Archive for May 31st, 2012

First Greece, Now Spain: Who’s Next in the ‘Eurozone’ Crisis?

posted by Ida B. Wells IV @ 17:15 PM
May 31, 2012

   Now bankers and politicians in the European Union (EU) are concerned that there are not enough funds to help their member with the fourth largest economy, Spain which––like Greece––is suffering under the heavy load of stern austerity.

Yesterday, Landon Thomas, Jr. in “Europe Fears Bailout of Spain Would Strain Its Resources,” wrote for The New York Times:  “Spain fast eclipses Greece as the focus of the euro zone debt crisis.”  And, like Greece, Spain complains of extremely high interest rates, and merciless debt-due demands.

And today, Thomas writes in his Times article, “Europe Fears Bailout of Spain Would Strain Its Resources.”  Those resources will soon be in a new $867 billion bailout fund that should be available for EU members this summer.  But, alas, that just won’t be enough money to go around to repay all these debts.

In stock markets around the world “turmoil mounts over the government takeover of the giant Spanish mortgage lender Bankia.”  Upon that news, monied investors started fleeing Spain, and markets sank.  It seems that Spain’s economy will need bailouts larger than that of Portugal, Ireland and Greece put together.

Santiago Carbó Valverde, professor at the University of Granada and a consultant for the Federal Reserve Bank in Chicago, explains, “At seven percent, it will be very hard for Spain to obtain funding.  “It’s not just the government either, but big banks and companies as well. The markets will close.”

Most startling, is that Spain’s Prime Minister, Mariano Rajoy, does not really want a ‘Greek-style‘ bailout, because, as Thomas explains, “as Athens and Dublin and Lisbon [the capitols of Greece, Ireland and Portugal] have found, those rescues typically come with demands for deeper budget cuts and new fiscal rigor.”

Just as Greece now groans under an impossible-to-meet debt load, those excessively onerous demands would make Spain’s payback conditions equally outlandish.  The cost could soon reach an astronomical 500 billion euros.

Acknowledging that his nation’s budget deficit has grown by 26 percent in just one year to 8.5 percent, making it highly improbable that it can meet the EU’s target of 5.3 percent this year, Valverde says, “We are a highly leveraged nation.  What we need is a Europe-wide solution.”

Just as the blog,, asserted yesterday, “invisible forces are quietly forging a war throughout Europe.  It is an economic war.  And the first losing victim is Greece.”

Now its author can add, “And the next victim is Spain!”  Then, the Irish will soon vote on these same issues.  Indeed, we need prophetic Christian calendars to chart the rest of this year’s EU Humpty Dumpty free fall.  In these confessedly Christian nations, leaders surely learned that line in The LORD’s Prayer, “And forgive us our debts, as we forgive our debtors (Matthew 6: 12).”  Didn’t they?

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