Spain Daybook: Parliament to Enshrine Budget Law in Constitution

Spanish Prime Minister Jose Luis Rodriguez Zapatero secured opposition support yesterday to enshrine budget discipline in the constitution in a move welcomed by German Chancellor Angela Merkel.

ECONOMY: *The parliamentary leader of German Chancellor Angela Merkel’s party rejected demands that Greece provide collateral for emergency loans as splits emerged in her Cabinet, reflecting euro-area divisions on the issue. *Finland’s Prime Minister Jyrki Katainen said talks over collateral in the Greek bailout continue, Finnish business newspaper Kauppalehti reported on its website today.

EQUITIES: *Banco Mare Nostrum plans to ask Bank of Spain Governor Miguel Angel Fernandez Ordonez to extend its deadline for raising fresh capital, El Confidencial said, citing people close to the bank without naming them. *Banco Santander Brasil SA, this year’s worst performer in the MSCI Brazil Banks Index, said Chairman Fabio Barbosa will quit next month. *Indra Sistemas (IDR) was raised to hold from sell at UniCredit. *Morgan Stanley said its positive view on European telco services is even more valid in the face of a potential recession in Europe. *Distribuidora Internacional de Alimentacion SA (DIA) named Mariano Martin Mampaso as vice chairman of the board.

MARKETS: *The IBEX 35 Index slipped 0.2 percent to 8,279.8. *The spread between Spanish and German 10-year borrowing costs was little changed at 286.3 basis points.

To contact the reporter on this story: Manuel Baigorri in Madrid at mbaigorri@bloomberg.net

To contact the editor responsible for this story: Emma Ross-Thomas at erossthomas@bloomberg.net

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