Spain puts off burning all of its 'bridges'

MADRID -- As Spain's economy sputters, the 2013 calendar is helping the country do what its politicians can't: cut down the number of public holidays.

In a move to boost productivity, the cash-strapped Spanish government announced earlier this year that it would eliminate Spaniards' beloved puentes, or "bridge" weekends. That's when a holiday falls on a Tuesday or Thursday and, to make a long four-day weekend, workers take off the Monday or Friday in between. Many employers tacitly acquiesce to an extra vacation day, and some close their offices altogether.

With Spain's economy ailing, Prime Minister Mariano Rajoy has called the puentes a luxury his country simply can't afford. So with some exceptions, such as Christmas or New Year's Day, most holidays will be moved to the nearest Monday, creating a three-day weekend instead.

But the government has been mired in negotiations with the Roman Catholic Church, regional governments and labor unions -- all of which want their holidays celebrated on fixed dates, regardless of the day of the week. So despite an agreement with Spain's largest business federation back in January, the calendar of public holidays was not altered in time for the start of the school year two months ago.

By lucky coincidence for the government, most of Spain's 2013 holidays fall on Monday, Friday or weekends anyway, saving politicians the headache of rejiggering the calendar for now. However, two "bridge" weekends will remain, with more in certain regions.

The holiday shuffle will commence in earnest in 2014, Deputy Prime Minister Soraya Sáenz de Santamaría announced Friday. She outlined possible compromises: The Catholic Church, for example, may agree to celebrate All Saints' Day (traditionally Nov. 1) on a Monday, in exchange for having the Day of the Immaculate Conception fixed on Dec. 8. Unions are pushing for Labor Day to remain on May 1, in accordance with most of Europe. Disagreements persist over at least three other holidays.

Spain has an average of 14 religious and municipal holidays per year, 40% more than the United States. Germany has between eight and 11 public holidays, depending on the federal state. France has between 11 and 13, again depending on the region.

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Photo: A swimmer on the beach last week in San Sebastian, Spain. Credit: Juan Herrero / EPA

Eurozone unemployment figures hit a new high

 

This post has been corrected. See bottom for details.

LONDON — Europe’s economic gloom deepened Wednesday on the back of news that unemployment in the 17-nation Eurozone hit another record high in September as the region’s debt crisis continued to sap the confidence of business owners, investors and consumers alike.

About 18.5 million people were out of work in the Eurozone in September, adding up to a jobless rate of 11.6%. That figure exceeds August’s record of 11.5% and follows the worrisome trend of the past half-year, during which unemployment has either remained static or worsened with each successive month.

The grim picture painted by Eurostat, the European Union’s statistical agency, comes as the continent’s debt crisis sits on the cusp of entering its fourth year with no full resolution in sight. Lawmakers in Greece, where the crisis began, are still grappling with another punishing round of austerity cuts demanded by international lenders, while Spain is keeping markets on tenterhooks over whether it will become the latest country to seek a bailout from its European partners.

According to Eurostat, there were 2.2 million more people out of work in September than a year ago in the 17 nations that share the euro currency. Since then, a number of those economies have tumbled back into recession, government debt ratios have risen, commercial lending has dwindled and investors have taken flight.

Spanish politician sentenced to 4 years in Cuba car crash

MEXICO CITY -- A Cuban court has sentenced a conservative Spanish politician to four years in prison for causing an automobile accident that killed two Cuban dissidents who were riding with him, according to news reports. Now the Spanish government is trying to find a way to bring him home.

The Spaniard, Angel Carromero, was found guilty of homicide by a court in the eastern province of Granma, where the accident occurred on July 22, according to a report posted Monday on the Cuban government website Cubadebate (link in Spanish).

The report said that Carromero’s “reckless conduct” behind the wheel had caused the “lamentable” deaths of the two anti-government activists, Oswaldo Paya and Harold Cepero.

Prosecutors, who argued that Carromero was speeding at the time, had originally sought a seven-year sentence.

Paya, the founder of the Christian Liberation Movement, was one of Cuba’s most prominent critics, and Carromero, a member of Spain’s Popular Party, had come to the island to lend him financial and strategic support. The Cuban government said that Carromero had entered the country on a tourist visa but had “illegally” engaged in political activity.

