Should Rajoy get a move on and get Spain out of the Euro?

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This topic contains 34 replies, has 12 voices, and was last updated by Profile photo of peterhun peterhun 5 years ago.

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  • #56434
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    I fear he may dither and try and conform to the next list of severe cuts proposed by Merkozy…

    It’ll be in vain, because as soon as Portugal, Greece, Italy etc. pull out and devalue their currency, Spain will have no choice but to follow suit, or see the tourist sector devastated by the cheaper alternatives provided by its neighbour countries.

  • #106900
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    Oh dear. Seems Rajoy wants Spain to be part of the hard-core Euro. Oh dear, this is really bad news for the economy (good news for buyers though).

    http://www.eleconomista.es/economia/noticias/3580907/12/11/Rajoy-quiere-a-Espana-dentro-del-nucleo-duro-del-euro.html

  • #106901
    Profile photo of Anonymous
    Anonymous
    Participant

    Spain is one of the most pro-EU countries in Europe. Being “European” means a lot to Spaniards: It gets them away from their haunted past. There is almost no debate here about whether to stay in the Eurozone or not. I can’t remember what level of public support the polls show for the Euro, but I bet you it’s high. It would be a rude shock if we left. Politicians will do what they can to keep us in.

  • #106902
    Profile photo of katy
    katy
    Spectator

    The average Spaniard knows little about the EU except that Spain prospered when they joined.

    The sales of newspapers is one of the lowest in Europe, as is internet usage.

    If they get as far as reading a newspaper there is never any informative or negative press about the EU.

    Spain embraces every stupid law that comes out of Europe and prides itself on being one of the first to implement them…at the same time totally ignoring them.

    Of course support is high they have been on the gravy train for 10+ years 🙄

  • #106904
    Profile photo of Anonymous
    Anonymous
    Participant

    Katy is rtight. An average Spaniard prefers to be ignorant or as I observed thay are quite comfortable in being oblivious . I feel this stems from Dictatorship & the economics. Most people did not have spare cash to buy books etc. Media was controlled.

    The sad part is when one ask them about their lack of intrest in events of any nature their reply always is that it does not affect or benefit them.

  • #106905
    Profile photo of GarySFBCN
    GarySFBCN
    Participant

    The average Spaniard knows little about the EU except that Spain prospered when they joined.

    The sales of newspapers is one of the lowest in Europe, as is internet usage.

    If they get as far as reading a newspaper there is never any informative or negative press about the EU.

    Really? I’ve read plenty in El Pais, Publico and other newspapers. And I’ve seen plenty of good reports on TVE.

    You are so bitter about Spain that you constantly spew gross generalizations – why don’t you leave? I’m sure that you and the Spaniards with whom you interact will be much happier.

    An average Spaniard prefers to be ignorant or as I observed thay are quite comfortable in being oblivious

    An ‘average Spaniard’ ? My my.

    @Mark: The highly educated Spaniards that I know are very informed about this and yes, they fully support the EU. It is the same for the people I know in the ‘agricultural class’ (my in-laws). In both cases, I think the concept of the EU appeals to their senses of the ‘collective good’, which is, sadly, a very foreign concept here in the US.

  • #106906
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    @mark wrote:

    Spain is one of the most pro-EU countries in Europe. Being “European” means a lot to Spaniards: It gets them away from their haunted past. There is almost no debate here about whether to stay in the Eurozone or not. I can’t remember what level of public support the polls show for the Euro, but I bet you it’s high. It would be a rude shock if we left. Politicians will do what they can to keep us in.

    It doesn’t really matter what people think (although you can be sure that quite a few are now changing their mind). Remember they voted for Rajoy to take whatever steps are needed to sort out the jobs and debt situation.

    If you think it’s inevitable that countries like Greece and Portugal leave the Euro-zone (and I think it is) then at a stroke Spain will lose millions of tourists as they will be 20-30% cheaper through devaluation. Normally Spain could fight against this, but at the heart of this crisis??? Can Spain cope with another million or two losing their job?

    Rajoy can either choose to do it now (and have the advantage of being the instigator), or be forced into it a couple of months later, and further disaster for the economy.

