Thus the Spanish government is, like other European governments, running a large stimulus programme. The problem is, however, this money is not being spent on supporting what would otherwise be a very painful structural correction. Rather it is being essentially wasted by trying to drive straight on ahead in the hope that no such correction will be needed. This is setting off alarm signals everywhere, and is what forms the background to the pressure on the Spanish government to begin to put in place plans to structurally reduce the deficit.

“The ECB will have to normalize rates from next year and it will hurt countries like Spain and Ireland which will still be in recession and burdened by piles of debt,” said Gilles Moec, an economist at Deutsche Bank in London. He forecasts the ECB will double its benchmark interest rate, currently at a record low of 1 percent, by the end of 2010.

Iniciado por juancarlosb

A propósito del artículo que comentamos el otro día en el foro del WSJ, le he trasladado mi discrepancia con el autor sobre la posibilidad de que España decida abandonar el euro.
A esto me contesta:



Es decir, que Edward opina que somos una especie de rehenes de Europa, y que de aquí no nos vamos ni por las buenas ni por las malas hasta que no paguemos el último céntimo.

Remarcar que a este escenario es al que tengo que dedicar el último post que me falta en el hilo de mis previsiones.
Yo lo llamo el "escenario pesadilla". Si se cumpliera esto que dice Edward entonces sí que nos podemos preparar. A mí por mi parte ya me ha dejado preocupado, ya que yo no lo consideraba un escenario muy probable (70/30).
Continuará, en el otro hilo.

Iniciado por juancarlosb

A propósito del artículo que comentamos el otro día en el foro del WSJ, le he trasladado mi discrepancia con el autor sobre la posibilidad de que España decida abandonar el euro.
A esto me contesta:



Es decir, que Edward opina que somos una especie de rehenes de Europa, y que de aquí no nos vamos ni por las buenas ni por las malas hasta que no paguemos el último céntimo.

Remarcar que a este escenario es al que tengo que dedicar el último post que me falta en el hilo de mis previsiones.
Yo lo llamo el "escenario pesadilla". Si se cumpliera esto que dice Edward entonces sí que nos podemos preparar. A mí por mi parte ya me ha dejado preocupado, ya que yo no lo consideraba un escenario muy probable (70/30).
Continuará, en el otro hilo.

Iniciado por Eddy

Vengence, they say in Spain, is a dish which is best served cold.

...

Iniciado por Eddy

Spanish Department Of Political Dirty Tricks Calling - Bring Me The Head Of Diego Garcia!

Vengence, they say in Spain, is a dish which is best served cold. Looking at the pace with which things are now moving here, maybe the waiters are getting themselves ready.

According to Bloomberg the Spanish Dept Agency now has a new head - Gonzalo Garcia - who previously lead the Spanish Treasury’s financial analysis department. Garcia is 35 years old, and already has ten years experience working for the Spanish Treasury in the head that is sitting on those ever so young shoulders, while the person he will replace - Enrique Ezquerra - himself only 37, now becomes economic adviser with Spain’s Permanent Representation to the European Union based in Brussels. Something, it seems to me, is afoot, and it isn’t that hard to work out what. With Spain’s banks having something like 75 billion euros in short term loans which need to be renewed with the ECB in Frankfurt next June (see this post for a full explanation of the background to all this), and the Spanish government having a similar (or before we get to the end of the year possibly somewhat greater) quantity of debt outsanding in one year bonds which will need to be renewed next year along with all the extra debt they will also need to finance next year, and with a domestic banking system which is already struggling to refinance existing household and domestic loans, it isn’t hard to see that the position of Head of the Spanish Debt Department and direct coordination with Brussels are two of the key items on next years Spanish government agenda.

And the only issue left in my mind is whether the head which will need to be served up on the proverbial plate as the ritual offering to ensure the free flow of communication (and money) will not be
none other than that of the existing President of the Spanish government, José Luis Rodriguez Zapatero.

Certainly all the early warning signs are there, and no one can watch Spanish television news, or listen to the radio here without becoming immediately aware that something has now changed, and that he who was once all powerful is now, himself, in his turn steadily being subjected to that big squeeze of which he was, in an earlier epoch, such an admirable exponent himself. Basically I have no doubt that, whether the coup de grace comes later or sooner, Zapatero is now on his way out, and the only real outstanding question I have is whether he will in the end go before xmas (the start of Spain’s EU Presidency) or after June (when it finishes). The decision is I suppose in the hands of the Spanish people, and it is just a question of how much more unemployment they are willing to stomach before those inevitable “casserolades” start to break out.

Interestingly, for those us who follow this kind of thing, one of the obvious candidates, if not to replace him, then at least to take a key role in the new government of economic technocrats which is undoubtedly being prepared even as I write - ex Public Administration Minister Jordi Sevilla - recently left his seat in the Spanish Parliament - in an ominous and deeply significant leaving of the sinking ship with two other ex-ministers Pedro Solbes and ex-Defence Minister José Bono - to go and work for Price Waterhouse Coopers. And irony of all ironies, he had earlier been replaced in the Public Administration Ministry by the unfortunate Elena Salgado, who may well be about to see her short term in the Economics Ministry abruptly brought to an end. But Sevilla’s latest move becomes even more charged with symbolic significance when you consider that the role model for what may now be about to befall Zapatero, Ferenc Gyurcsany, was replaced by the current Hungarian Prime Minister Gordon Bajnai, who immediately called the now Finance Minister Péter Oszkó away from his labours at Deloitte. And Gyurcsany in what could be an early anticipation of what Zapatero may now need to do, resigned while muttering “I am leaving as I am being told I am the biggest obstacle to the structural economic reforms my country is said to so badly need”. Who exactly it was that was telling him this it may be judicious not to ask, but one thing is obvious, you can’t have people always coming from the same consultancy group, now can you? It just wouldn’t look right.