded by the need to recapitalize its unlisted regional savings banks, the cajas, whose numbers were cut by mergers from 45 to 17 in an overhaul last month and which have an unrecognized exposure to bad real estate loans.

“The losses related to the commercial real estate sector are potentially two to three times as big as those linked to the residential sector,” said Laurence Boone, research director at Barclays Capital in Paris.

She considers Spain’s debt situation manageable, provided 10-year bond rates remain below 7 percent. The yield on Spanish bonds with that maturity was about 5.5 percent at the end of last week, but Portugal’s borrowing cost was 6.95 percent and rising.

Spanish banks also have a large exposure to Portuguese public debt, and would suffer if they could not use Portuguese bonds as collateral in central bank liquidity operations.

Both Spain and Portugal face big financing crunches in April and midyear. Portugal must repay more than €12 billion in the first half of 2011. Spain faces bond redemptions of €15 billion in April and another €15 billion in July.

So the euro zone may not have long to build a more effective firewall before the flames start licking around the Iberian Peninsula.

Paul Taylor is a Reuters correspondent.
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Friday, 7 January 2011

Technorati

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Wednesday, 5 January 2011

3 Kings

THROUGHOUT Murcia province and the rest of Spain, tonight will be a very special night, especially for children, who eagerly await the arrival of the Tres Reyes (Three Kings) who come bearing gifts for all.
Find out from your local town hall what time the will visit the streets of your town and enjoy the colourful parade whatever your age!
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