Spanish theater mounts shows -- and a 'carrot rebellion'

BESCANO, Spain -- Theater buffs no longer have to buy tickets for shows staged in this small Spanish village. Instead, they must purchase a rather expensive carrot.

That's the novel admission scheme hit upon by the director of Bescano's municipal theater, Quim Marce. Dismayed by a recent government tax hike on theater-ticket sales, Marce decided to abolish normal tickets and instead sell vouchers for carrots, with "free" admission to the show thrown in.

"We sell one carrot, which costs 13 euros [about $17], which I admit is very expensive for a carrot. But then we give away admission to our shows," Marce, 43, said in an interview Thursday at his theater. "So we end up paying 4% tax on the carrot, rather than 21%, which is the government's new tax rate for theater tickets."

Critics call it tax evasion. The Spanish media call it the Carrot Rebellion, another example of the creative lengths some Spaniards are willing to go to in order to get around austerity measures -- tax hikes and budget cuts -- imposed by the central government in Madrid.

Marce just calls it a way for his little theater to survive in this pretty village of about 4,000 people, in verdant hills about two hours north of Barcelona. With one in four local residents unemployed, even a modest hike in ticket prices might leave his 300-seat theater empty.

"And in this farming region, I naturally thought of carrots," he said.

Classified as a staple, carrots are subject to a 4% tax that was left unchanged when other taxes went up across Spain on Sept. 1. The highest value-added tax (VAT) rate on items like new cars and clothing rose from 18% to 21%, despite a campaign promise by Prime Minister Mariano Rajoy not to touch the top VAT rate, and the sales tax on movie and theater tickets soared from 8% to the new 21% rate.

"It seems to me like a great idea, because culture shouldn't be taxed so much," said Pilar Bayé, 45, a civil servant in Bescano who bought two carrots for admission to a show next month. "Culture should be accessible to all the people."

The Bescano theater's new logo features a carrot with the motto "For the Health of Culture," and is printed on posters tacked up on telephone poles throughout the village and on a huge banner hung in front of cornfields at the entrance to town. Carrots cost 13 euros if you buy them online in advance and 15 euros ($19.55) at the door.

Marce said the theater has re-recorded the standard audio announcement that plays before performances begin, warning the audience to turn off mobile phones.

"Now we've added, 'No chomping loudly on your carrots during the show,' " he said.

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Photo: Residents of one Spanish town can purchase culture with their carrots. Credit: Sam Hodgson / Bloomberg

Latest threat to the Eurozone: Catalonia independence quest

Just when it seemed stability was on the horizon for the tumultuous Eurozone, with Spain getting a grip on its debt financing and a plan to bail out insolvent banks, a fresh threat to the common currency has emerged with Catalonia's reignited drive to secede from the Spanish kingdom.

More than a million residents of the country's most prosperous region rallied for independence in a protest of historic proportions on Sept. 11, Catalonia's National Day. Some  estimates put the crowd as high as 2 million, or more than a quarter of the 7.5 million who live in the northeast region including Barcelona. This week, after Madrid rebuffed Catalonia leader Artur Mas’ demand for more control over his region’s tax revenues, the regional parliament set a Nov. 25 date for polling Catalans on "self-determination."

Spain’s constitution doesn’t empower the regions to call votes on sovereignty and questions of national integrity. But Mas has said his region will go ahead with a referendum without the central authorities’ approval to address what Catalans consider a grave injustice: They pay as much as $20 billion more into national coffers each year than they get back in public services.

The prospect of a national breakup, no matter how remote and fraught with procedural complications, spurred Spanish King Juan Carlos into rare action on a political matter.

“In these circumstances, the worst thing we can do is divide our forces, encourage dissent, chase chimeras and deepen wounds," the king warned in a letter posted on a new palace website, the daily El Pais reported. It was an apparent allusion to the nationalist stirrings that spurred the Spanish Civil War in the 1930s and a dictatorship under Gen. Francisco Franco that endured until his death in 1975. It was the first time the Spanish monarch weighed in on a political issue in more than 30 years.

