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Spanish bond sale reaps rich rewards

Spain's economy received a much-needed shot in the arm on Thursday with the government raking in €5.03 billion ($6.6 billion) via the sale of medium- and long-term bonds at lower interest rates than expected.

Spanish bond sale reaps rich rewards
Spain's economic ministry is upbeat about the result of Thursday's bond sale.

In what is the latest sign of improved investor sentiment regarding the country's ability to manage its finances, the Treasury managed to offload €2.435 billion worth of 10-year bonds at an average yield of 4.957 percent, down from 5.222 percent at the last similar auction on February 21.

It was the first time that the yield on Spanish 10-year bonds have fallen below five percent since November 2010, the economy ministry noted in a statement.

Spain's borrowing costs have fallen since the European Central Bank announced back in September it was ready to buy an unlimited sum of bonds to curb borrowing costs for troubled member states that accept strict conditions.

The risk premium — the extra rate demanded by investors in Spanish 10-year bonds over the rate offered by equivalent German bonds — stood at 348 basis points, down from 355 basis points when markers closed on Wednesday.

Investor confidence in eurozone nations declined after a general election in Italy last month ended in political deadlock, with the majority of voters backing anti-austerity platforms of former prime minister Silvio Berlusconi and comedian Beppe Grillo.

But an agreement reached by European finance ministers on Tuesday to give Ireland and Portugal more time to repay emergency bailout loans has improved sentiment for all heavily indebted nations that use the euro, including Spain.

The Treasury sold €2.026 billion in five-year bonds at an average yield of 3.612 percent, down from 4.169 percent during the last comparable auction on February 7th.

It also raised €568.9 million in three-year bonds at an average yield of 2.68 percent, down from 2.77 percent on January 17th.

The Treasury had expected to raise € 4.0–5.0 billion via the bond auctions, but demand ended up outstripping supply by 2.6 to one.

The Treasury has already taken in €35.5 billion, or 29.3 percent of the total amount it has planned to raise through medium and long-term bond auctions this year, the economy ministry statement said.

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IMMIGRATION

‘I’d do it again’: Refugees reflect on their journey to Germany five years on

German Gracia Schuette and Syrian Aeham Ahmad both had their lives changed forever by Angela Merkel's decision in 2015 to leave Germany's doors open to hundreds of thousands of refugees.

'I'd do it again': Refugees reflect on their journey to Germany five years on
Syrian pianist Aeham Ahmad while still living in a hostel in 2016. Photo: Daniel Roland/AFP
In August of that year, Schuette joined thousands of volunteers serving ladles of hot soup to exhausted migrant families arriving at Munich's main train station.
   
Having been held in Hungary after travelling the length of Europe, trains overflowing with refugees from Syria, Iraq and Afghanistan had begun arriving at the station in a seemingly endless convoy.
   
Ahmad was a passenger on one of them. The Syrian pianist with Palestinian roots arrived in Munich on September 23.
   
A month earlier, he had left Yarmouk, a sprawling neighbourhood in the south of Damascus, after swathes of the area were occupied by the Islamic State (IS) jihadist group.
   
He left behind his wife and two boys, still too young to embark on such a perilous journey.
   
Now 32, Ahmad has built a career for himself that involves travelling all over Europe and as far afield as Japan to give concerts.
   
At the station in Munich, where the volunteers once served hot soup, a Covid-19 test centre now stands.
 
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Gracia Schuette stands at the main train station in Munich, the arrival place of many refugees in 2015. Photo: Christof Stache/AFP
 
'Gratitude'
 
Schuette, 36, says the experience changed her attitude to life and taught her “gratitude and the awareness that despite everything that happens in Germany, it is still a very safe country”.
   
Ahmad speaks to AFP from a train heading to the north of Germany, where he is due to give a concert.
   
He remembers his first days in Germany as a time of great confusion. Like tens of thousands of other Syrians arriving in the country, he had only one word on his lips: “Alemania!” — Germany.
   
“After I arrived in Munich, I was sent to several emergency reception centres and then to Wiesbaden” near Frankfurt, where he and his uncle were given a room in a hostel, he says in a mixture of English and German.
   
He remembers the “extreme kindness” shown by volunteers like Schuette — “that community of people who said, 'We have to help'”.
   
For Schuette, it was important to feel that she was “not just a spectator” watching events unfold but willing to “act decisively” by helping to distribute basic necessities or set up camp beds.
   
Today, she works as an administrator for a kindergarten. But she has maintained her commitment to helping refugees — so much so that she has even taken three young people into her home, one of whom still lives with her.
   
Having been granted refugee status a year after his arrival in Germany, Ahmad was joined by his wife and children.
   
The family have since moved to Warburg, a town in northwestern Germany, and seven months ago welcomed a new baby girl.
   
While still in Syria, Ahmad had made a name for himself on social media with videos of songs performed amid the ruins of his ravaged home country.
 
 
'No accent'
 
In Germany, he began to sing songs about homesickness, with the aim of raising awareness in his new country and the rest of Europe of “this stupid war” that has devastated Syria for more than nine years.
   
Today, he aspires to “bring cultures together, to create a dialogue between Eastern and Western music”.
   
Having given more than 720 concerts, he has at times felt exhausted. But “anything is better than living off state subsidies” as he did during his first months in Germany, he believes.
   
If Schuette could go back and do it all again, she would.
   
“I don't think I would be someone who just says, 'It's going to work out and everything's going to be great.' You have to be realistic,” she said, pointing to the difficulties of integration. “But there's no doubt about it: I'd do it again.”
   
Ahmad, too, avoids painting a rose-tinted picture of his story. His generation, he says, will be scarred for life by the horrors of war and the  difficulties of adapting to life in exile.
   
But there is pride in his voice as he reveals that his two sons already speak German “without the slightest accent”.
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