    Believe it or not I’d like to see Spain stay in the Euro, but not at the cost of all these unemployed. Keeping German car companies profitable is not worth all this pain. Enough is enough.

  • #106907
    Profile photo of katy
    katy
    Spectator

    If Spain stays in the euro there will be another million unemployed and Rajoy will be a minion. The Spanish generally are apathetic.

    Gary…I have left Spain. I do know what I am talking about when I say there is no debate in the Spanish news compared with even Germany. Please keep up, I do have Spanish relatives too. Please look at stats……the average Spaniard is uninformed they are one of the LOWEST newspaper readers and internet users. Not bitter, stating facts….why are you so touchy 😕

    They may be “pro-European” but they sure do a lot of posting on forums about kicking out the immigrants!!

  • #106908
    Profile photo of Chopera
    Chopera
    Participant

    Rajoy will use the euro situation as an opportunity to reform labour laws and reduce the size of the Spanish state. What he says about Spain’s involvement in the EU and any core eurozone is irrelevant since, like everyone else, he hasn’t got a clue what the eurozone will look like by the time he has a chance to do anything.

  • #106910
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    Please look at stats……the average Spaniard is uninformed they are one of the LOWEST newspaper readers and internet users.

    Stats can often be twisted to prove what you’re after. I’ve noticed for example, that it’s far more common in Spanish cities to have daily newspapers available in cafe-bars than in their British equivalent.
    Incidentally it is NOT true that the Spanish are one of the LOWEST internet users (see following link). In European terms they are currently 5th in terms of hours spent on the net, ahead of countries like Sweden, Belgium, Poland and Switzerland. Britain incidentally is top, but I don’t think it indicates being better informed either. Surely people spend most of their time on Facebook (or Tuenti), not the Guardian or El Pais sites? Indeed the article makes a point that time spent on the internet doesn’t always show the relative number of pages visited – again does this matter, if it’s all on Facebook?
    http://www.ojointernet.com/noticias/consumo-internet-espan/

  • #106912
    Profile photo of Chopera
    Chopera
    Participant

    Generally the Spanish public have not been presented with any arguments for why the euro was a bad idea. Furthermore the euro-sceptics were presented as being some kind of nationalistic lunatic fringe. This is not surprising since all the Spanish media chanels are incredibly biased one way or the other, and since all main Spanish political parties were pro-euro none of the media chanels had a reason to go “off message”.

    From my various contacts with the Spanish education system, the Spanish have traditionally been educated the “old fashioned” way. That is pupils were presented with various bits of information and told to go away and learn it and then be examined as to how well they remembered it. There was very little discussion or debate and education was a one way flow from teacher to pupil. I know quite a few Spaniards who went to study in the UK and were surprised to be asked questions that had no straight answer, and which challenged them to creatively come up with their own ideas, present them, debate them and, if necessary, change them. This is gradually changing in Spain, but I think this lack of questioning of what you are being told still pervades through Spanish society and may be an underlying reason why there has been so little debate on the euro.

  • #106913
    Profile photo of angie
    angie
    Spectator

    I don’t know what financial contribution Spain makes to the Eurozone compared to what it receives so if anyone knows this it would be interesting 🙄

    However, IMO, Spain has benefitted enormously with infrastructure improvements, you only have to look at it’s super new roads, we drove on these to avoid Madrid when driving from France to Malaga and they were superb. Not only smooth and without potholes (brand new), but virtually traffic free, an anomaly really, the best roads but without traffic! Apparently the UK has contributed loads of money to Spanish roads through it’s payments to the Eurozone, but the UK’s roads are now some of the worst in Europe. It’s only in towns like Ubeda that the roads were poor.

    So, I would expect Spain not to want to leave the gravy or gaspacho train, mind you if it did, it could devalue, and possibly revamp their tourist and property industries 😆

  • #106915
    Profile photo of Chopera
    Chopera
    Participant

    @angie wrote:

    I don’t know what financial contribution Spain makes to the Eurozone compared to what it receives so if anyone knows this it would be interesting 🙄

    However, IMO, Spain has benefitted enormously with infrastructure improvements, you only have to look at it’s super new roads, we drove on these to avoid Madrid when driving from France to Malaga and they were superb. Not only smooth and without potholes (brand new), but virtually traffic free, an anomaly really, the best roads but without traffic! Apparently the UK has contributed loads of money to Spanish roads through it’s payments to the Eurozone, but the UK’s roads are now some of the worst in Europe. It’s only in towns like Ubeda that the roads were poor.

