Skip to footer

Euro debt crisis: Is Spain the new Greece?

|
Daniel Ochoa deOlza/AP
People protest Spain's austerity measures during the May Day rally in the center of Madrid, Tuesday, May 1, 2012. Spain's Prime Minister Mariano Rajoy is trying desperately to cut a bloated deficit, restore investor confidence in Spain's public finances, lower the 24.4 jobless rate, and fend off fears it will join Greece, Ireland and Portugal in needing a bailout.

You're gonna love this (via the Globe & Mail):

Global markets may have now priced in a full-blown default by Greece, or even the country’s exit from the euro zone. But they haven’t factored in a financial meltdown in Spain, and that is where the new focus is shifting.

Spain would be a much bigger problem than Greece, just as a matter of size. It has debt of some 735-billion euros, of which 175-billion euros matures this year. In comparison, Greece’s debt amounts to about 300-billion euros.

Spain is working on a new plan to bolster its failing bank industry and Prime Minister Mariano Rajoy says the government will detail new financial reforms this Friday.

But the bearish economist Nouriel Roubini says Spain’s problems cannot be fixed from within. In a Financial Times editorial on Wednesday, he argues that the country needs direct capital injection from the EU bailout fund.

The problem is that both sides are resistant to the move. Germany, already burned by Greece, doesn’t want to give more money without strict fiscal controls. And Spain doesn’t want to give the EU control over its banks, Mr. Roubini says.

Now lucky, Spain's robust 23% unemployed economy will cushion the blow when the inevitable mass-bailout actually happens.

BTW, Roubini usually gets the big macro picture right in the end, where he fails (repeatedly) is in terms of what his progonostications will mean for markets.

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.
editor@csmonitor.com
Subscribe
Mark Sappenfield
Editor

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

Subscribe to insightful journalism

QR Code to Euro debt crisis: Is Spain the new Greece?
Read this article in
https://www.csmonitor.com/Business/The-Reformed-Broker/2012/0510/Euro-debt-crisis-Is-Spain-the-new-Greece
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe