Wednesday press round-up: Spanish meltdown, Facebook share plunge...

Date: Wednesday 30 May 2012

In the Financial Times, the lead is an apparent rejection by the European Central Bank of a proposal by the Spanish government to recapitalise its beleaguered lender Bankia. Spain, says the FT, wants to issue new bonds which it would give to Bankia, which it could then swap for cash at the ECB. Spain is currently struggling under 140bn euros of bad loans in the property sector and there are now fears the country’s debts could bring about the end of the Euro currency area.

The Times leads with the same story but makes more prominent the sense of disarray engulfing Spain, following the resignation of the governor of its central bank, Miguel Ángel Fernández Ordóñez, last night. He has faced criticism for letting the banking crisis get out of hand.

The Times also notes the continuing plunge in Facebook’s share price after it sank a further 5% in New York yesterday. The stock has now fallen 24.6% since the IPO on May 21st.

The Telegraph leads on news Eurozone countries could be fined by Brussels for breaching financial agreements. The EU Commission now has the power to fine countries which exceed targets for spending and borrowing. The story suggests Italy and France could both be in the firing line, as well Spain.

As well as touching on the Facebook story (described as “the worst IPO in a decade”) the Telegraph also reports on a German plan to force the imperiled countries within the Eurozone to put up gold and national treasuries as collateral in return for a €2.3tn stabilisation plan (one imagine this is unlikely to be well received in Greece...)

The Guardian leads with the same story as the Telegraph, the so called Eurozone “report cards” under which some countries could be fined for breaking debt and deficit agreements.

The Guardian has also nicked the rather touching Robert Peston story of Lord Browne, the former boss of BP urging an end to “intolerance of homosexuality” in business. Lord Browne was caught up in a rather nasty court case during which his own homosexuality was revealed.

The Independent business pages have the story of a £3m fine for a hedge fund manager who “lied” about losses he made in the wake of the Lehman collapse.

The Daily Mail has the interesting tale of savers who bought “with-profits” bonds at the peak of the stock market but who now face fines of up to £4000 to get their money back. Rather shockingly there is also a good news(!) story about Britain's economy “showing signs of life” after a recruitment surge amongst retailers.

In the Scotsman the business lead is a £9m investment by a German firm in a laser research centre in Glasgow.

BS

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