    So, I would expect Spain not to want to leave the gravy or gaspacho train, mind you if it did, it could devalue, and possibly revamp their tourist and property industries 😆

    The old motorway roads out of Madrid are still pretty poor, but they have built new toll motorways to provide new alternatives to escape the city. It sounds like you might have taken the M50 which is part of a new road scheme to allow people to cross Spain without having to deal with Madrid.

    Generally the problem is that you have cases where for example Spain receives money from the EU to improve its roads “because it hasn’t got the money” while at the same time Spain somehow has the money to build the best metro system in Europe for Madrid (the metro stations and trains in Madrid even have TV screens feeding you council propaganda). As with any system based around some central government handing out money for certain causes, the causes for which people receive money never get resolved.

  • #106916
    Profile photo of katy
    katy
    Spectator

    Spain receives more money than it pays to the EU. It has also had money for projects that have never been started. There are roads leading nowhere whilst many small villages are lacking even the most basic infrastructure. EU money has helped to cover Almería in a sea of plastic.

    Spaniards may start to see the downside of the European dream when IVA rises to 23%. They blamed Zapatero but Rajoy will have his hands tied.

  • #106918
    Profile photo of Anonymous
    Anonymous
    Participant

    The ‘old-English’ belief that Spain is somehow inferior to the UK dates back for so long, and is so wrong. Of course you can find illiteracy in some backward Andalucian villages where some expats chose to flaunt their wealth, but to use their knowledge of those places to talk about Spain in general is ridiculous.

    If you compare Madrid to London you will find that it’s no different, and no different to Rome or Paris.

    Rajoy is a Conservative, but the PP is vastly different to the Tories in one respect, especially; they are pro-European and forward-looking instead of trying to preserve the thoughts of Empire in a world that has moved on.

    I don’t know what will be decided on the Ninth, but Rajoy will not be going against the Spanish wishes to stay in the EU and the Eurozone.

  • #106923
    Profile photo of katy
    katy
    Spectator

    The only time Spain would leave the EU is if they were to be kicked out. They are still on the gravy train, traditional spongers. Like asking someone to sign off benefits.

  • #106926
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    Anonymous
    Participant

    If you substituted the UK for Spain, you might be right. There are no benefits in Spain, and if you’ve lived here for more than a week or so, then surely you would know that.

  • #106927
    Profile photo of katy
    katy
    Spectator

    You have missed the point!

  • #106931
    Profile photo of Anonymous
    Anonymous
    Participant

    I think we both did.

  • #106944
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    Anonymous
    Participant
  • #106952
    Profile photo of Inez
    Inez
    Participant

    Interesting article. Some friends of mine are concerned Germany will bail out this week forcing the 3rd situation and the Spanish banks to limit withdrawals. He has already taken his money out of Santander!! Who knows?

  • #106961
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    Anonymous
    Participant

    What an interesting article about the Europeseta. Since it is aimed at the Spanish population, it doesn’t consider the plight, or otherwise, of the expats living in Spain. I don’t even think there is an ‘otherwise’, just an inevitable degree of pain.

    However, considering the overwhelming enthusiasm from the Spanish people to stay in the Eurozone (which I find hard to understand), it seems unlikely that that I will be asked to pay for my coffee in Europesetas just yet.

    As for the value of my property in Spain? It’s just as well that I intend to stay, I doubt if I could sell it at any price, in any currency, possibly apart from the Rouble.

  • #106965
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    Anonymous
    Participant

    @mark wrote:

    The incredible return of the peseta

    What about this:

    “It is June 2012. The Spanish public sectors and private sector workers have taken a 50% cut on their salaries and 30% of the private companies went bankrupt.
    The Euro is all-well and Merkel-Sarkozy are happy, and the Spanish, Greeks, Italians and Portuguese are now very competitive as the labour/productivity costs are now similar to Germany.

