"Madrid may be entering the kind of death spiral that afflicted Argentina just a decade ago." Warned long ago Paul Krugman , and Joseph Stiglitz repeated now.
He said a few months ago the great guru of global finances, the New Keynesian Economics Nobel Prize 2008, Paul Krugman, and now repeats it another influential guru, also American and also Keynesian Economics Nobel Prize (2001), Joseph Stiglitz: "Spain could be entering the kind of death spiral that afflicted Argentina just a decade ago." are thus two major international financial analysts who see the shadow of the yard plan on Spain. "Only when Argentina ended its fixed exchange rate against the dollar began to rise and reduced the deficit. Spain has been attacked by speculators, but it could be just a matter of time, "said Stiglitz.
But that turned out to which at the time Argentina is not valid for Spain, membership in the eurozone, with no possibility to devalue its currency, because the old peseta was merged in 1998 with the currencies of 16 other European Union countries to create the euro as common. Both Stiglitz and Krugman and other top analysts see Spain as one of the weakest links in the European Union and reject the image you want to give the EU that has already left behind the recession is. It is feared that effect occurs called W, or recession in the second round. In an article in the Sunday Telegraph, Stiglitz argued days ago, when analyzing the situation in Europe before the crisis, that "Spain is the most dangerous, but also in severe Ireland and Greece trouble. " And Stiglitz adds: "The euro is facing its own crisis and may disappear, a victim of its own convertible inward. It is clear that countries have no problems today, as Argentina does, of individual currencies and therefore flexible exchange instruments. "
The economist said that "as in Greece and Ireland, the financial weakness of Spain becomes easy prey for vulture funds and other speculators. The naive reaction of the European Central Bank or the IMF, such as cutting expenses or pensions and raise taxes, only make things worse. " And therein lies the critical leading the two economists, coinciding with the position that have maintained in Spain and other European leftist parties and unions, that adjustment programs launched everywhere in Europe to address the crisis, with a drastic contraction of public spending freezing when no direct reduction in wages and pensions and job insecurity can only foresee more and more unemployment. I recognized only a few weeks ago the IMF itself through its managing director, Dominique Strauss-Kahn. This admitted that they could get a moderadísimo ajustazos growth, but without generating employment. The demands of the IMF, World Bank and the European Central Bank, recipes appear as desperate, ineffective and counterproductive, a system whose model enrichment ultraliberal speculative pyramid has come to puncture the bubble generated over the years. Stiglitz insists parallels between Spain and Argentina. The American economist, always critical of the International Monetary Fund (IMF), World Bank (WB) and its recipes and "the markets", says Rodriguez Zapatero "will impose anachronistic rules of the game.
For example, lower costs, which will lead to unemployment well above the current 20.3% contraction in real demand and strong social resistance. Argentina lived the same in 2000-2001 and countercyclical policies only took her out of trouble in the coming years. " Strauss-Kahn recently welcomed Rodríguez Zapatero to implement strictly the measures suggested by the IMF, ensuring you will not regret adopting them, despite the harsh social cost involved. And when would that fruit, according to the IMF? In the week ends, the IMF announced that the Gross Domestic Product (GDP) of Canada, Russia and India than this year for the first time in Spain. Thus Spain, who boasted of being the world's eighth largest economy, has been relegated to a stroke at 12 th position. President English will not like someone to remember now that in 2007 he publicly predicted that "In 2010 we will slightly exceed Germany in per capita income." Germany is now in 4 th place, eight places before Spain. The IMF forecasts that Spain will have a growth of -0.3% in 2010 (1.7% average for Europe), 0.7% in 2011 and reached only 2% (percentage at which it is considered that actually creates jobs) 2013. According to the report of the IMF, Argentina will grow 7.5% in 2010, as Brazil (5.7% average for Latin America and the Caribbean) and 4% in 2011. Rodríguez Zapatero will therefore sell less promising future for workers and unions, which last 29 took to the streets to say "no" to his recently passed labor reforms and to warn they will not accept nor its pension reform, which will shortly to debate in the Cortes (Parliament).
days ago, Zapatero also suffered a political setback after being defeated in internal elections of the ruling English Socialist Workers Party (PSOE) by a narrow margin, his nominee to chair the powerful Community of Madrid (governorate), the current Minister for Health and Social Policy, Trinidad Jimenez, Secretary front general of the Socialists in Madrid, Tomas Gomez. That setback, according to polls conducted by various media, has further weakened the PSOE, who appears now located more than ten points behind the conservative opposition Popular Party in voting intentions.
