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Discussion Starter · #1 ·
I swear I'm not deliberately looking for negative news, but...

BBC News - Spain's manufacturing sector sees contraction worsen

This article includes such gems as
The rate of contraction in Spain's manufacturing sector was worse than that of Greece in May, according to a business survey.
and
"Things went from bad to worse in the Spanish manufacturing sector during May," said Andrew Harker, the report's author.
Of course it's not just Spain
Chris Williamson, chief economist at Markit, said the figures were a cause for concern: "All four of the largest eurozone nations are now reporting worryingly sharp downturns in their manufacturing sectors.
(France, Germany, UK and Spain???)
 

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I swear I'm not deliberately looking for negative news, but...

BBC News - Spain's manufacturing sector sees contraction worsen

This article includes such gems as
and
Of course it's not just Spain
(France, Germany, UK and Spain???)
Pesky hopefully it is good news for Spain in a sense as it illustrates that stimulating demand and thus growth is a broader requirement and not just a spanish problem. Up to now Germany has done very well out of the pain of others (although not necessarily by deliberate policy).

The danger is of course that France and Germany will look after themselves leaving Spain to sink. And the UK will just print some more money :)

But we don't have to wait long for the Greek result (or non result :rolleyes:) and then we will know what the short-term future holds : :( or :(:(
 

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The danger is of course that France and Germany will look after themselves leaving Spain to sink. And the UK will just print some more money :)
:(:(
Nah. If we sink, we will drag them with us.
Besides, France's debt problem is huge, but no one seems to acknowledge it
 

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Spain's overall debt and deficit are lesser than those of the UK. Credit to Zapatero.
But....that isn't the crucial factor.
Spain's borrowing costs are approaching the unsustainable. The UK's borrowing costs are at a much lower level , as deposits flee from euros to the 'safety' of the £ and Swiss franc. Billions of euros have left Spain for these 'safe havens' although the UK won't be for long as more QE is in the pipeline, it seems.
The point is that Spain has severe structural problems and is uncompetitive. Its wage costs have risen and productivity fallen. It has currently no plans for growth.
The Spanish banking sector is in need of urgent rescue....the question is how and by whom...
The UK is in a mess too....the stronger £ has given a setback to the growth via exports strategy of Boy George. But it has low borrowing costs and - still - the world's major financial sector which brings in over one-fifth of Government revenue.
 

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Discussion Starter · #7 ·

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worth a read

This is a couple of paragraphs from a very thought-provoking article in today's 'Conservative Home' website.

Well worth further reading.


Andrew Lilico: Can democracy and private property coexist for much longer?

I'm angry. And when I'm angry I sometimes struggle to express myself, in writing, moderately and temperately and coherently. That Spain should choose to bankrupt itself bailing out banks that are too large for the state to afford, that it should do so having seen the example of Ireland before it, and that it should cross the Rubicon to doing so because it would be politically embarrassing for the ruling party to allow Bankia to fail because Bankia's establishment in 2010 was the pet project of the ruling party's regional governors is...shameful.

The concept of private property seems to have become devoid of meaning. Somehow if a rich person is going to lose money because she lent money to the wrong bank - either in the form of large deposits or the bonds bought by her pension fund, or whatever - it's become unthinkable that she should lose any of it. It isn't simply her money to lose - her business; her private property. Somehow it is a common political duty of the whole country - maybe the whole developed world - to keep her rich. Her property is ours. "Su casa es mi casa."
 

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More on
To Bail Out or not To Bail Out.

BBC News - Spain: No request for bailout, says minister

Why doesn't Merkel want the money to go directly to the banks?


And we also have this from newsy.com which shows snippets from different news sources
Europe Weighs Spanish Bailout

Meanwhile we have the tennis and the football to look forward to...:)
I think I shouldn't have started that new 'Worth a read' thread but posted on this one instead.


