Eurozone sovereign bailouts likely to stop at Portugal

Town Hall for the former Borough of Morecambe and Heysham, Marine Road East, Morecambe LA4 5AF
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Image by mrrobertwade (wadey)
Town Hall and municipal offices. Foundation stone laid 7th August 1931, official opening 7th June 1931. Designed by the Borough Engineer, P.W.Ladmore, with facade design by Alfred William Stephens Cross, MA, V-PIAAS, his son, Kenneth Mervyn Baskerville Cross, MA, FRIBA and C.Sutton.
Red-brown rustic brick in 1:3 English bond, Darley Dale stone details including portico, architraves and aprons to windows, quoins, parapet. White glazed bricks line the upper floor walls facing onto the council chamber clerestory windows and shallow pyramidal glazed roof with ventilator restored circa 1980. Steel framed structure, concrete flooring, internal walls of hollow fire clay blocks, flat roof originally covered with natural rock asphalt. Austral type metal window frames, some replaced.
C18 classical style, symetrical. 2 storeys over raised basement, 13 x 16 bay rectangular plan with grand entrance hall and central single-storey top-lit council chamber.
Single-storey Tuscan portico to the central 3 front bays: a flight of 6 wide steps; paired columns in antis; triglyph frieze; balustrade with urns. Paired pilasters flank central entrance doors, with semi-circular sockets for ceremonial halberds presented in 1905. The facade was surmounted by a tall flagstaff, temporarily removed due to water penetration at base of the supports.
Rear: plain fenestration, stone sills and brick flat arches, open well to bay 7 with steps down to basement, 4 cast iron moulded posts, handrail altered. Left return: right quoined bay with deep eaves and parapet as front; the remainder is slightly lower. Entrance bay 3: ten stone steps with cast iron and bronze handrails, panelled double doors, overlight with geometric tracery, moulded stone surround. Tall 3-pane windows as rear and square-section cast-iron down pipes, Lancashire rose on hoppers. Right return: similar to left, 9 steps to the entrance door bay 14, left handrail replaced.

Interior fittings survive throughout the building, including panelled doors, window frames with pivot opening or side casement mechanisms, radiators, light fittings. The ground floor layout and individual rooms include: panelled double doors open into a square lobby with original central pendant lamp, glazed screen to main staircase hall. The entrance hall has cream and light blue terrazzo flooring with central mosaic panel of the town shield and motto ‘BEAUTY SURROUNDS. HEALTH ABOUNDS’; wheelchair ramps obscure curved corner steps; square section columns with later decoration, cantilevered stone divided staircase: cast iron ballustrade with scrolled panels and ramped mahogany handrails; the stair well lit by 3 round-arched stained glass windows. Double doors to left and right open into the Council Chamber / magistrates’ courtroom: 4 corner columns carry a deep moulded beam which supports clerestory walling with roundels and square windows with original yellow and blue geometric patterned glass; walls: moulded ‘acoustic’ plaster wall panels , ceiling of square glazed panels and decorative bands in red, green, yellow and blue. Original glass cube pendant lights. Wall gas lights here and elsewhere in the building in the form of bronze plaques with relief decoration of laurel leaves supporting torches with white glass globes. A fixed oak partition, 3 glazed leaded glass panels [central door] divided by paired pilasters, screens the entrance to the chamber from the rear corridor and magistrates’ rooms. Furniture: original black oak desks, chairs with green hide upholstery, and tables, the latter straight or curved and in units designed to be moved to suit the number of members meeting. Carved motif of coat of arms on chair backs; the tall chairs and mayor’s / magistrate’s desk survive, with original lights and bells.
The outer rooms are reached from a corridor round three sides of the building which also links the two secondary staircases to rear left and right. The stairs are one straight flight with roll-moulded mahogany hand rails and bronze landing balustrades with scrolled decoration.
Interior, first floor, front: the mayor’s private room and anteroom has a built-in oak cupboard, the main front suite of rooms includes the mayor’s parlour and two committee rooms separated by folding panelled oak screens; the doors have pedimented surrounds, the panelled plaster ceiling has been removed to reveal steel joists and concrete infill. The left offices include the original open and well-lit drawing office. The right-hand corridor rooms include the original kitchen and general office.
Basement: reached from the rear stairs; includes steel doors to former cell or strong room and base of rear boiler house chimney .

Garage approximately 20m to north-east, brick, concrete pillars support flat lintels, parapet above. Single storey, 5 bays, originally open-sided but now with panelled doors and inserted windows far right.

The building of the new Town Hall was made possible by funding from the Unemployment Grants Committee and planning began in 1930. The work cost over £40,000 and the foundation stone was laid by the then Mayor Councillor J.S.Cordingley, J.P., on 12th August 1931. Heating was on the low pressure hot water system with a gas-fired boiler.
The design team for the facade was father and son, Alfred and Kenneth Cross, with C. Sutton. The RIBA records show that Kenneth Cross [d.1968] worked extensively for local authorities in London [including Westminster, Marylebone, Finsbury, Finchley and Inslington] and for Bournmouth and Newcastle-on-Tyne. He was an expert in the design of indoor swimming baths and wrote two books on public baths. He also designed for the Barbers’ Company, the Grocers’ Company, the Whitgift Foundation, St John’s College, Cambridge, Plymouth Commercial Bakery, and Barclays Bank.
Morecambe and Heysham Municipal buildings were illustrated in The Builder, August 19th 1932 and obituaries of Kenneth Cross, who was President of the RIBA, are in The Times, Building magazine 26th January 1968, p.98; and the RIBA Journal volume 75, 1968.

