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Chatter: More austerity for Spain

Spain gets a steaming second helping of austerity, Japan and China squabble over islands, and Hamas loosens up in the Gaza Strip.
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Graphic. (Antler Agency/GlobalPost)
Spain gets a steaming second helping of austerity, Japan and China squabble over islands, and Hamas loosens up in the Gaza Strip.
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Business Insider: Spanish youth say Merkel reigns supreme

"We do whatever she asks us to do."

Spanish judge Baltasar Garzon goes on trial

Liberal magistrate who had Chilean dictator Augusto Pinochet arrested is now in the dock himself.
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Spanish prosecuting judge Baltasar Garzon puts on his robes at the start of his trial today in Madrid (JAVIER SORIANO/AFP/Getty Images)

To his supporters Baltasar Garzon is a crusader for human rights, a man who truly speaks for the dead, the man who successfully used European law to have the British authorities arrest Chilean dictator Augusto Pinochet in London.

To his detractors, the 56-year old prosecuting magistrate is a meddlesome, liberal jurist who uses his authority to bend the law and carry out vendettas against political opponents.

Garzon was arrested and suspended from his position almost two years ago on three separate charges. Today the first trial got underway in Spain's Supreme Court. He is accused of using illegal wire taps in investigations of some businessmen who funded Spanish Prime Minister Mariano Rajoy's Parti Popular.

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European economic news round-up

Quiet day in the financial markets but heating up elsewhere
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The Occupy movement has begun setting up Camp Igloo in Davos in advance of next week's annual World Economic Forum meeting. (Sean Gallup/AFP/Getty Images)

Update: S&P has just announced it is making one more downgrade, to a critical issuer of European debt: the European Financial Stability Fund has lost its AAA rating. In parallel with France, it has gone from AAA to AA+.

Last Friday, Standard & Poor's downgraded several euro-zone countries credit ratings, most notably France, which went from AAA to AA+. The headline the next day Britain's Guardian newspaper was  "Friday the 13th" with its attendant implications of misfortune.

Today, there was no sign of Jason Voorhees ripping up Europe.  The financial markets shrugged everything off. The CAC 40 in Paris finished up 0.9 percent while the DAX 30 in Frankfurt closed up 1.25 percent. The FTSE in London was up 0.4 percent. Not exciting but not negative.

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Euro zone credit ratings downgrade ... reactions

Friday's Standard & Poor's downgrade of several euro zone countries' credit ratings have only made the faintest ripple across the continent
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French Prime Minister Francois Fillon shrugs off the Standard & Poor's downgrade of France's credit rating late Friday and visits the site of a big infrastructure project: the Cite du Cinema in suburban Paris (BERTRAND GUAY/AFP/Getty Images)

Given the hysteria that greeted the announcement that Standard & Poor's was taking away France's AAA rating (along with that of Austria leaving Germany the only euro zone country with the top rating) - at least in the press - you might have thought the euro zone crisis was going to explode again. Not so.

That isn't to say some political leaders weren't angry. Spanish Prime Minister Mariano Rajoy was, following Spain's downgrade to A from AA-, according to this headline in El Pais.

Rajoy to Standard & Poor's: we don't need economic lessons:

"My government knows perfectly well what it needs to do to improve Spain's reputation, stimulate growth and create jobs," PM fires back after rating downgrade.

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European financial markets say goodbye and good riddance to 2011

Major exchanges were up on the day but down for the year
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The twin symbols of the European economies catastrophic 2011: an Occupy protester outside the European Central Bank (Ralph Orlowski/AFP/Getty Images)
Europe's financial markets lost ground in 2011. Next year doesn't look much better as one of Europe's big economies, Spain, tries to halve its deficit by cutting spending and raising taxes
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"Indignados" return to heart of Madrid

The place where the Occupy movement really started sees its biggest demonstration since the spring
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3,000 people fill Madrid's Puerta del Sol as the Indignados mount their biggest demonstration in months against planned austerity cuts by Spain's new right-wing government (PIERRE-PHILIPPE MARCOU/AFP/Getty Images)
Spain's Indignados return to the Puerta del Sol in the heart of Madrid
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Spain is back in recession

Economy Minister says Spain has "relapsed" in the last quarter of 2011
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It's a tough job but somebody has to do it. Luis de Guindos arrives for his first day of work as Spain's Economy Minister (PEDRO ARMESTRE/AFP/Getty Images)
Economy Minister says Spain has "relapsed" into recession in the last quarter of 2011. Further contraction is expected next year.
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Spain: sombre times ahead

New Prime Minister Mariano Rajoy tells Spanish Parliament the truth: things are bad and be prepared for them to get worse before they get better
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Mariano Rajoy, Spain's new Prime Minister, just before he addresses Parliament yesterday, looks like he's wondering what mess have I got myself into? (DANI POZO/AFP/Getty Images)
New Spanish Prime Minister Mariano Rajoy says times are tough and they will get tougher
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Spain: no respite from the market

New Prime Minister Mariano Rajoy should be the kind of guy the bond market can do business with: a tax-slashing, regulation crushing, debt-reducing conservative, nevertheless the markets are ratcheting up their attack on Spanish bonds
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The sign at Mariano Rajoy's victory rally says "Thanks." By yesterday he was probably thinking "Thanks, for nothing" when it comes to the bond markets. (PIERRE-PHILIPPE MARCOU/AFP/Getty Images)

At a press conference on Monday, Mariano Rajoy, landslide victor in Sunday's Spanish election, asked the markets for a breathing space as he puts together his new government. Tuesday the markets gave him an answer:


They doubled the interest on 90 day Spanish bonds over the price the country had to pay from last month. Spain now pays a higher rate of interest - 5.11 percent - for this short-term paper than Greece.

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