Merkel wants to avoid giving money directly to the banks as it would infuriate many Greeks and would have a direct effect on the outcome of the election. Greece would see it as Spain being let off lightly, getting favourable terms and conditions as opposed to the stringent ones Germany was instrumental in imposing on them.

Rajoy and his team have made themselves look complete incompetents by mishandling this situation in the vain hope of maintaining their political street-cred.
 

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Why doesn't Merkel want the money to go directly to the banks?
Possibly that question is the EU problem in a nutshell.

When the UK put money into LloydsTSB and RBS they took shares. If Germany/ECB put money into Bankia do they get shares?

If Germany/ECB give it to Spain then they presumably buy control and accountability! Which might be why Rajoy doesn't want it to go through his books!

But only 12 days before we get the Greek result. And in the meantime today Spain is entering the bond market which 48 hours earlier it said was closed to it. We will see.

Exciting if sad times :)
 

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Alessandro Giansanti of ING (via Reuters)


It was a good auction. The amount was very limited, and especially in the five-year to the 10-year there was some cheapness on the curve that helped them rally into the auction. There is a better environment over the last few days for Spanish bonds.

Talk of a rescue for Spanish banks is the thing that is reducing risk aversion in the markets.

9.49am: Breaking - Spain's bond auction has just finished. Bond yields have risen, but there was solid demand for the debt. And crucially, Spain sold slightly more than it was aiming for - €2.07bn in total.

Here are the details:

€638m of two-year bonds sold at a yield of 4.335%, up from 3.463%
€825m of four-year bonds sold at a yield of 5.353%, up from 4.319%
€611m of 10-year bonds sold at a yield of 6.044%, up from 5.743%

UPDATE: The bid-to-cover ratios (which show how much demand there was) rose for all three bond types. Another good sign.

However, as we mentioned earlier, there was speculation that Spain's domestic banks might help the Madrid government by bidding heavily in the auction. We should see details of that later
 

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Ok.... Ive read the article (and the comments).

My first thought was that this read like a rather earnest PhD students paper. It opened a debate by taking a rather one-sided view, hoping that others would fill in the blanks!
I also thought that the case regarding the loss of private property to government subsidised institutions (subsidised by the taxes of ordinary people, who then in theory became the owners of that property) wasn't well argued (hence some of the comments).

Mary,
you picked out the two most pointed statements in the whole article.

I agree with the first statement absolutely, but the second (I think...) is muddled.

I can see that the writer is stating that those who invest their private property in banks are doing so at their own risk and therefore, should not expect to be helped by a bail out when things go wrong. After all, we live in a democracy where the decisions we make on the use of our property should be ours, not the states.

But the writer appears to assume that it is only the rich who do this.

As at least one person commented, to let the banks collapse would hit the poor and particularly the people in the middle, whose pension funds are invested there, much more than it would hurt the rich.

Perhaps more later.... :)
 

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Why doesn't Merkel want the money to go directly to the banks?
If it goes to governments in the form of a bailout it has all sorts of strings attached - not only forced austerity measures, but the privatisation of public assets. These can then be bought up at rock-bottom prices by German investors. It effectively puts an end to democracy in the bailed-out country, as it restricts what future governments can spend on social welfare, education etc.
 

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If it goes to governments in the form of a bailout it has all sorts of strings attached - not only forced austerity measures, but the privatisation of public assets. These can then be bought up at rock-bottom prices by German investors. It effectively puts an end to democracy in the bailed-out country, as it restricts what future governments can spend on social welfare, education etc.
The official line is that Spain has already implemented most of the necessary austerity measures, including privatisations.

I think it's more likely that the reason is the knock-on effect on countries like Greece, Portugal and Ireland if Spain gets off 'lightly'.

Real democracy, whatever that is, ended with the Single European Act. Because so many free market meassures have a severely negative impact on 'ordinary' people, it's imperative to thin out democracy as much as possible. Decisions that constrain government room to act are taken at the highest level removed from popular control: the IMF,WTO, G8, European Commission, ECB. What real control have the people of Spain or any other country have over these institutions?

