Spain on Track to Meet Budget, an Official Says

The minister, Luis de Guindos, also said the government would not require additional one-time austerity measures as part of the 2014 budget that it will present this month. The budget will be based on an improved forecast for 2014, both in terms of overall growth and unemployment, which hit a record 27 percent earlier this year, Mr. de Guindos said.

After the financial crisis burst Spain’s construction bubble in 2008, “no doubt 2014 will be the first year when Spain will have some recovery,” the minister said.

Given the depth of Spain’s recession, the European Commission agreed in May to give Madrid more time to reach its budgetary targets. Mr. de Guindos said he expected Spain’s deficit to fall to the new target of 6.5 percent of gross domestic product — rather than the initial target of 4.5 percent — from 7 percent last year.

While Spain negotiated a banking bailout worth up to 100 billion euros ($133 billion), it ended up requesting only 41 billion euros to keep afloat institutions accounting for about 30 percent of its banking sector, including Bankia, a giant lender that Madrid nationalized in May 2012.

At the time of Bankia’s near collapse, the center-right government of Prime Minister Mariano Rajoy initially resisted any outside intervention in the banking sector. In hindsight, however, Mr. de Guindos described the bailout on Monday as “a model of what should happen” when a financial sector finds itself in such a precarious situation. “The bailout of the Spanish banks prevented a bailout of the whole of Spain,” he said.

Although officials from the International Monetary Fund and other creditors started another review of Spain’s banking progress on Monday, Mr. de Guindos suggested that “Spanish banks don’t have an important capital need,” implying that Spain would not require an extension of its bank bailout.

For banks that sought to raise capital, he added, “the capacity to access the markets is completely different to a year ago.” Last week, Banco Sabadell announced that it was raising up to 1.4 billion euros to bolster its balance sheet and meet regulatory demands.

Furthermore, the interest rate premium demanded by investors for buying Spanish bonds compared with Germany’s benchmark bonds fell this month below the comparable premium on Italian bonds for the first time since March of last year.

The Madrid government has forecast that Spain’s economy will grow 0.5 percent in 2014 after contracting by 1.3 percent this year. Mr. de Guindos would not say what the improved 2014 forecast would be. And while unemployment is expected to continue falling, he warned that Spain still faced significant challenges in terms of creating jobs and reviving consumer spending.

“We believe the economy of Spain is leaving behind the recession, but not by any means the crisis,” he said.

Mr. de Guindos was speaking after hundreds of thousands of pro-secession citizens of the northeastern region of Catalonia demanded last week that Catalonia be allowed to hold a referendum on independence. From the economic perspective, Mr. de Guindos said Monday that “a secessionist plan by a Spanish region is a lose-lose situation” for the region and for the country.

DealBook: Bribery Charges in China for Official Whose Child Worked for JPMorgan

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Greece on Track for More Aid, German Official Says

BERLIN — With Greece’s debt crisis an issue ahead of Germany’s election next month, the highest-ranking German in the European Central Bank said on Monday that Athens could be eligible for additional aid and debt relief next year if it continued to fulfill promises for its current assistance.

“The Eurogroup will support Greece for the lifetime of the current program, and beyond,” said Jörg Asmussen, a member of the central bank’s policy-making executive board, referring to the group of euro zone finance ministers.

Mr. Asmussen took care to note in an interview here that he was not signaling a new attitude toward Greece by its euro-zone benefactors. “There is no change of policy,” he said, explaining that euro-zone leaders already decided in November that they would re-examine Greece’s needs early in 2014.

But his comments fed into a debate set off last week when Mr. Asmussen’s former boss, Wolfgang Schäuble, the German finance minister, put Greece back on the public agenda, saying that more aid was certain, rather than merely very likely. Mr. Asmussen was a top aide to Mr. Schäuble before joining the European Central Bank in 2011.

Mr. Asmussen declined to comment on whether Mr. Schäuble had discussed his remarks ahead of time with Chancellor Angela Merkel. Her party, the Christian Democratic Union, has made what many Germans see as her deft management of the euro crisis a focus of her push for re-election.

Hermann Gröhe, general secretary of the party and a main architect of Ms. Merkel’s campaign, tried to suggest at a meeting with foreign reporters on Monday that the chancellor and her finance minister, who have a reasonably close if sometimes contrary partnership, had discussed the issue before Mr. Schäuble spoke out. Mr. Gröhe indicated that the purpose was to acknowledge that Greece might need more money, but to make clear that investors holding Greek debt would not be asked to take losses as a way to ease the burden carried by Athens.

“It was necessary to show a clear ‘No’ to a haircut,” Mr. Gröhe told reporters, referring to a partial write-off of Greek debt.

