Two very interesting articles about the problems which Spain is facing now, after our Dear Leader the Allianzator of Civilizations has been leading us
into disaster for 6 years now 🙄 . The first in English:
Spain’s debt to GDP ratio is expected to climb from 53.2 percent last year to 64.9 percent this year and 72.5 percent next year. But investors are particularly concerned about Spain’s gaping budget deficit, which at 11.3 percent of GDP is the third-largest in the euro zone, and which may exceed that of Greece this year, according to the European Commission.
In late May, the Spanish Parliament narrowly approved a €15 billion austerity plan to rein in the public deficit and ease fears of a Greek-style debt crisis. The measure, which is intended to reduce the deficit to 6 percent by 2011, includes cutting the pay of public sector employees by 5 percent and freezing that pay next year. The plan also calls for suspending automatic inflation-adjusted pensions and scrapping a payout parents get for the birth of new children.
Although these measures won Zapatero some respite from the markets, they also left his political future hanging in the balance. In the face of public strikes organized by Spain’s largest labor unions, as well as a more than 10-point decline in support for his Socialist Party, Zapatero put off other reforms. Now, with the crises in Ireland and Portugal, nervous investors are once again focusing on Spain’s public finances.
The second one is in Spanish (though translated partially):
The rescue and even “reestructuration” of the Spanish public debt will be inevitable if the Government continues not doing anything about it. According to the U.S. entity in its “forecast about euro zone growth” report issued on Tuesday, “Spain can still get by without external assistance” provided that no major negative surprises in the banking sector and whether it makes fiscal adjustment additional. And, at the end of 2011 the deficit will be 7.5% of GDP, well above the 6% target set by the Government, a target that, according to Citi, will be difficult to meet in 2012.
On the other hand, it also considers the distrust of markets to invest in Spain, measured by the difference between the interest of Spanish and German 10-year-bonds. The distrust will move on average at around 300 basis points during the first half of 2011, which is just the level at which it trades today, a new record since the introduction of the euro.
The experts of the organization are calling into question the “over-optimistic” of the executive and showing pessimism about the Spanish economy, as they believe that GDP will fall by 0.1% annual rate in 2011 (still in recession next year ) and unemployment will reach 20.4%. The agency also estimates that the Spanish GDP only rose 0.2% in 2012, six points less than previously expected, and although unemployment will fall, it will remain above 20%.
Of course, there are idiots who are proud of the deficits in public budgets and, meanwhile, our Dear Leader has gone to Lybia, Switzerland, Bolivia and Argentina. Of course, they are not going to pay the huge deficit with their own money. As it is public debt, we are ALL going to pay it. And some other Europeans.
But you know, I am anti-patriotic for not liking the present state of the economy. Or so, our Dear Leader liked to say when the crisis started and he (and his party and minions) repeatedly denied it.