Spain

Austerity in, Euro out – Is this Greece’s future?

February 13, 2012 by

As Greek politicians approved a tough austerity package amid fierce protests, one question dominates: is an orderly exit from the Eurozone available for Greece? And just what might be the consequences? Recently Citibank put the probability of such a Greek withdrawal in the next 18 months at 50%. Greece is seeking to finalise a deal with bank creditors on Greece’s private sector borrowings which would cancel €100 billion euros ($A125 billion) of its sovereign debt of over €350 billion.

The Elephant in the Room is Spain, Not Italy

February 6, 2012 by

Another day and the markets remain fixated on whether Greece comes to a “voluntary” arrangement with its creditors. The key word is “voluntary” because the myth of “voluntary compliance has to be sustained so that those deadly credit default swaps avoid being triggered. But let’s face it: Greece is a pimple. If the rest of the euro zone could cut it lose with a minimum of systemic risk, Athens would have long gone the way of Troy.

Post-Zapatero Spain: Obstacles and Opportunities

December 16, 2011 by

Well, it happened. This past November, Spain’s Socialists (PSOE) got hammered at the polls and (after failing twice before) incoming Prime Minister Mariano Rajoy of the nation’s conservative Popular Party (PP), got his absolute majority in Congress. Next week he will be sworn into office. Now what?

Greece in 2011: Argentina in 2002 Redux?

December 14, 2011 by

The Greek tragedy of sovereign debt, the overlay of a potential for regional recession, social turmoil, perceptions of structural corruption, and political theatrics and brinkmanship is all too familiar. This is reminiscent of Argentina in 2002, which remains the largest sovereign debt default in economic history.

The Policy Implications of Spain’s Election

November 15, 2011 by

On November 20th Spaniards will go to the polls. Barring an epic upset, Mariano Rajoy of the center-right Popular Party (PP) will be the country’s next Prime Minister. Many Spaniards have grown tired hearing that the Socialist party (PSOE), which has been in power since 2004, has an answer to the country’s severe economic crisis. They don’t.

The Price of Union

October 27, 2011 by

Europe is close to sealing the deal on a unified approach to the looming financial crises - but even at this late hour there are still tensions that threaten to boil over. Many are surprised to observe the European Union’s inability to execute a bailout of Greece. It is even more surprising to think through the consequences of a failure to find a solution.

The cucumber scare: Spain absolved of guilt

June 5, 2011 by

Rumor of a European vegetable conspiracy, the suggestion that the E. coli epidemic was deliberately engineered to hurt Spanish and/or other European farmers thereby boosting their own agricultural sector, is the direct result of the EU’s distorted agricultural policy. But farmers world over stand to suffer, whether or not there was a conspiracy, because the global demand for fresh vegetables is falling.