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Spain Seizes Materials Bound for Iran’s Nuclear Program

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MADRID – Spanish police arrested two men and seized the contents of a truck bound for Iran loaded with materials destined for use in the Islamic state’s nuclear program, the Spanish Interior Ministry said on Friday.

The truck, intercepted on a motorway in northern Spain early on Wednesday, was carrying highly corrosion-resistant valves, the ministry said in a statement.

Police were examining computer databases and documents at the company, Fluval Spain, a ministry spokesman said. The two arrested men were employees at the firm, he said . . .

The company had commercial links with Iranian firms that featured on lists drawn up by the European Union as having connections with Tehran’s nuclear program, the ministry said.

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In Surprise Move, Standard & Poor’s Cuts Spain’s Debt Rating to One Step Beyond Junk Status

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Spain’s debt rating was cut to one level above junk by Standard & Poor’s, which cited euro-region peers’ backtracking on a pledge to severe the link between the sovereign and its banks as it considers a second bailout.

The country was lowered two levels to BBB- from BBB+, New York-based S&P said in a statement yesterday. S&P assigned a negative outlook to the nation’s long-term rating and lowered the short-term sovereign level to A-3 from A-2.

The downgrade comes after Spain announced a fifth austerity package in less than a year and published details about stress tests of its banks. Creditworthiness concerns have grown since the government requested as much as 100 billion euros ($129 billion) in European Union aid in June to shore up its lenders and amid signals that the deficit target is in jeopardy.

S&P said the government’s action will probably be constrained by “a policy-setting framework among the euro-zone governments that still lacks predictability.” Recent statements on the European Stability Mechanism’s involvement in bank recapitalizations put into question the mutualization of loans to Spanish banks among euro-region nations, it said.

That possibility was a key factor in S&P’s decision to affirm ratings on Spain on Aug. 1 as it would enable Spanish net general government debt to remain under 80 percent of gross domestic product beyond 2015, it said.

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Eurozone Unemployment Hits Record High While, At the Same Time, One Eurozone Country Has Record Low Unemployment

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The eurozone unemployment rate was 11.4% in August, up from 10.2% last year. Data from the EU statistics agency Eurostat estimated that 25.5 million men and women were out of work over the period, 18.2 million of whom were in the eurozone.

Compared with the previous month the number of unemployed people in the EU rose by 49,000 and in the eurozone by 34,000.

The overall unemployment rate in Spain has reached 25.1%, while the latest data from Greece for June shows a figure of 24.4%. The outlook is far more optimistic in Germany, however, where just 5.5% of people are out of work.

The EU announced on Monday that it will reallocate an extra €2.7bn of structural funds to tackle youth unemployment, on top of the €7.3bn already identified.

The reallocation is part of the EU’s “Youth Opportunities Initiative” which saw pilot programmes set up in the eight EU member states with the highest levels of youth joblessness: Greece, Spain, Portugal, Italy, Lithuania, Slovakia, Ireland and Latvia.

Spain’s Economic Implosion Pushing Outlying Regions to Consider Secession

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The government’s drive to rein in regional overspending as part of its austerity measures has prompted a flare-up in independence fervor in Catalonia, the wealthy northeastern region that generates one-fifth of Spain’s economic output.

Just as the euro zone crisis has strained relations between wealthier nations of the north and heavily indebted countries to the south, Spain’s crisis has aggravated tensions between the central government and its self-governing regions.

Catalonia needs a 5 billion euros bailout from the central state to meet debt payments this year, but Catalans are convinced they bear an unfairly large share of the country’s tax burden.

More than half say they want independence from Spain, the highest level ever.

Artur Mas, the conservative president of Catalonia, announced on Tuesday he would hold early elections in November after Rajoy rejected his call for more tax autonomy. Mas’s Convergence and Union, or CiU, party is likely to win an absolute majority in the regional parliament, which he can use to battle Rajoy over spending cuts.

On Wednesday Mas took things further, saying Catalonia should also hold a referendum on independence, which the central government says would be unconstitutional.

Although an independent Catalonia is a remote possibility, the political instability sends a worrying message to investors. Rajoy’s People’s Party has threatened to take control of the budgets of regions that fail to meet deficit reduction targets despite Catalonia already having made tough austerity measures.

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Spain Recoils, as Its Hungry Forage Trash Bins for a Next Meal; Youth Unemployment at 50%

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On a recent evening, a hip-looking young woman was sorting through a stack of crates outside a fruit and vegetable store here in the working-class neighborhood of Vallecas as it shut down for the night.

At first glance, she looked as if she might be a store employee. But no. The young woman was looking through the day’s trash for her next meal. Already, she had found a dozen aging potatoes she deemed edible and loaded them onto a luggage cart parked nearby.

“When you don’t have enough money,” she said, declining to give her name, “this is what there is.”

The woman, 33, said that she had once worked at the post office but that her unemployment benefits had run out and she was living now on 400 euros a month, about $520. She was squatting with some friends in a building that still had water and electricity, while collecting “a little of everything” from the garbage after stores closed and the streets were dark and quiet.

Such survival tactics are becoming increasingly commonplace here, with an unemployment rate over 50 percent among young people and more and more households having adults without jobs. So pervasive is the problem of scavenging that one Spanish city has resorted to installing locks on supermarket trash bins as a public health precaution.

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US Financial Collapse Likely if Obama Wins Reelection

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As it loses its sovereignty, Spain finds itself in a vortex from which it cannot escape. It has entered into a second recession within three years. It has no money to combat this dilemma, as the private sector is collapsing, and so, as a result, are tax revenues, and the government is stuck with massive social programs. The national unemployment rate as of August 2012 is 24.6%, but for the young (16-24 years of age) it is now 52.9%. For those between the ages of 20 and 29, the rate is 39%. People are withdrawing and hoarding what cash they have, and many are moving to other countries. Tax revenues thus continue to decline, and few businesses will contemplate a start-up or move to Spain under these circumstances. The nation cannot cut spending beyond a certain point without fomenting a national upheaval, and it cannot promote programs to grow the economy. A financial and societal collapse is thus inevitable.

The United States is on the same path.

Since 2008, the nation’s debt has increased by 75% and will, per Obama’s own budget proposal, more than double (up 130%) by the end of an Obama second term, just four years away. The unfunded liabilities of the U.S. are now 14 times larger than the nation’s annual economic output (GDP). Government at all levels (federal, state, and local) is now spending the equivalent of 40% of the nation’s annual GDP. It will increase to 46-plus percent when ObamaCare and other programs are fully implemented.

The real unemployment rate today (counting all who dropped out of the labor force) is approaching 19%, and over 50% of recent college graduates are unemployed or grossly under-employed, with no hope in sight. There has been a concerted effort by this administration to centralize economic control in Washington through onerous mandates, regulations, and proposed taxes, thus discouraging wealth- and job-creation and forcing many businesses to contemplate a move overseas. The result of all the above is little or no economic growth, thus diminishing tax revenues and forcing more reliance on borrowing to fund the promised spending.

Borrowing that will one day in the not too distant future cost the United States an exorbitant interest rate, combined with a demand for real austerity and a de facto loss of sovereignty, would cement in stone an inevitable collapse.

For those who are maybe undecided or enamored of the Obama cult of personality, there is no need to listen to any of the political speeches and the distortions inevitably contained therein or to read green eye-shade economic reports. Just look across the Atlantic Ocean for a reality check and see the future if the Obama team is given four more years.

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