For the first time in many years, the nation finds itself at a major crossroads of history. in one way or another the spanish economy ─ that hasn’t raised its head since the times of the catholic monarchs ─ is moving inexorably towards bankruptcy; european intervention, the expulsion from the euro zone or all the ills at once still exists.
However many naïve people like to think otherwise. they should open their eyes: this country has no short-term solution and we are doomed to return to the first decades of the twentieth century: those melancholy and pessimism caused by the “evils”of spain after the loss of their last colonies and reflected by the writers of the 1898 generation in their books.
The first problem that afflicts the public accounts is the state deficit and public debt, which, as Felipe Gonzalez said recently, “are not alarming”. It must be around 55.2 percent of gdp, without taking into account the debt hidden in the autonomous commu-nities through their public enterprises, which may add another three or four points.
it is not alarming, say, in connection with the itlalian debt, which is estimated at around 115 percent or that of belgium (97.9 percent), while numerous national and international institutions, from the Carnegie Foundation in washington, up to the world bank, international monetary fund, ecofin, oecd, do not hide the risk that this could grow exponentially in a two or three years and that the solvency of the kingdom of spain would make impossible even the payment of interest.
Despite the strength of the financial system Spanish (the Grupo Santander is considered the bank more powerful of the Euro zone) what is really concerned is a question differently. It is the private debt, the most important of the world, which is estimated in excess of 200 percent of GDP. Part of these financial commitments that were spanish banks with their customers, some 602,000 million euros, has been endorsed by the interbank market to the European banks(especially the germans) due to lack of liquidity of savings and spanish banks. Therefore, a bankruptcy of the Spanish credit institutions could cause the collapse or perhaps a crack in chain of French banks and Germans, putting at risk the Europe of the Euro.
INSTEAD OF USING EUROPEAN FUNDS TO CREATE COMPANIES SPANIARD POLITICIANS "SMOKED A CIGAR". THEN PUSHED THOUSANDS OF PEOPLE TO BORROW TO PULL ON THE DOMESTIC MARKET
This finantial balloon has its origin in the so-called “years of bonanza”, in the epoch of the Spanish economic miracle, that neither president José María Aznar included ever believed. In that period (1996-2008) the money from the Spaniards and funds that came from the European Union was not used in productivity, nor to create healthy and competitive firms to sell abroad. It was squandered in to to build houses paying astronomical prices (it must be taken into account that in the last decade, until 2008, the price of housing in Spain doubled) and in to increase at the same time the public deficit with pharaonic unprofitableworks.
The banker Luis Vals Taberner defined this policy focused exclusively on domestic inversion as the worst of all. "It is intolerable. Comes to be equal to give ten euros to a poor to eat and survive and then to find him smoking a good cigar, a cuban cigar with your money".
What all so-called Spanish miracle was, according to this thesis, a crude mirage. Spain grew to 3 percent because of the fictitious increase in the Gross Domestic Product of the European Community generated by joining the GDP of the 21 member countries of the Euro in one. The country spending these false value in constructing houses that then bought to the same Spaniards and some foreign tourists. The money, of course is borrowed from banks. The madness of the industry of brick led to Spain to built in 2006 more housing that France, United Kingdom, Germany and Italy together. A genuine barbarity, according to all the experts.
That is why what truly concern of European dirigents in the short term is not the public debt of the spanish state but the private debt of his inhabitants. The declining results of the stock exchanges, where banks have been the most affected values of Spanish Ibex 35, so reveal. That is why the nervousness of European financial system, trapped in a hole has reached such levels of concern that a week ago two German newspapers and one of the United Kingdom, The Financial Times Deutschland, Frankfurter Alemaine Zeitung and The Sunday Telegraph, requested the intervention of the European Union intervention to prevent 'the bankruptcy of spain, after the greek.
The lack of a strong government in Spain, which holds a determined and resolute leadership, as in Germany with Angela Merkel or in France with Nicolas Sarokozy has led to the same time to the Treasury bonds to be listed on international markets at a price 230 points above the Germans. That is why has been necessary in recent days carrying out a EU cover up intervention in the Spanish economy due to the unwillingness of the president Zapatero to take measures against the crisis. While Sarkozy and Merkel have announced the cut in wages and costs of the State, in Spain has been the European Community which has ordered to the Government to reduce the 1.75 percent on the GDP public expenditure. The president of the Spanish Government, as well as a faithful servant, has obeyed immediately.
However, the danger of an intervention has not ended. The crisis in the Kingdom of Spain continues in the eye of hurricane. It can be said that the combination of public debt and the private have created a kind of vicious circle which is almost impossible exit without without a prior surgery.
The indebtedness of the families to acquire a house occurred at a time of economic expansion, with the wages growing above the real productivity of the country. The mortgages were contracted with the banks thinking that this situation of increase of household wealth was not going to finish ever. Then, in 2008, occurred the huge world economic contraction and many families woke up and realized that they were not living in the earthly paradise.
Almost at the same time, the Government is required by the EU to avoid the bankruptcy of the public sector. The warning was transfer immediately to the citizen with wage cuts and others measures for reducing their purchasing power through tax increases confiscatory (VAT, Personal Tax Income, tax on the benefits of equity investments). Since then, those people who had been living in an idyllic world and had borrowed heavily, observed that barely have money to cope with their mortgages.
Therefore, with the public debt installed in one of the points of court from a pincers and the private in the other, the situation is so delicate that if pressed too much in one of the parts the consequences could be disastrous for the country. Also for the rest of the banks of the European Community that a day believed in the Spanish miracle and provided hundreds of millions of Euros to the national financial system, money that now is difficult to recover. Spend the Euro for "investment" in smoking cigars has those risks.
The shunami I have just describe it is not the worst of all. Rodriguez Zapatero Spanish president and the EU until jun 30 known as 'Mister Been', the comic character of the british films, meanwhile, is in the antipodes, thinking that the electric car and some nonsense more is the solution to end the crisis as the development of a map of the women clitoris (it is not a joke). The opposition parties are also lost in this stupid and senseless battles.
But even, remain optimistic and thinking that the crisis is resolved in a decade, the serious problem Spanish is the lack of a serious entrepreneurship, forceful, willing to stake their money and exit to compete in international markets, especially in China, India or Brazil. Indalecio Prieto, leader of the basque socialist, said nearly a century ago. "If we had a dozen on businessmen of the size of that have created the wealth and prosperity in Bizcay Spain would be a great country".
These large brains of finance, industry and trade still missing. They have been replaced by speculators, entrepreneurs who only know how to live in the State aid and other even worse, those who only know win the public competitions for their companies through the corruption of the politicians, at the italian style. Only two of them, president of Telefonica, César Alierta, and of the Santander Group of Santander, Emilio Botin, spared this bleak picture. Unfortunately Spain need many more with the thrust in the work and the tenacity of them.
Because a nation as dismal political as well as spain can survive but without a large business class is doomed to failure. The formation of good entrepreneurs is a national priority. Without them the country is doomed too to return to the years of melancholy and of the disaster Spanish, i.e. to retreat to the loss of the colonies of 1898, which inspired an entire generation of writers -the generation of 98- that drew in their books one of the landscapes more pessimistic in the history of the nation.