Listing NGR: SD4395164768

Source: English Heritage

Listed building text is © Crown Copyright.

Three of the heavily indebted ‘PIGS’ countries – Greece, Ireland and Portugal – have already received or requested bailouts from the European Union and International Monetary Fund, leaving only Spain holding on to solvency without external support.
The sequence of funding failures has triggered fears that Spain could suffer the same fate. Such an eventuality would pose a far greater threat for the Eurozone given that Spain’s economy is almost twice the size of those of Greece, Ireland and Portugal combined.
Spain’s gross external debt hit €1.76 billion at the end of 2010, according to the Bank of Spain. If the Eurozone solvency crisis is following a clear pattern – with investors focusing on one country at a time – Spain will come under greater scrutiny in the coming months.
“Spain’s size, and the distribution and complexity of its various types of sovereign, quasi-sovereign, bank and corporate debt, creates political headaches for the EU far greater than those in the smaller economies,” says Tamara Burnell, head of sovereign and financials credit analysis at M&G Investments.
But while pessimists point to problems in the country’s real estate and savings bank sectors, as well as unemployment in excess of 20%, the consensus view is that the bailouts will stop at Portugal.
“A disaster moment for Spain is not likely in the near term,” says Ashish Shah, senior vice-president of global credit at AllianceBernstein in New York. “Spain is in a much better position than Ireland, Portugal or Greece. But the country is clearly not out of the woods yet.”
Spain’s gross domestic product accounted for 11.56% of the Eurozone total in 2010, according to IMF figures, whereas Greece, Ireland and Portugal together accounted for just 6.06%.
“Growth, while weak, is improving and exports are okay, which will provide some offset to what will remain fairly low personal consumption in the short term,” says Duncan Sankey, senior portfolio director and head of credit research at Cheyne Capital in London.
But investors acknowledge the country faces major financial and economic challenges. Among these, the most significant are unemployment – 21.29% at the end of the first quarter, according to government figures – real estate debt and unhealthy bank balance sheets. All of these problems will continue to attract attention.
“There is no question the banking system is undercapitalised and the government is trying to address that,” says Shah. “The reality is the government is going to have to address it from the fiscal side, which means borrowing money and putting it in the banks. Spain will struggle to deliver the growth it needs to absorb the heavy social costs [of that process]. All this is happening as the European Central Bank is tightening rates, which is particularly bad for Spain because the mortgage market is largely a floating rate market.”
Nevertheless, investors take some comfort in the relative openness Spain has shown in publishing debt figures in its banking and real estate sectors.
“Spain will not go the way of Greece, Ireland or Portugal,” says Luke Spájic, head of European credit portfolio management at Pimco in London. “We know the debts are large but if the banks can be stabilised with equity and then fund themselves, it is very difficult to predict the Spanish banking system will disappear tomorrow. We know the size of the debt so what is the worst-case scenario when they go out to raise money? They might end up with an 80% debt-to-GDP ratio, which is a lot lower than the US.”
In terms of bond market sentiment, however, there are undoubtedly risks that buyers may end up staying away from upcoming Spanish issuance, even though that risk may not present itself for a few months.
“It will take some time for the risk to materialise in Spain because the government is very transparent about what it needs to do and is showing a tremendous amount of political will in that direction,” says Shah.
Nevertheless, the size of the Spanish economy relative to the other PIGS countries means it would be unwise to ignore the risk it poses to the Eurozone.
“At the moment you can still draw a distinction between Italy and Spain on the one hand and Greece, Ireland and Portugal on the other,” says Sankey. “Does that mean Spain is immune from contagion? Absolutely not, although they are looking somewhat better. The size of the problem is so much bigger in Spain that, if it had to be addressed, it might actually hush the voices of some of the less enthusiastic elements in the European Union.”
Yet for some investors, it is not just that worst-case scenarios are unlikely, or even that the EU will ensure they do not come to pass. Instead, Spain may even be worthy of increased allocations.
“There is a stock of people, be it Brits or Scandinavians or Germans, who will go and buy property in Spain,” says Spájic. “There is a massive stock of houses to get through.”
Spájic is also quick to emphasise the difference between the predicament Spain faces and that faced by Greece.
“The poorer peripheral countries have really tough debt dynamics,” he says. “When Greece has to go back to the private market next year, it will be a real struggle. Who is going to lend it €30-€40 billion? The public sector may step in again but then the risk builds it may not come back to market. With Spain you have got to paint a really nasty scenario for that to happen,” he says.
But if the macro picture were to turn negative again across Europe, Spain will not be the only country to come under pressure from investors, argues Burnell at M&G.
“Let’s not forget though that plenty of other large developed economies also share many of Spain’s problems, so there seems to be a reluctance to admit or confront the issues in Spain – after all, looking in the mirror can be painful for those who still believe themselves to be in a far better position. So a solution for Spain probably has to involve a much wider admission of pain than most can contemplate right now,” she says.

Find the full article on Risk.net. Cheyne Hedge Fund is a London-based alternative asset manager

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