Analysis Of The Spanish And Greek Crisis-00-6551

By Author: rafalinares
Total Articles: 4393
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The Spanish problem is wholly unlike that of Greece and these two should not be confused in the market. The Zapatero Government has been slow to act forcefully to the problems.

The downgrading of Spain was done for unusual reasons. Spain's has a debt to GDP of 90% (against 144% of for Greece) and a budget deficit of 7% (against Greece's 14%). More importantly, the spread over German bunds is 250 bps against 700bps. With an AA rating (equated to Greece's BB), even after the recent downgrading from AAA, Spanish creditworthiness is strong.

We are living in a unusual earth where everything that is said may be published and then becomes a self-fulfilling foretelling. The role of the media is important, but likewise the way the authorities communicate is critical.

Jose Luis Rodriguez Zapatero and his Government require to stick to the facts instead of threatening the rating agencies or the markets. I happened to be in Madrid last week on the day Spain was downgraded. It was portrayed by as a catastrophic situation. Now is not the time for more than dramatization and the endless shows of the ...
... European leaders give more an impression of confusedness than leadership.

At this time, Spain's Socialist government is observing its political power dwindle as it struggles to chart a path out of deep financial trouble, failing so far to satisfy conflicting demands to cut its budget and stimulate occupation creation.

The arrival months could bring far deeper trouble as Prime Minister Jose Luis Rodriguez Zapatero moves to reform the country's labor market, risking national strikes and the loss of aid from trade unions, a core source of his center-left party's strength.

Although there looks being no immediate threat of it falling, Zapatero's minority government is already running into severe trouble.

Meanwhile, the closure of companies is ongoing. The bankruptcy filings are incrementing.

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http://www.articuloz.com/bancarrota-articulos/la-necesaria-adaptacion-del-concurso-de-acreedores-a-la-pyme-2506506.html. http://www.articuloz.com/bancarrota-articulos/el-concurso-de-acreedores-un-eficaz-recurso-para-la-crisis-empresarial-2497126.html