Saturday, May 26, 2012

Greece economic debacle: Et tu Spain?

Loose translation: Greece is on the brink, how about you Spain? 

Politicians, banks and regular people around the world are worried about the endgame for Greece and the impact or ripple effect a bad outcome there could have on some of the weaker Eurozone economies like Spain.

The fact of the matter is, however, that Spain is in trouble all on its own due to some of the same indiscretions as Greece, and a bad outcome in Greece might just accelerate conditions on the Iberian Peninsula (including Portugal) that would at some point have come to a head anyway.

An article at Global Economic Trend Analysis provides some of the grim details.

"Spain's Bankrupt Catalonia Region "Running Out of Options" to Refinance €13 Billion; Total Regional Needs are €50.7 Billion; Regions Want "Open Bar" with Central Bank Guarantees

The crisis in Spain is rapidly coming to a head. This crisis has nothing to do with Greek "contagion" as is widely believed. Spain dug this hole by itself. Spain's immediate unsolvable problems are a bankrupt banking system coupled with bankrupt regions that have no way to pay bills. Spain's regional governments need to roll €35.7 billion and there is current deficit of €15 billion..."

Read the rest of the article here.

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