Other influential Spaniards have also stepped forward to propose compromise, such as a looser federal structure that would give rebellious regions like Catalonia more autonomy without fracturing a country that has also dealt with a Basque separatist movement for decades. Juan Luis Cebrián, media mogul and author, warned last week that all the secession talk threatened to unleash the “wild beast” of right-wing nationalism that shackled Spain’s development for much of the 20^th century.

Catalonia secession is neither a sure thing nor an imminent one, analysts note. Catalans for centuries have been bandying about the idea of independence for their thriving bastion of manufacturing, shipping, tourism and culture. The conservative government of Spanish Prime Minister Mariano Rajoy has made clear that it opposes Catalonia’s bailing on the rest of the kingdom, and it holds what  essentially could be a veto if the region envisions moving into statehood and taking its Eurozone membership with it. By charter, the Eurozone’s 17 members would have to unanimously approve induction of any new euro currency user.

Mas may be stirring the secession quest to force Madrid to cede more power to Catalonia over its own finances. But in an environment of deep public spending cuts, the second bout of recession in four years and unemployment afflicting 1 in every 4 Spaniards, the notion of sheering off the northeastern corner flanked by Andorra, France and the Mediterranean Sea is clearly appealing to many. Catalonia accounts for 20% of the Spanish gross domestic product and a quarter of its exports.

Catalonia secession has long been part of the political landscape in Spain and has just entered a more active phase because of the tough living conditions resulting from European Union austerity measures demanded to keep euro users' national deficits in check, said Fabian Zuleeg, chief economist at the Brussels-based European Policy Center.

"This is potentially more serious, as it reflects a real conflict between the national and regional levels," Zuleeg said. "The way Catalonia sees it, they've been paying in excessively into the national coffers and, because they have their own deficit, they have to go cap in hand to the Spanish government," only to be denied latitude to keep the regional economy on track.

The 2013 budget unveiled Thursday requires all regions to cut back further on already pared public spending and to generate more tax revenue to service staggering national debts. The piled-on austerity measures are fomenting unrest throughout the country, as seen this week in angry protests demanding job creation and investment in growth, which had to be dispersed with tear gas and mass arrests.

The Catalans' reignited campaign for independence "is an escalation but by no means the last act," said Uri Dadush, director of the international economics program at the Carnegie Endowment for International Peace. "But it's another source of tension in Spain, a complicating factor and another way that things could unravel."

Hit by bailouts, failing banks, unsustainable interest rates and mounting public resentment of the severe belt-tightening across the European periphery from Ireland to Greece, the common currency is at risk, Dadush said, of "death by a thousand cuts."

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Photo: More than a million supporters of independence for Catalonia rallied in Barcelona and other cities on Catalonia National Day, Sept. 11, pressing secession as a means of controlling their own finances and preserving their language and culture. Credit: Stefano Buonamici / Bloomberg

Spain says its banks need $76 billion to return to health

MADRID -- Spain's ailing banks need $76 billion to return to health after being hammered by the country's spectacular real estate collapse, independent auditors and the Bank of Spain said Friday.

The long-awaited estimate came after an examination by hundreds of auditors that showed half of the 14 banks under review failing so-called stress tests. The grim result confirmed suspicion about the strength of Spain's financial sector, but did not prompt Madrid to immediately request outside help, despite a line of credit on offer from its European partners.

Nearly half of the overall sum -- about $32 billion -- was needed by a single financial institution:  Bankia, Spain's largest real-estate lender, whose bankruptcy last spring threatened to drag down the country's entire financial system. Bankia, the fourth-largest Spanish bank overall, is a conglomerate of seven regional lenders that together have dangerously high exposure to bad real-estate loans.

In July, European leaders signed an agreement to lend Spain up to $129 billion to recapitalize its banks. Madrid said it would wait to see the outcome of independent audits of the banks before determining how much of the bailout fund it would tap.

After the audit results were published Friday, Spanish officials again declined to specify how much aid they would request.

"With all the nuances, it's difficult to estimate in the end how much help will be necessary," Fernando Jimenez Latorre, secretary of state for the economy, told reporters.

