Not looking good

Post reply   Start new thread
:: New - Old :: Old - New

Pages: 1 |

Forum home :: Latest threads :: Search forums
The Comments
24 Jul 2012 03:02 by ojosazul88 Star rating. 171 posts Send private message

 In Spanish press , could the Euro days be numbered in Spain?


The Government throws the towel: "It is a matter of days, or help us or we sink"
As of today, the Government of Mariano Rajoy faces one of the most critical weeks of his mandate. After closing last week with the premium risk above 600 basis points and that trip to 640 in the early hours of today with the announcement of two autonomous, both of the PP - Valencia and Murcia - communities, of the ransom because have no liquidity to pay its employees payroll, and with the street on the edge of boilingWhat happens today can be definitive.
"What is happening to Spain it is not only the evidence of the failure of our policies as a country during all those years ago, it is also evidence of the failure of the European project, the incompetence of their leaders and the futility of their decisions," say sources very close to the own Mariano Rajoy. And is that the Government has no room for manoeuvre to make nothing more and depends solely from decisions taken in Brussels.
"Or help us or we sink us and Europe sinks, and is a matter of days, here cannot be with this maddening slowness with which normally Act Brussels", say in the Ministry of economy. Act means the ECB, as he comes claiming since last week by the entire Government, breaking with its traditional secrecy and either buy debt or at least make some effective gesture that leads to thinking the markets that you going to do in the short term.
But pessimism has been installed at the heart of the Spain Government to the point that Executive Rajoy already handles three possible scenarios that may occur in the next few days or weeks:
The first, the bailout. The Government believes that it is the less likely because a quantity would be an injection of capital in the more than 500 billion euro, Spanish coffers "exorbitant, hardly suscribible by the whole of the EU", inter alia by would imply that the next tab to break down would be Italy, which would imply one much higher amount - 700,000 million euros. In any case, "involves the recognition of a failure which, in addition, would inevitably lead to the end of the euro because the Nordic countries press for their break-up", indicate sources Executive. However, the Government already does not deny outright the possibility of rescue as it had been doing so far.
The second, the dreaded default, suspension of payments. It would be a way of pressing the ECB and the Nordic countries, primarily to Germany as main creditor of Spain, but at the same time "a tremendously negative image of our country, he moved and picturing the risk to unacceptable levels premium - although it is already-, and unless the EU acted fast us library nor the rescue", say these sources. However, is the option that the Government shuffle at this time as more plausible, inter alia because if any immediate decision is taken in the EU, the lack of liquidity will put at risk the payment of payroll staff and the interest on the debt "not later than August or September", added.
Third, the exit from the Euro.  The Government does not rule out anything, and this possibility also is on the table. "We would again own currency and we act on our competitiveness indexes." It is true that at first it would have disastrous consequences, but return us autonomy to make our policies and get out of the crisis ahead of schedule. "That Yes, our creditors can longer go is forgetting to charge until our economy starts to recover", conclude these sources.
In any case, the Government seems resigned to make one of these three scenarios which is imposed in the next few days, although "from our point of view, the only truly effective way to this situation is that it was agreed at the last Summit, i.e. to build more Europe, go to Fiscal Union and the Union Bank." "But we can not afford the luxury of waiting months, it must be already, or at least to take significant steps in this direction," stated in the Executive of Rajoy.
Hence the call to Mario Monti that meet with Rajoy on 2 August in Madrid. And hence the discussions by telephone the President of the Government, is since the last Summit, quite often with French President François Hollande. Against the Norse immobility, the South joins coordinated action of pressure. "Is perhaps the one of the alternatives to the current configuration of Europe, but the doubt is going to be in where tilt the balance Paris, because that will be what they predict the success or failure of this new Alliance born of the crisis," concludes these sources.

This message was last edited by ojosazul88 on 24/07/2012.

This message was last edited by ojosazul88 on 24/07/2012.

Like 0      
24 Jul 2012 11:41 by ojosazul88 Star rating. 171 posts Send private message

24 Jul 2012 21:19 by Abyss_Rover Star rating in Mallorca. 72 posts Send private message

Not a pleasure to read but a possibility.

_______________________ The new, advanced way to find what you are looking for.

Like 0      
25 Jul 2012 10:43 by xetog Star rating in Wiltshire/holiday ap.... 514 posts Send private message

Permit me at least a wry smile.  This does not mean that I am not greatly saddened by the plight of the Spanish or of any of the people of other PIIGS economies that were sold down the river by their politicians when simple greed and considerable corruption took them into the Euro years ago.  However, now in desparation all are encouraging closer union, not because any want to have their national identities subsumed into an undemocratic, authoritarian organisation in the hope that someone else will pay their debts, but because there appears to be no other way out.  The effect will be that the Eurozone will become a 'Greater Germany', since it will be they who have to shoulder the burden of the PIIGS debt.  Is this really  such a bad thing?  The Germans are both industrious and clever and if anyone can get the Eurozone countries out of their current fix, it will be them.  But, will the German people stand for it and will the people of the individual nations absorbed?  As we all know, this is not a new problem.  That particular torpedo has been running for years and we shouldn't be surprised if the potential outcome was not the original target.

Like 0      
25 Jul 2012 18:46 by jamesensor Star rating. 15 posts Send private message

It is entirely unlikely that the German people will accept the debts of Southern Europe, in full measure. \If you talk to almost any German they will say that they have supported the idea of Europe ever since the war.   But they have had the huge cost burden of rescuing East Germany.  They have seen their money go to support Greece, but believe that the Greeks have brought the problems upon themselves and have not done what they agreed to do to escape from their sad situition.

As for Spain, the problem lies with the huge over-lending of Spanish  banks to the local property developers. Most of the potential buyers for these properties are as always Germans or British. But right now, they are not buying much.  Valencia and Murcia where most of the overbuilding occurred have poured huge amounts of infrastructure support into these new developments.  Now both regional governments are bust as are many of the banks that lent on property, that cannot be sold.  It will take a decade or more to clear this situation and loaning money to banks will not in itself the resolve the real issue. 

That is that there is a huge overhang of property and associated infrastructure in Spain which may never be cleared. The German people reasonably enough do not wish to take responsibility for this mess.Nor. I believe. would the British if the UK was a Euro country.

My predictioon is that the Germans will not bail out Spain sufficiently to resolve the problem permanently and that Spain, as with Greece will be forced to quit the Euro, with similar consequencences for the value of Euro deposits in Spanish banks.




Like 0      
26 Jul 2012 13:35 by xetog Star rating in Wiltshire/holiday ap.... 514 posts Send private message

I too believe that one day soon the German people will call a halt to a project conceived in hope, but corrupted by the political classes of all the nationalities involved.  The problem is, will those whose hubris created the catastrophe be willing to swallow their pride and admit that in their arrogance they led their peoples into a blind alley?  The Greek people did not directly bring these problems upon themselves, but trusted their double talking leaders tales (as do we all) that the pot of gold had no bottom. Well, now we find it has, but who can blame those who were promised endless credit from believing the 'experts' who made the promises?  I can see why Germany now wants to limit the largesse that before seemed to issue freely from her exchequer and I agree that the British would have exactly the same reaction.  However, they say that the only answer if for complete political and fiscal untity and who will lead that union?  As the owner of a Spanish property with thankfully no mortgage, I just wonder how long it will be before the Spanish Government will see this as an opportuntiy to significantly raise property  taxes for  ex-pats and foreign non-residents?


Like 0      
26 Jul 2012 13:44 by Sanchez1 Star rating. 853 posts Send private message

I just wonder how long it will be before the Spanish Government will see this as an opportuntiy to significantly raise property  taxes for  ex-pats and foreign non-residents?

They wouldn't be allowed to do this as it would be illegal under EU law.  It would have to apply to all EU nationals, non-Spanish and Spanish alike.


Read my blog: Spain Money Saving Tips and Offers 

Use TransferWise to send money abroad. A lot cheaper than the bank and other online currency exchanges!.



Like 0      
26 Jul 2012 14:24 by jamesensor Star rating. 15 posts Send private message

As Spain is unable to devalue whilst it adheres to the Euro, the Government will have no choice but to raise taxes.  Whilst GDP is falling due to its currently over-valued exchange rate within the Euro, the Government tax take will fall.  To maintain even a reduced level of public services, it will have to increase taxation.

Property is a likely target as it is easier to assess and collect tax on than an income tax, which has many possibilities for evasion. But as the previous report states any such tax must fall on both Spanish and foreign owners alike,   A similar tax has already been proposed in France.  it is unclear whether those many Britons and Germans who have a main residence in their native country will be taxed on their second or holiday home. it is also unclear whether there is as yet inter-governmental exchange of information in place that would permit them to identify second homes, as such.  


Like 0      
26 Jul 2012 14:58 by xetog Star rating in Wiltshire/holiday ap.... 514 posts Send private message

I have never noticed that breaking EU rules in the past has ever bothered the Spanish Government, they just find some creative way around it.

Like 0      
26 Jul 2012 16:58 by jamesensor Star rating. 15 posts Send private message

Not so easy now that they are expecting EU countries to bail them out. They will come under the microscope.

Like 0      

Pages: 1 |

Post reply    Start new thread

Previous Threads

Any vans with space from Valladolid to Alicante? - 0 posts
disabled and looking for a new life in torrevieja-am I crazy or can I actually do this? - 3 posts
Certificate of Non-Residence - 13 posts
Driving license - 6 posts
a uk debt - 14 posts
We save people 40% - 60% on the cost of fuel guaranteed - 0 posts
Removal Van For Sale - 0 posts
Advice required on mobile homes - please - 0 posts
Kerry's Kafe, Calahonda, Costa Del Sol - 0 posts
Putting Irish children into school in Spain. - 2 posts
Driving back to calais - 7 posts
EU Citizen (UK) & none EU Citizen wife (Thai) coming permanently to Spain. - 10 posts
Sonora ELE Language Awareness: a new way lo learn Spanish online - 0 posts
poodles - 3 posts
Refridgerated vans - 3 posts
Using a UK Registered van for business in Spain - 15 posts
Healthcare Reform for ex pats - 10 posts
England to Spain with 3 cats and a dog - 0 posts
overun with ants - 14 posts
Purchasing adjacent property to extend house in Almeria area - 1 posts
furniture for sale in Murcia - 10 posts
My Technomate 5402HD satellite receiver needs repaired - 0 posts

Number of posts in this thread: 10

DISCLAIMER:  All opinions posted on these message boards are the opinion solely of the poster and do not necessarily reflect the opinion of Eye on Spain, its servants or agents.

1 |
Our Weekly Email Digest

This site uses cookies. By continuing to browse you are agreeing to our use of cookies. More information here. x