Economic and Finance
As the "tax the rich" debate rages in Washington D.C., some states are turning to their wealthiest residents to bring in much-needed revenue.
The governors […]
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Orange juice futures surged Tuesday amid fears the U.S. government could ban Brazilian oranges after low levels of fungicide were detected by a juice […]
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A defiant President Barack Obama, tired of Senate Republicans stalling his nominee to lead a new consumer protection agency, put him in charge Wednesday over […]
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+%3Cp%3EPrime+Minister-elect+Mariano+Rajoy+pledged+to+shrink+Spain%92s+public+sector+and+reduce+spending+to+tackle+the+euro+area%92s+third-largest+budget+deficit+without+saying+how+he%92ll+finance+higher+pensions+and+tax+breaks.+%3C%2Fp%3E+%3Cp%3E%93The+one+and+only+part+of+public+spending+that+will+increase+is+pensions%2C%94+Rajoy+told+lawmakers+in+Madrid+today.+%93All+other+components+may+be+reduced.%94+Pensions+accounted+for+112+billion+euros+%28%24146+billion%29+of+spending+in+the+2011+budget.+%3C%2Fp%3E+%3Cp%3ERajoy%2C+whose+People%92s+Party+secured+the+biggest+majority+any+Spanish+party+has+won+since+1982+in+Nov.+20+elections%2C+presented+his+program+in+Parliament+today+before+taking+office+on+Dec.+21.+%3C%2Fp%3E+%3Cp%3ERajoy%2C+who+defeated+the+ruling+Socialists+with+a+campaign+focused+on+the+sovereign+debt+crisis%2C+said+he%92ll+freeze+public+hiring+and+%93reshape%94+the+public+sector+as+he+seeks+to+meet+a+pledge+to+regain+investor+confidence+and+recover+Spain%92s+AAA+credit+rating.+Rajoy+didn%92t+give+details+of+how+he+will+execute+the+16.5+billion+euros+in+spending+cuts+that+the+outgoing+government%92s+budget+plan+shows+are+needed+next+year.+%3C%2Fp%3E+%3Cp%3E%93We+see+where+the+additional+spending+will+come+from%2C+but+I+don%92t+see+where+the+cuts+will+come+from%2C%94+said+Gilles+Moec%2C+co-chief+European+economist+at+Deutsche+Bank+AG+in+London.+%93Increasing+pensions+is+a+bit+surprising%2C+I+would+like+to+see+more+detail.%94+%3C%2Fp%3E+Missing+Target++%3Cp%3ERajoy+said+he%92ll+announce+spending+cuts+at+his+second+Cabinet+meeting+on+Dec.+30+as+Spain%92s+budget+deficit+may+exceed+the+outgoing+government%92s+target+of+6+percent+of+gross+domestic+product+this+year.+A+new+budget+will+be+presented+for+2012+before+March+31%2C+he+said.+%3C%2Fp%3E+%3Cp%3ERajoy+said+one+of+his+first+bills+will+be+a+law+to+flesh+out+a+constitutional+amendment+on+budget+discipline+approved+by+his+party+and+the+outgoing+Socialists+in+September.+The+law+will+call+for+the+debt-to-GDP+ratio+to+be+cut+to+60+percent+by+2020+and+for+the+structural+public+deficit+to+be+limited+to+0.4+percent+of+GDP%2C+he+said+%3Ca+href%3D%22http%3A%2F%2Fus-paydayloans.com%22%3Epaydayloans%3C%2Fa%3E%3C%21–+.+–%3E.+%3C%2Fp%3E+%3Cp%3ERajoy+inherits+an+economy+which+stalled+in+the+third+quarter+and+may+contract+in+the+final+three+months+of+the+year%2C+according+to+the+Bank+of+Spain.+%3C%2Fp%3E+%91Couldn%92t+Be+Darker%92++%3Cp%3E%93Expectations+for+the+next+two+quarters+are+not+good+at+all%2C%94+Rajoy+said.+With+the+economy+%93growing+by+half+the+rate+of+the+rest+of+the+European+Union%2C%94+Spain+is+%93being+left+behind%94+and+%93the+outlook+couldn%92t+be+darker%2C%94+he+said.+%3C%2Fp%3E+%3Cp%3ESpanish+10-year+yields+fell+to+5.13+percent+at+2%3A20+p.m.+in+Madrid+from+5.31+percent+on+Dec.+16%2C+and+as+high+as+6.78+percent+on+Nov.+17%2C+the+most+since+1997.+%3C%2Fp%3E+%3Cp%3EAdding+to+pressure+on+Rajoy%2C+Fitch+Ratings+put+six+euro+members+including+Spain+on+review+for+a+possible+downgrade+on+Dec.+16%2C+saying+a+full+solution+to+the+debt+crisis+is+%93technically+and+politically+beyond+reach.%94+Fitch%2C+which+stripped+Spain+of+its+AAA+rating+in+2010%2C+rates+Spain+AA-.+%3C%2Fp%3E+%3Cp%3EAs+well+as+spending+cuts%2C+Rajoy+said+the+banking+system+needs+to+be+cleaned+up+as+the+industry+tightens+credit+amid+176+billion+euros+of+troubled+assets+linked+to+real+estate.+%3C%2Fp%3E+%3Cp%3EHe+said+banks+would+have+to+straighten+out+their+balance+sheets+by+selling+off+finished+property+and+carrying+out+a+%93very+prudent%94+valuation+of+less-liquid+assets+such+as+land+and+unfinished+real-estate+projects.+%3C%2Fp%3E+%3Cp%3ERajoy+also+pledged+to+overhaul+the+labor+market+in+the+first+quarter+to+give+companies+more+flexibility+on+how+they+organize+and+pay+their+staff.+%3C%2Fp%3E+%3Cp%3ERe-invested+profits+from+companies+will+be+taxed+10+percentage+points+less+than+those+paid+to+shareholders+and+taxes+will+be+reduced+for+small+enterprises%2C+Rajoy+said.+%3C%2Fp%3E+%3Cp%3EHe+told+lawmakers+his+government+would+%93improve%94+the+tax+treatment+of+private+pensions+and+bring+back+a+tax+rebate+for+the+purchase+of+homes.+%3C%2Fp%3E++%3Cp%3E%3Ca+href%3D%27http%3A%2F%2Fwww.bloomberg.com%2Fnews%2F2011-12-19%2Fspanish-power-handover-looms-as-rajoy-weighs-economy-danger-of-budget-cuts.html%27+rel%3D%27nofollow%27%3ESource%3C%2Fa%3E%3C%2Fp%3E+