Saturday 14 April 2012

Ban on cash payments in Spain

Black Market in Spain: Cash Transactions Exceeding 2,500 Euros Now Banned




12 April, 2012


Things are going so "well" in Spain that the Government banned cash payments in excess of 2,500 euros

Via Google Translate from Libre Mercado …

The Prime Minister, Mariano Rajoy, has announced on Wednesday that the plan to combat tax evasion on Friday approved the Cabinet prohibit the payment in cash transactions of over € 2,500 and n which at least involved a businessman professional.

During the control session the Government in the House of the Congress of Deputies and in response to a question about the tax amnesty made by the general coordinator of IU, Cayo Lara, the Prime Minister has revealed that those who violate the ban will face fines of 25% of the payment made ​​in cash.

Black Money

This measure aims to prevent the use of black money in commercial transactions and, in the case of companies, give them an obstacle to not resort to false invoices. The plan to combat fraud adopted on Friday, the Cabinet intends to raise up to 8.171 million euros in 2012.

I calmly predict that black market transactions in Spain will soar as soon as Spain is stupid enough to hike the VAT.

Sadly, such stupidity is just around the corner as noted in Slow Road to Hell: Spain Entertains VAT Hike

Real Anti-Fraud Plan

Once again I am stumbling for a precise translation but I happen to agree with this sentiment (emphasis mine) as translated by Google from the lead article.

The general coordinator of IU Rajoy called on a real anti-fraud plan, with more resources to the tax office, and has taken the opportunity to ask the president that when you announce cuts of 10,000 million euros "do it in Parliament.





Why Next Week Will Be Huge For Spain
Spain is taking a beating in the markets this morning, and that may have a lot to do with bond auctions next week, according to Dow Jones.


13 April, 2012

The Spanish government prepares to auction treasury bills Tuesday and long-dated bonds Thursday. If yesterday's Italian bond auction is any indication, then investors will have ample opportunity to manifest recent recent cynicism and drive yields higher.

Spain front-loaded much of its debt issuance for 2012, and has already auctioned nearly 46 percent of the €86 billion ($113 billion) in debt it planned for the year at its lowest borrowing costs since 2010.

However, this is bad news for Spanish banks, which have purchased large amounts of government bonds with cheap cash from the ECB. Bank of America Merrill Lynch analysts estimated that Spanish had increased government debt holdings by €68 billion since November or €240 billion total—6 percent of Spanish GDP.

The worry is that ratings agencies could downgrade these assets, and banks holding large amounts of securities would be forced to face margin calls or write downs on these assets. This would exacerbate the weakness of the Spanish financial system.

Also on the horizon is a decision from Moody's on the credit ratings of Spanish banks' credit ratings. Morgan Stanely analysts predicted that this is likely to happen on the week of April 23.

The DJ report notes that bond auctions in Germany and France on Thursday will also draw scrutiny








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