Latorre said the amount could be a third less than that contained in the audit, or about $51 billion. He also left open the possibility that Spanish banks might choose to raise the necessary funds on their own rather than tap public money.

His comments prompted gasps from reporters, who expected Spain to immediately declare how much of the European bailout money it would take. Putting the bank rescue in motion is thought to be a key step toward fortifying the entire Spanish economy against collapse.

Nevertheless, Jean-Claude Juncker, head of the finance ministers' group in the 17-nation Eurozone, said he was "comforted" by the audit results.

"The final state aid provided to Spanish banks will be lower than the reported capital shortfall, given measures to be taken by the banks in accordance [with] their recapitalization and restructuring plans," Juncker said in a statement.

For months, 400 auditors reviewed transactions in 90% of Spain's banking sector, said Fernando Restoy, deputy governor of the Bank of Spain. Seven of the 14 banks under review failed stress tests.

The $76-billion estimate is a pre-tax figure, the auditors said. After factoring in tax payments and bank mergers that are part of an overhaul of Spain's financial sector, the amount necessary to cover the banks' shortfall is $69 billion.

The first batch of loans is scheduled to be sent to the banks in November after approval by Spanish and European officials.

The audit results were published a day after Spain slashed about $50 billion from its budget for next year. By recapitalizing its banks with European help, and cutting spending at home, Spain hopes to avoid having to ask for a second, larger bailout for the government as a whole.

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Photo: A bank is closed during a strike Wednesday in San Sebastian, in northwestern Spain. Credit: Alvaro Barrientos / Associated Press

In Spain, an amusingly botched fresco is now a moneymaker

It was bemoaned as “catastrophic” and “unspeakable,” a botched restoration attempt that transformed a beloved, aging fresco of Jesus Christ into something more closely resembling  an aghast ape.

Now it’s a moneymaker. And Cecilia Gimenez is asking whether she gets a cut.

The elderly woman who took a paintbrush to a church fresco in Spain, transforming the work once known as “Ecce Homo” ("Behold the Man") into what Spanish jokesters dubbed “Ecce Mono” ("Behold the Monkey"), is now exploring her legal rights after the church started charging curious visitors.

The botched restoration has become a tourist draw, bringing in more than 2,000 euros (about $2,600) for the Fundacion Hospital Santi Spiritus in just four days, El Correo reported Wednesday.

Spanish television reported the recently introduced fee for looky-loos at a euro each, money that could be used to restore the fresco with a finer touch or for other charitable purposes. Since the mangled fresco made headlines, shocking and amusing people worldwide, about 30,000 people have flocked to the town of Borja,  while Gimenez is in hiding from the media, reportedly suffering from anxiety. 

U.S. casino mogul Adelson gambles on Madrid as site of EuroVegas

MADRID -- Billionaire casino mogul and GOP donor Sheldon Adelson has decided on the Spanish capital as the location to build EuroVegas, a $21-billion European gambling city to rival Las Vegas.

The project would offer Spain up to a quarter million desperately needed jobs, as the country struggles to avoid an international bailout. Spanish unemployment is near 25%, and more than double that for young people. That's the highest in the Eurozone, the 17 nations that use the euro currency.

But there are conditions. Adelson's company, Las Vegas Sands, says it would fund up to only 35% of the project, leaving Madrid to raise the rest of the money. The firm is also demanding tax breaks and exemptions from local labor laws, and it wants customers to be allowed to smoke freely inside the casinos, despite a nationwide ban on lighting up in most public buildings.

Local politicians nevertheless cheered the choice of Madrid after several months of speculation and a rival bid by Barcelona. Adelson is thought to have personally preferred Madrid, having made an unannounced helicopter trip to one of the proposed casino sites near the capital in the spring.

Opponents of the casino say that the last thing Spain needs to gamble on is another huge construction project. Spain's economy is in dire straits in large part because of a burst real-estate bubble that has left the country awash in empty, unsold homes.

The project would feature a dozen high-rise hotels with a total of 36,000 rooms, 18,000 slot machines and three golf courses. Las Vegas Sands had previously put the cost at $21 billion, though it issued a statement last Friday saying the "size, scope, specific location, and financing options" were still to be determined. Municipal authorities have identified three tracts of land on the outskirts of Madrid as possible construction sites.

