Spain's In Trouble Again: But Is 7% The Danger Level? |
| Forbes - Jul 22, 2012 |
Spain looks to be in trouble again: one of the regions has now said that it needs bailing out. Which is a problem, as it is the Spanish central government that has to bail Valencia out and they don’t have any money either:
“U.S. and European stocks fell on Friday and the euro hit record lows after Spain’s heavily indebted Valencia region asked for financial aid, increasing investor fears that the Spanish government will seek a full-blown bailout.
Valencia sought help under an 18 billion euro ($22.1 billion) program passed on Thursday that aims to bolster regional finances.
As I see it this is the real problem in Spain. The national finances are not all that bad. They were running a budget surplus before the crisis hit, the national debt as a percentage of GDP is not too bad (certainly lower than the US, Italy or Greece). Even the big three commercial banks seem to be in good enough shape: it’s the more regional, used to be not for profit, cajas that are almost all bankrupt.
Read Full Article from Forbes
- Posted: 2012-07-22 06:01:31
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