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Spain's Rajoy confronts reality

The Spanish Prime Minister is backing a few steps away from his deficit reduction plan
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A massive demonstration last week in Valencia Spain. It was in response to police violence against an earlier demonstration by students protesting austerity cuts to education, and youth unemployment. (JOSE JORDAN/AFP/Getty Images)

Mariano Rajoy was sworn in as Spanish Prime Minister just before Christmas and pledged to meet EU imposed budget targets for 2012/13 of reducing his country's deficit to 4.4 percent of GDP this year from an estimated 6 percent in 2011/12

Then he saw the books.

Then the EU's economists forecast a recession throughout the euro zone including a prediction that Spain's economy would shrink by more than 1 percent in 2012.

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Spanish judge Baltasar Garzon cleared in Franco-era crime probe

Baltasar Garzon, best known outside Spain for securing the 1998 arrest in London of former Chilean dictator Augusto Pinochet, had argued that crimes against humanity should not be subject to a 1977 amnesty law voted through parliament.

Spanish duke in court over corruption scandal

Scores of placard-waving anti-monarchy protesters staged a demonstration nearby as Urdangarin, a 44-year-old former Olympic handball player, arrived at the high court in Palma with his lawyer.

Spain's economy shrinks, raising recession fears

Official data published Thursday showed that the country’s economy contracted 0.3 percent in the fourth quarter of 2011 after stagnating in the third quarter.

Alberto Contador banned for two years over doping, loses 2010 Tour de France title

One of only five men with titles in the Tour de France, the Giro d’Italia and the Vuelta a España, Contador tested positive for the banned anabolic agent clenbuterol, a muscle-building and weight-loss drug, on the final rest day of the 2010 Tour.

Spanish Supreme Court refuses to drop case against Judge Baltasar Garzon

Lawyers for two private groups, Clean Hands and Liberty and Identity, are pressing charges against Garzon, best known outside the country for securing the 1998 arrest in London of former Chilean dictator Augusto Pinochet.

Spanish study: Fried foods not so bad for you after all

It may be ok to indulge your mood for soul food

I knew it, fried foods aren't that bad for you.  Certainly most people I know who eat fried chicken regularly are happier - at least happier than I am. I love Southern cooking as much as one Yankee can but have spent decades denying myself maximum consumption because of fears of heart disease.

But a Spanish study conducted following more than 40,000 adults from the mid-1990's to the mid-noughties showed that is not true. The results have just been published in the British Medical Journal, (the language is a bit technical but you can read it here)

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Austerity bites, pt. 2

Second thoughts about austerity cuts as the cure for what ails Europe's economies
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Retired hedge fund manager George Soros at Davos today. He expressed concern that the euro zone's austerity policies would create social unrest that would engulf Europe. (VINCENZO PINTO/AFP/Getty Images)

Austerity cuts seems to be the theme of my blog posts today. Heavily indebted European governments need to "deleverage," as the current buzz word has it, but how far and, crucially, how fast?

In Britain, despite warnings from the opposition Labour Party about the pace and size of cuts doing more harm than good, Britain's Conservative-led coalition government has reduced the size of government spending with abandon. Predictably Prime Minister David Cameron's austerity program has landed the country on the door-step of a double-dip recession. The economy contracted in the last quarter of 2011 by 0.2 percent.

At Prime Minister's Question Time today, Cameron contemptuously swatted away criticism from Labour leader Ed Miliband. But that is party politics. The IMF's chief economist Olivier Blanchard is no left-wing politician and he told the BBC today it would be wise for Cameron and his Chancellor of the Exchequer George Osborne to slow down the pace of the cuts.

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Baltasar Garzon’s trial puts spotlight on Spain’s years of war and dictatorship

BRUSSELS, Belgium — Trial reopens wounds almost 40 years since death of the Spanish dictator.

IMF report sharply downgrades global growth and blames the euro. European daily economic round-up

IMF dramatic revision of figures projects euro zone as a whole will be in recession in 2012

The IMF has sharply cut its growth forecast for the global economy this year and reason number one is the euro area. Just last September, in its World Economic Outlook, the IMF had projected world output to grow by 4 percent in 2012, now because of the euro zone debt crisis it expects growth of just 3.3 percent. The organization made clear what this dramatic reassessment means.

“Given the depth of the 2009 recession, these growth rates are too sluggish to make a major dent in very high unemployment,” the IMF said.

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