"The process is still very much in the early phases, and progress towards resolution of the current economic challenges within Europe will be an important consideration," the company said, leaving open the possibility that Europe's debt crisis could throw a kink into its plans.

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Photo: Protesters in Madrid rally against a massive casino complex that Sheldon Adelson, a wealthy American, wants to build in the Spanish capital. Credit: Gustavo Cuevas / European Pressphoto Agency

Live bullfights return to Spanish public TV after six years

MADRID -- Spanish public television is set to show its first live bullfight in six years Wednesday evening, after the conservative prime minister, a staunch fan, reversed a ban on live broadcasts of the blood sport.

Spain's bullfighting industry has been hurt by the global economic turmoil and a decrease in popularity among the country's youth. In the northeast region of Catalonia, a ban on the practice went into effect earlier this year. Animal rights groups consider the sport cruel.

Six years ago, the then-socialist government in Madrid banned bullfighting from being shown live on public television, arguing that it was inappropriate to broadcast the killing of animals during a time slot, at 6 p.m., when many children were watching.

But current Prime Minister Mariano Rajoy has said he considers bullfighting an art form deeply rooted in Spanish history. After winning elections late last year, Rajoy's conservative Popular Party appointed a new, like-minded management team for Spain's public broadcaster, which decided to resume the airing of live bullfights.

Wednesday night's fight, part of a festival in the northern city of Valladolid, is to be the first in a series of prime-time bullfights to be aired in the coming months. It features three matadors -- including one of Spain's most famous, Julian Lopez, better known "El Juli" -- up against six half-ton bulls.

Both Lopez and the bulls' breeder volunteered to waive payments they would normally receive for broadcast rights in order to encourage the cash-strapped public television service to reverse the ban.

The return of bullfighting to Spanish public TV is a victory for its advocates, who recently convinced the government to reclassify the practice as an art form, protected by the Ministry of Culture, rather than as a sport. When the ban was in place, fans were still able to watch fights on cable TV or regional channels.

Bullfighting was banned in Spain's Canary Islands in 1991, but Catalonia is the only Spanish mainland region where the practice is illegal. The Catalan branch of Spain's public broadcaster has reportedly asked that it be allowed to block the incoming signal from the central broadcaster when the evening bullfight begins.

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Photo: After a six-year ban, Spanish public TV will resume airing live bullfights such as this one, which took place in Pamplona in July. Credit: Alvaro Barrientos / Associated Press

'Behold the Monkey'? Amateur art restoration goes awry in Spain

Art experts are trying to salvage a beloved Spanish fresco of Jesus Christ that was disfigured by an amateur restoration that went miserably awry.

Spanish media reported that an elderly woman, upset by the deterioration of the aging 19th century fresco in the Sanctuary of Mercy Church in the town of Borja, decided to fix it.

The unhappy results were perhaps most memorably compared to "a crayon sketch of a very hairy monkey in an ill-fitting tunic" by the BBC. Spanish jokesters have christened the revamped work once known as "Ecce Homo" -– Behold the Man -– as "Ecce Mono" -– Behold the Monkey.

Taking a more sober tone, the Centro de Estudios Borjanos described as "“unspeakable" its first sight of the redone fresco weeks ago, while doing an inventory of religious art in the area. Though the fresco is not believed to be unusually valuable, it was treasured in the town.

The family of the deceased painter, Elias Garcia Martinez, met with the mayor to express their shock and dismay and to explore the possibilities for legal action, the center said on its blog.

Churchgoer Cecilia Gimenez told Spanish television station TVE on Wednesday that the priest knew about her restoration efforts and that she had done nothing in secret, insisting, "Everyone that entered the church saw me painting!"

Though local officials say the would-be restorer had good intentions, they have not ruled out taking action against her for defacing the artwork, El Mundo reported.

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Photo: A series of images shows the damage to the 19th century "Ecce Homo" fresco by artist Elias Garcia Martinez. The picture on the left shows the original work, the one in the middle the pre-renovated fresco and the one on the right the damaged painting. Credit: Centro de Estudios Borjanos