Re: Re: Zapatero denies rumour that Spain is next Greece


I saw the interview Zapatero gave protesting Spain did not need a bail out. He seemed almost manic in his denials. Like a man who knows the truth but cannot accept it himself. It brought to mind something similar from Greek and German politicos 6 months ago. πŸ™‚
I think the markets have decided Spain is hiding the true state of their economy. I have thought that for some time. The worst offenders being the banks.
Spain’s contribution to the Greek bailout will just make things worse. Spain and Portugal will contribute €10bn between them. The new €17bn infrastructure project, recently announced by Zapatero and designed to create employment may well tip Spain over the edge.
The austerity Greeks are going to have to endure is truly grim but it’s the only medicine that will work to turn their economy round. Spain and UK needs something similar but in their consumer dominated societies the Spanish in particular are unlikely to accept it.
This last paragraph from Mark’s posted link sums it up well:-

β€œWhen politics intervenes in the banking sector, obviously you get a clash,” said Jamie Dannhauser, who covers Spain for Lombard Street Research in London. β€œI don’t think that the recognition process of bad loans has really got going at all.”

How true πŸ™