He said a few months ago the great guru of global finances, the New Keynesian Economics Nobel Prize 2008, Paul Krugman, and now repeats it another influential guru, also American and also Keynesian Economics Nobel Prize (2001), Joseph Stiglitz: "Spain could be entering the kind of death spiral that afflicted Argentina just a decade ago." are thus two major international financial analysts who see the shadow of the yard plan on Spain. "Only when Argentina ended its fixed exchange rate against the dollar began to rise and reduced the deficit. Spain has been attacked by speculators, but it could be just a matter of time, "said Stiglitz.
But that turned out to which at the time Argentina is not valid for Spain, membership in the eurozone, with no possibility to devalue its currency, because the old peseta was merged in 1998 with the currencies of 16 other European Union countries to create the euro as common. Both Stiglitz and Krugman and other top analysts see Spain as one of the weakest links in the European Union and reject the image you want to give the EU that has already left behind the recession is. It is feared that effect occurs called W, or recession in the second round. In an article in the Sunday Telegraph, Stiglitz argued days ago, when analyzing the situation in Europe before the crisis, that "Spain is the most dangerous, but also in severe Ireland and Greece trouble. " And Stiglitz adds: "The euro is facing its own crisis and may disappear, a victim of its own convertible inward. It is clear that countries have no problems today, as Argentina does, of individual currencies and therefore flexible exchange instruments. "
The economist said that "as in Greece and Ireland, the financial weakness of Spain becomes easy prey for vulture funds and other speculators. The naive reaction of the European Central Bank or the IMF, such as cutting expenses or pensions and raise taxes, only make things worse. " And therein lies the critical leading the two economists, coinciding with the position that have maintained in Spain and other European leftist parties and unions, that adjustment programs launched everywhere in Europe to address the crisis, with a drastic contraction of public spending freezing when no direct reduction in wages and pensions and job insecurity can only foresee more and more unemployment. I recognized only a few weeks ago the IMF itself through its managing director, Dominique Strauss-Kahn. This admitted that they could get a moderadísimo ajustazos growth, but without generating employment. The demands of the IMF, World Bank and the European Central Bank, recipes appear as desperate, ineffective and counterproductive, a system whose model enrichment ultraliberal speculative pyramid has come to puncture the bubble generated over the years. Stiglitz insists parallels between Spain and Argentina. The American economist, always critical of the International Monetary Fund (IMF), World Bank (WB) and its recipes and "the markets", says Rodriguez Zapatero "will impose anachronistic rules of the game.
For example, lower costs, which will lead to unemployment well above the current 20.3% contraction in real demand and strong social resistance. Argentina lived the same in 2000-2001 and countercyclical policies only took her out of trouble in the coming years. " Strauss-Kahn recently welcomed Rodríguez Zapatero to implement strictly the measures suggested by the IMF, ensuring you will not regret adopting them, despite the harsh social cost involved. And when would that fruit, according to the IMF? In the week ends, the IMF announced that the Gross Domestic Product (GDP) of Canada, Russia and India than this year for the first time in Spain. Thus Spain, who boasted of being the world's eighth largest economy, has been relegated to a stroke at 12 th position. President English will not like someone to remember now that in 2007 he publicly predicted that "In 2010 we will slightly exceed Germany in per capita income." Germany is now in 4 th place, eight places before Spain. The IMF forecasts that Spain will have a growth of -0.3% in 2010 (1.7% average for Europe), 0.7% in 2011 and reached only 2% (percentage at which it is considered that actually creates jobs) 2013. According to the report of the IMF, Argentina will grow 7.5% in 2010, as Brazil (5.7% average for Latin America and the Caribbean) and 4% in 2011. Rodríguez Zapatero will therefore sell less promising future for workers and unions, which last 29 took to the streets to say "no" to his recently passed labor reforms and to warn they will not accept nor its pension reform, which will shortly to debate in the Cortes (Parliament).
days ago, Zapatero also suffered a political setback after being defeated in internal elections of the ruling English Socialist Workers Party (PSOE) by a narrow margin, his nominee to chair the powerful Community of Madrid (governorate), the current Minister for Health and Social Policy, Trinidad Jimenez, Secretary front general of the Socialists in Madrid, Tomas Gomez. That setback, according to polls conducted by various media, has further weakened the PSOE, who appears now located more than ten points behind the conservative opposition Popular Party in voting intentions.
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