| An indictment of Spain's conservative government Jul 30th 2012, 17:24 By Germans! (BTW, ladies, nice nude pic.) http://www.spiegel.de/international/...-a-847121.html Quote:
Is this stable democracy, this reliable European Union partner often praised as the alliance's "southern anchor," the fourth-largest economy in the euro zone, after Germany, France and Italy, at a crossroads? And could it even see a return to authoritarian, nationalist times, 37 years after the death of former dictator Francisco Franco? Will there be a royal road for Spain, or is prayer along its famous pilgrimage route, the Way of St. James, the country's only hope?...
...The conservatives became the country's biggest arsonists, heating up the real estate mania with their neoliberal land and building policies, fires they are now expected to put out too. But the EU also shares some of the blame, because it neglected to require Spain to employ targeted planning procedures and was also sloppy when it came to monitoring the funds. As a result, Spain was never able to completely shed the protectionism inherited from the Franco era and become competitive. Instead, it developed a superficial dynamism based on borrowed money. The perceived rise in the value of real estate from year to year enabled Spaniards to continue borrowing money and leading increasingly luxurious lives. Almost unavoidably, education and innovation were neglected, while the sweet, slow poison of debt led to a dependency that has now become all but inescapable...
...Spain is not Greece. It has competitive products to offer, albeit relatively few in the high-technology segment, as opposed to the agricultural sector, in which it excels. Some of its agricultural products, like wine, olive oil and ham, often surpass those of EU competitors in terms of quality and value for the money. The Spanish trade balance doesn't look bad. The government debt level, currently at 75 percent of GDP, is comparable to Germany's and thus below the EU average (not to mention the United States and Japan). The high interest premiums for Spanish government bonds on international markets are not based on economic fundamentals, as German Finance Minister Wolfgang Schäuble noted last Tuesday during a meeting in Berlin with his Spanish counterpart. Spain's main problem is liquidity, specifically with its banks...
...The fact that the markets lack confidence in Madrid is partly a result of the inability to coordinate economic policy and to explain the reasoning behind measures taken by the government. But that government is headed by Señor Rajoy. Never since Franco's death in 1975 has a prime minister lost his luster as quickly as Rajoy. The taciturn notary, who wears a beard and rimless glasses, and was voted into office eight months ago with an absolute majority, now enjoys the confidence of only a fifth of Spaniards in polls.
If Spain does indeed require the full program of a European bailout, at an estimated cost of least €300 billion, and if the feared "men in black" from the troika, consisting of the European Commission, the ECB and the International Monetary Fund, assume control, it will put an end to Rajoy's political career. A prominent former party member is already calling for early elections. For too long, the prime minister believed that his mere presence at the head of the government was enough to ensure that Spain would stop "being a problem and become part of the solution."...
...Perhaps what infuriates hundreds of thousands of people and drives them into the streets is not that they are being asked to make sacrifices, but rather the lies of the political class. Rajoy, who consistently emphasized during his campaign what an honest man he is, has exhausted the Spaniards' patience with sugarcoating and shameless lies, especially on the subject of banks.
Conservatives and Socialists alike consistently praised Spain's banking system as the best in the world. Rodrigo Rato, economics minister with the People's Party under José María Aznar, the prime minister who presided over the boom years, was considered the father of the Spanish economic miracle. He was also the one who liberalized building laws and boasted of giving all Spaniards access to the stock market...
...The executives of savings banks, which also talked low-income borrowers into taking out mortgages, will remain unscathed if these borrowers default on their mortgages. The same holds true for bankers who speculated with pensioners' savings.
Retirees who have been harmed as a result are protesting in their underwear in front of branches of Novagalicia Banco, a savings bank in the northwestern province of Galicia. They've written the words "You've stripped me completely" on their underwear. Naked firemen are protesting in the neighboring province of Asturias. In Seville, outraged citizens staged a bank robbery, but instead of pulling out weapons they stamped their feet and danced the flamenco...
...Amid all this hardship, Prime Minister Rajoy is planning an act of liberation with the help of a newly forged euro axis stretching from Rome to Madrid to Paris. He has invited Italian Prime Minister Mario Monti to a meeting at Moncloa Palace on Thursday.
Together with his ally, Rajoy intends to work out a new strategy to apply pressure to Chancellor Merkel. It pits the southern and northern Europe against each other. On the same day, Draghi will have to explain to his colleagues on the ECB Council how his offer to print money is supposed to work.
Spain has made some very important decisions in the last few months, and it will continue to do so, says Rajoy. "Now it's up to Europe to apply the same amount of energy and make decisions just as quickly," he said.
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