    Coffee is still 1.50 Euros but only Germans, French and Brits can afford to drink it. Spaniards only drink and eat at home as their salaries are barely enough to pay for heating and mortgages.”

  • #106969
    Profile photo of Chopera
    Chopera
    Participant

    @mark wrote:

    The incredible return of the peseta

    The article contains quite a few assumptions – especially that if a country leaves the euro their debts will remain in euros. When countries adopted the euro they were allowed to move their debts from their old currency to euros so there’s no reason to think the reverse wouldn’t be true.

    However it paints a possible picture of a disorderly break-up of the eurozone – especially the bank runs, and highlights why that situation must be avoided at all costs. Either they agree to a complete fiscal union or they split the eurozone in two overnight, with capital flow controls to avoid bank runs (this can be done apparently). If they keep putting the decision off the more likely countries will be forced out of the eurozone in a disorderly manner as their debt burdens become unpayable.

  • #106983
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    @chopera wrote:

    @mark wrote:
    The incredible return of the peseta

    The article contains quite a few assumptions – especially that if a country leaves the euro their debts will remain in euros. When countries adopted the euro they were allowed to move their debts from their old currency to euros so there’s no reason to think the reverse wouldn’t be true.

    It also assumes the country would revert to using “pesetas”. It wouldn’t, although there’s a chance they could call the new currency peseta-nueva or whatever. One of the reasons is there are still millions of hoarded old pelas up and down the country, and the govt wouldn’t want the hassle of recognising those (they wouldn’t as they’d no longer be legal tender). also as the article actually points out coffee (and other things) would be seen as so much more expensive. No, it’d be a new currency, perhaps called the Spanish libra ( 😉 ) at 90% or 85% against the Euro. Much easier to confuse folk when converting currencies.

  • #106987
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    Anonymous
    Participant

    The sad truth is that Spanish do not trust their Politicians, any one in power or the system. Hence it is for this reason that you find them not respecting rules, regulations etc. Further their indifference towards corruption and the one who gets away with it.

    Lot of them have lived & worked in other Countries mainly in Northern European Countries & have experienced that things work as far as day to day life goes.

  • #107004
    Profile photo of peterhun
    peterhun
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    @chopera wrote:

    The article contains quite a few assumptions – especially that if a country leaves the euro their debts will remain in euros. When countries adopted the euro they were allowed to move their debts from their old currency to euros so there’s no reason to think the reverse wouldn’t be true.

    Its depends in which countries laws the debt were taken out. Many are under UK law, so would stay in Euros.

  • #107018
    Profile photo of peterhun
    peterhun
    Participant

    The Dutch bank ING has had another go at the numbers, calculating that the Greek Drachma would fall by 80pc against the D-Mark in a full-blown disintegration.

    The Escudo and the Peseta would fall by 50pc, and the Lira and the Punt by 25pc. Germany would suffer a “deflationary shock”.

    The whole eurozone would crash into depression, with a GDP contraction of around 9pc in 2012 — Germany (-7.4), France (-9.1), Portugal (-12.7), Greece (-13.1).

    Outside: UK (-5), Poland (-6.6), US (-0.2), Japan (-1.1). The price of oil would drop to $55 a barrel. The US would flirt with deflation.

    The contraction would continue into 2013, before gradually stabilizing.

    “Events of the past year have proved beyond doubt that the Eurozone is far from a textbook `optimal currency area’. But this is an omelette that cannot readily be unscrambled ,” said ING’s Mark Cliffe.

    .
    .

    Be that as it may, ING’s Mr Cliffe does not agree with those who think the D-Mark will soar against the dollar after a break-up, mimicking the Swiss franc. It will be sucked down by depression and mayhem.

    Nor would the euro rally after spinning Greece back into the Aegean. The residual core currency would plunge below dollar parity, and perhaps below $0.85. “The notion of irreversibility of EMU would be shattered forever,” he said.

    http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100013721/better-a-horrible-end-for-euroland-or-endless-horror/

  • #107029
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    My opinion on all this may be as flawed as anyone’s else. I just hope Rajoy and Spain have a contingency plan, in case the Euro does fall apart.