There is amidst all this chaos an opportunity for a different European Union. But the move to closer fiscal integration or a United States of Europe will not be progress towards democratic accountability - quite the opposite.
 

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The official line is that Spain has already implemented most of the necessary austerity measures, including privatisations.

I think it's more likely that the reason is the knock-on effect on countries like Greece, Portugal and Ireland if Spain gets off 'lightly'.
Without knowing the fine details I've seen and heard it said plenty of times now Greece cooked the books big time before entry to the euro so compared to Spain which did meet requirements then do you think Spain should be allowed a different approach considering it hopefully only needs a fraction of billions compared to Greece? I think it should!
Real democracy, whatever that is, ended with the Single European Act. Because so many free market meassures have a severely negative impact on 'ordinary' people, it's imperative to thin out democracy as much as possible. Decisions that constrain government room to act are taken at the highest level removed from popular control: the IMF,WTO, G8, European Commission, ECB. What real control have the people of Spain or any other country have over these institutions?
That sounds right to me
There is amidst all this chaos an opportunity for a different European Union. But the move to closer fiscal integration or a United States of Europe will not be progress towards democratic accountability - quite the opposite.
And that's the truth.

They're trying to cure the disease of a very sick patient with an aspirin, when at the very least it needs full on antibiotics.
Ok a silly way of putting it, but what keeps coming into my thoughts is, if something can last for around 2400 years (please correct me as my history is only a google search away lol) , then it, the Drachma can't have been so bad can it?
Surly removing Greece in an orderly way is better as this will limit the shock factor.
Rather than the EU chucking more cash down a very deep Greek hole in the ground and burdening Greeks with even more decades of debt, surly it would be better to support their own currency for a few years to offset things like essential imports that will cost the people more if they do go back to the Drachma. The single currency isn’t working for Greece, being shackled to it has hurt Spain also.
Extra short-term pain for some long-term gain! IMHO is needed.
 

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Without knowing the fine details I've seen and heard it said plenty of times now Greece cooked the books big time before entry to the euro so compared to Spain which did meet requirements then do you think Spain should be allowed a different approach considering it hopefully only needs a fraction of billions compared to Greece? I think it should!
That sounds right to me
And that's the truth.

They're trying to cure the disease of a very sick patient with an aspirin, when at the very least it needs full on antibiotics.
Ok a silly way of putting it, but what keeps coming into my thoughts is, if something can last for around 2400 years (please correct me as my history is only a google search away lol) , then it, the Drachma can't have been so bad can it?
Surly removing Greece in an orderly way is better as this will limit the shock factor.
Rather than the EU chucking more cash down a very deep Greek hole in the ground and burdening Greeks with even more decades of debt, surly it would be better to support their own currency for a few years to offset things like essential imports that will cost the people more if they do go back to the Drachma. The single currency isn’t working for Greece, being shackled to it has hurt Spain also.
Extra short-term pain for some long-term gain! IMHO is needed.

The main difference between Spain and Greece is that the Greek Government borrowed wildly and used the 'cheap' loan money to create even more jobs in the already bloated private sector and to fund unrealistic public sector wages and pensions - thus no doubt hoping to create a grateful 'client base'.

The Spanish Government under Zapatero was comparatively prudent. The bank debt was run up by corporations and individuals during the ill-fated construction boom.

But....although yes, Greece did 'cook the books', aided and abetted by those clever people at Goldmann Sachs, it is not the only eurozone country to bend the rules.
Germany obviously did not exercise due diligence over the Greek application.....or didn't want to.
 

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good news??

a local councillor has posted this link on FB this morning

the article is in Spanish but the main point as far as Jávea is concerned is that the town has the highest number of new jobs/employed in the Marina Alta............ 104

and that the number of registered unemployed in the town has dropped to 2000

if that's the good news, what's the bad :confused2:

Xbia lidera la creacin de nuevos puestos de trabajo durante el mes de mayo. Las Provincias
 
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