Spain would have been better off outside the Euro-Zone and it’s not too late to leave, argues an expert
If Spain had kept the Peseta the bubble would never have been so big, claims Max Otte, an economics professor and fund manager who forecast the crisis in a book published in 2006.
Otte explains that low interest rates that came with Euro-zone membership are the root of the problem. Egged on by the banks, Spaniards binged on cheap mortgage credit and drove the property market into a frenzy, making a traumatic bust inevitable.
Given where we are now, Spain would have been better off with higher interest rates and steady growth outside the Euro-zone, argues Otte in comments reported in the Spanish press. The boom years were no worth this bust.
He also claims it’s only a matter of time before Greece abandons the Euro, and recommends that Spain does so too. The Euro has been a waste of time and money, says Otte.