  • #107031
    Profile photo of Chopera
    Chopera
    Participant

    @peterhun wrote:

    @chopera wrote:

    The article contains quite a few assumptions – especially that if a country leaves the euro their debts will remain in euros. When countries adopted the euro they were allowed to move their debts from their old currency to euros so there’s no reason to think the reverse wouldn’t be true.

    Its depends in which countries laws the debt were taken out. Many are under UK law, so would stay in Euros.

    If countries like Spain can’t revert to their old currency without changing the denomination of their bonds then there’s no issue here. There’s no threat of such a country leaving the euro because it would be suicide.

  • #107037
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    Anonymous
    Participant

    @peterhun wrote:

    @chopera wrote:

    The article contains quite a few assumptions – especially that if a country leaves the euro their debts will remain in euros. When countries adopted the euro they were allowed to move their debts from their old currency to euros so there’s no reason to think the reverse wouldn’t be true.

    Its depends in which countries laws the debt were taken out. Many are under UK law, so would stay in Euros.

    When the shit hits the fan none of that stuff matters. Just look at Iceland they changed their loans by force into their own currency and the same could be done in Spain.

  • #107045
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    peterhun
    Participant

    @Ardun wrote:

    When the shit hits the fan none of that stuff matters. Just look at Iceland they changed their loans by force into their own currency and the same could be done in Spain.

    Not true, external debts are still in Euro’s and the government uses capital controls to seize hard currency to pay the interest. They refused to support the banks debts and foreign bond holders lost most of their bonds but they did enforce a conversion of debt into local currency.

  • #107050
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    Sr Rajoy really better have a contingency plan that allows Spain to ease out of the Euro. Even if it’s unwanted, better to have a fall-back position (notes ready for circulation, computer systems primed for changeover at atms etc) than to be caught totally unawares…

    http://www.bloomberg.com/news/2011-12-09/wary-european-ceos-move-cash-to-germany-to-protect-against-breakup-risk.html

    Grupo Gowex (GOW), a Spanish provider of Wi-Fi wireless services, is moving funds to Germany because it expects Spain to exit the euro. German machinery maker GEA Group AG is setting maximum amounts held at any one bank.

    “I don’t trust Spain will remain in the euro zone,” said Jenaro Garcia, founder and chief executive officer of Madrid- based Grupo Gowex, which provides Wi-Fi access in 15 countries. “We moved our cash and deposits to Germany because Spain will come back to the peseta.”

  • #107055
    Profile photo of GarySFBCN
    GarySFBCN
    Participant

    After reading this article, yes, I believe that Spain should abandon the euro.

    http://blogs.publico.es/dominiopublico/4358/el-bce-el-lobby-de-la-banca/

    According to Mr. Navarro, much of the debt crisis is created by the ECB. When countries controlled their currency, they managed their debt, printed money and maintained low interest on their debt.

    But now countries have lost this type of control and they are prohibited from borrowing from the ECB, and while private banks can borrow from the ECB, with the low rate of 1.25%, countries must borrow from private banks at interest rates hitting 7%.

    And then there’s this:

    Los bancos se forran a costa del endeudamiento de los estados. Un círculo virtuoso para la banca. Pero la situación es incluso peor que la ya descrita, pues el BCE, al romper con el espíritu del famoso artículo 123, comprando deuda pública a estados como España e Italia, ha puesto como condición que los salarios y la protección social disminuyan, acentuando la necesidad de privatizar el Estado del bienestar, tanto sus transferencias públicas como las pensiones, así como los servicios públicos como la sanidad.

    Other than the pursuit of an ideal, why is lowering wages and privatizing government functions part of this deal?

  • #107056
    Profile photo of peterhun
    peterhun
    Participant

    According to Mr. Navarro, much of the debt crisis is created by the ECB. When countries controlled their currency, they managed their debt, printed money and maintained low interest on their debt.

    But now countries have lost this type of control and they are prohibited from borrowing from the ECB, and while private banks can borrow from the ECB, with the low rate of 1.25%, countries must borrow from private banks at interest rates hitting 7%.

    That is the crux of the matter. However the euro politicians decide to ignore that and apply ‘rules’ that nobody, including Germany stuck to. They now intend to have some more unenforceable rules to prevent a future crisis while ignoring the current crisis completely.

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