Spain has not completed 90% of its financing needs for the year. From the mouth of the Spanish Finance Minister and parroted without any fact checking by the WSJ:
There is much more optimism toward Spain than three or four months ago,” Mr. de Guindos said at a news conference. He said Madrid has completed nearly 90% of the country’s planned debt issuance this year, putting it in an “extremely comfortable” situation ahead of large debt maturities later in the month.
The key word in the quote above is “planned.” Last year, when the finance ministy was creating this year’s budget, it “planned” on a budget deficit of 4.5%. Well, the actual deficit will be closer to 8.5%, so the plan is off.
Here is an analysis I prepared on September 6 calling out the dodgy numbers emanating from Spain:
They’re five weeks old now, so we have to update them. First, let’s figure out Spain’s actual budget deficit this year, 8.5% * €1.18tr = €100.3bn.
Next, we need to add this number to the debt that needs to be rolled over in 2012: €97.8bn + €100.3bn = €198.1bn.
Fortunately, Spain has sold debt maturing in 2013 and beyond totaling €115.7bn. Also, they have €20bn in cash as of the end of September. We’ll be generous and assume that they have the same amount on hand today.
From total financing needs of €198.1bn we subtract year-to-date debt sales and cash on hand: €198.1bn – €115.7bn – €20bn = €62.4bn.
Spain has yet to complete not 10%, but 31% of its financing needs for the year. I doubt that it can pull this off. They would have to sell almost €6bn a week in bonds, which is about twice the rate since January. Spain is in a serious situation, and as Jean-Claude Juncker tells us, “When it gets serious, you have to lie.” De Guindos is taking this to heart.
The ECB, the EU and the IMF are in a tricky spot. If they call out Spain for its shady numbers, it could precipitate a market panic. I do not know why anyone else is not paying attention to these numbers. They are all clicks away on the Spanish Finance Ministry’s website in English.