ECONOMY

In Brief

Spain pays more in debt auction as fears persist MADRID (AFP) – Spain was forced to offer sharply higher yields on three-year bonds in an auction yesterday, a sign that market fears are persisting over its economy despite new government measures. The Spanish Treasury raised 2.468 billion euros (3.256 billion dollars) for the bonds that mature on October 31, 2013, within its target range. But the average yield offered was sharply higher than at the last similar auction on October 7, at 3.717 percent, up from 2.527 percent previously. The bonds attracted strong demand with offers of 5.599 billion euros, a government spokesman told AFP. And despite the higher interest rates, the Madrid stock market was up more than 3.0 percent following the announcement. UniCredit Bank strategist Chiara Cremonesi said the auction was reasonably well received, taking into consideration the current environment. The sale «sends a reassuring message to investors, after the recent speculation on contagion of the sovereign debt crisis to Spain,» she said, according to Dow Jones Newswires. On November 23, Spain was forced to almost double the interest paid on short-term bonds in an auction, its first following the Irish bailout. The main stock market index had closed up 4.44 percent on Wednesday, its second-highest one-day rise this year, after the government announced new measures aimed at reviving the troubled economy and dousing market fears of an Irish-style bailout. Booming overseas business boosts Mytilineos Greek metals and energy group Mytilineos expects double-digit sales growth this year and next, as booming business abroad helps it overcome recession at home, its chief executive said in an interview yesterday. The company, which runs Southeast Europe’s biggest aluminum smelter and is building about half of the gas-fired power stations in Turkey, Syria and Romania, expects sales to rise by nearly 40 percent in 2010 and by about another third in 2011, CEO Evangelos Mytilineos told Reuters. «We expect turnover at about 950 million euros this year… next year we expect it to rise by about a third,» he said. The company’s aluminum and alumina unit, Aluminium of Greece, on Tuesday filled its 2011 order book, helped by commodity-hungry clients in Europe, he said. «We are sold out, we don’t have one kilo more to sell… we will run at full capacity next year, flat out,» Mytilineos said. He expected the group’s metals and mining division to generate revenue of about 400 million euros in 2010, adding that the firm would aim to raise this to 500 million euros in 2011. Mytilineos will soon decide on a $70-80 million investment to boost its alumina production capacity by 300,000 tons a year to a total 1.1 million tons after 2013, Mytilineos said. The group’s flagship unit, power station builder METKA, will be one of the few companies hiring workers in austerity-hit Greece, boosted by a raft of fresh orders in Turkey and Syria. Since 2009, METKA has won orders of about 2 billion euros outside Greece, helping it to cut its dependency from state-controlled electricity utility PPC. (Reuters) Romanian recession Romania extended its economic contraction to a seventh quarter with the second-biggest slump in the European Union after Greece as a tax increase and wage cuts sapped demand, pointing to a «sluggish» recovery in 2011. Gross domestic product contracted 2.5 percent from a year earlier, compared with Greece’s 4.5 drop and a 0.5 percent decline in the second quarter, according to final data released yesterday by the National Statistics Institute in Bucharest. The economy shrank 0.7 percent from the second quarter, when it grew for the first time since 2008. Romania, which took an International Monetary Fund-led bailout last year, is missing out on Europe’s economic recovery because the government raised taxes and cut spending to qualify for the terms of the loan. The plunge in consumer demand means that the country will take longer to return to growth than others in the region, analysts said. «The recovery will be pretty sluggish and very much slower than the pre-crisis levels,» Neil Shearing, an economist at Capital Economics Ltd. (Bloomberg)