Political commentators have asserted that Mr. Schäuble, who is 70 and the longest-serving political stalwart in Ms. Merkel’s cabinet, acted on his own last week — partly to avoid exposing the party to accusations after the elections that it had somehow deceived voters about the need for more aid for Greece.

Polls show Ms. Merkel with high popularity ratings, and the Christian Democrats as likely to win most parliamentary seats. But Ms. Merkel and Mr. Gröhe are stressing that it will be a tight race.

Mr. Asmussen’s comments on Monday referred to a decision taken last November by the Eurogroup. The ministers agreed that Greece would be eligible for a fresh look at its needs as soon as it was able to finance current government spending, improve the economy and fulfill other promises to its lenders — the European Central Bank, the International Monetary Fund and the European Commission.

If “the debt is still considered to be too high, the Eurogroup will consider to take additional measures,” Mr. Asmussen said. “That is the point of time when we will look at the debt question again. This is already decided and made public in November last year.”

The monetary fund has estimated that Greece will have a financing shortage around 10.9 billion euros, or $14.6 billion, for 2014 and 2015. Greek Finance Ministry officials have suggested that the shortage will be smaller than the fund’s estimate, but they have been exploring ways to plug the gap. In an interview over the weekend with the Greek newspaper Proto Thema, Greece’s finance minister, Yannis Stournaras, cited a figure of 10 billion euros for the likely shortage.

Mr. Asmussen, who met in Athens last week with Prime Minister Antonis Samaras, said there were signs of stabilization in Greece, which has suffered from soaring unemployment and plummeting economic output. Referring to recent economic data, Mr. Asmussen said, “For the first time in years there were no negative surprises.”

Niki Kitsantonis contributed reporting from Athens.

DealBook: Bank of England Official to Leave

Neil Hall/ReutersPaul Tucker, deputy governor of the Bank of England.

LONDON – The Bank of England said Friday that Paul Tucker would resign as deputy governor. The announcement comes two weeks before Mark Carney takes over as the governor of the central bank.

Mr. Tucker, who has spent 33 years at the Bank of England, was also a candidate for the top job at the central bank. Mr. Tucker said that he planned to stay through the summer to help Mr. Carney, the former governor of the Bank of Canada, settle in to his new role.

“It has been an extraordinary honor to serve at the Bank of England over the past 30 years,” Mr. Tucker said in a statement. “I am very proud that, through the bank and the wider central banking community, I have been able to make a contribution to monetary and financial stability. I am looking forward to supporting Mark Carney as he arrives at the bank.”

Mr. Tucker had been a leading candidate to replace Mervyn A. King as governor of the Bank of England. But his chances dimmed after questions arose after an interest rate manipulation scandal erupted last summer.

British politicians accused Mr. Tucker and the central bank of failing to crack down on efforts by Barclays and other banks to manipulate the London interbank offered rate, or Libor, a benchmark for mortgages, corporate loans and other financial products worldwide. Mr. Tucker had to defend himself against assertions by former Barclays executives that the Bank of England had been aware of attempts to influence rates.

Mr. Tucker joined the Bank of England in 1980 after studying mathematics at Cambridge University. He became executive director for markets in 2002 and a member of the Bank of England’s rate setting committee. Earlier this year, he took a seat at the newly created Financial Policy Committee, which is part of Britain’s financial regulation system. At the central bank, he is known for improving communication with large financial organizations and keeping closer ties with chief risk officers.

“Paul has contributed immeasurably to a series of critical financial reforms, including policies to end too big to fail and to build more resilient derivative and funding markets,” said Mr. Carney, who is due to take the top job at the Bank of England on July 1. He added that he would like to continue a “close dialogue on how to build a more resilient financial system that more effectively serves the needs of the real economy.”

In a letter to Mr. Tucker published on the Bank of England’s Web site, George Osborne, the chancellor of the Exchequer, wrote that he was grateful to Mr. Tucker for his service and “a tremendous contribution to U.K. monetary and financial policy.”

“I have no doubt that you will continue to make a towering contribution to the international economic community,” Mr. Osborne wrote. “I hope that we stay in touch.”

It's Official: Phila. Off Tort Reform's 'Judicial Hellholes' List

After two years, the American Tort Reform Association, a conservative group that aims to change tort law, took Philadelphia off its "judicial hellholes list" and placed it on its "watch list."

Constitutional Claims of PHA Official Tossed by Third Circuit

Within 10 days of hearing arguments, a three-judge panel for the U.S. Court of Appeals for the Third Circuit has thrown out claims made by a former executive assistant at the Philadelphia Housing Authority that he had been retaliated against for constitutionally protected speech.

Constitutional Claims of PHA Official Tossed by Third Circuit

Within 10 days of hearing arguments, a three-judge panel for the U.S. Court of Appeals for the Third Circuit has thrown out claims made by a former executive assistant at the Philadelphia Housing Authority that he had been retaliated against for constitutionally protected speech.