Cant Install Sound Bank On Reason

Why Spain is not

Yes, I know, the intro is a stereotype. But it is important to understand what kind of crisis facing each of the countries that are flirting with making the euro blown up in his spare time. Let's start with the pathologies of our companions:

1. Greece: governments that take advantage of low interest rates the ECB to borrow to the ears repeatedly. When they arrive at reasonable debt limits, financial engineering used to hide debt and still digging. When they run out of accounting tricks, begin to lie shamelessly. When they get caught lying, they lie even more creative. So until they explode in your face.
2. Ireland banking system out of control is passed three villages with the mother of all bubbles, it is nationalized, destroys public accounts. And no, the Irish welfare state has nothing to do with it - the country's public accounts were in good health before banks jumped into the air.
3. Portugal: are a less psychotic version of Greece. Portugal had a structural deficit in its accounts fairly large, but not totally uncontrolled, their accounts were more or less credible, not Science fiction comic books that had the Greeks.

What is the pathology of Spain? Just as Portugal is the light version Greece, Spain is a less catastrophic disaster Irish. Namely:

1. Our banking system was much better regulated Irish. The English banking has its problems (more later), but not far from the orgy of accounting surrealism had in Ireland. Our
2. savings (that glorious experiment in public banks) they are a considerable accounting disaster. Unlike Ireland, however, the losses of these entities are not born of advanced financial engineering and financial gimmicks foreign losses Ours are the old style: lots of foreclosures.
3. Our housing bubble was worse than the Irish - our economy was much more dependent on the construction sector, and it seems more people have been ahead. The crisis has done much more damage to the real economy in Ireland, a more flexible and diversified economy (even if acting as a tax haven).
4. Our labor market is much worse - in part because our specialization in the brick, en parte por una regulación laboral (y económica en general) realmente espantosa que favorece empleo de calidad más bien patética.
5. Nuestras cuentas públicas a largo plazo tenían peor aspecto que las irlandesas, especialmente la sanidad (muy eficiente en España, pero con costes crecientes según envejece la población) y las pensiones de jubilación. A corto plazo, autonomías y algunas ciudades (Madrid) tienen problemas fiscales graves, pero sin llegar a los niveles griegos.

Esto hace que nuestra crisis tenga dos diferencias importantes:

1. Aunque el sistema financiero tiene sus problemas y puede acabar costándonos un montón de dinero, the damage will be lower than in Ireland. The boxes are really bad, but their losses are limited to brick and a good reform (privatization-cof-cof) can reduce the problem. Banks have many questionable mortgages, but good regulation prevented excesses derived and makes them eat more capacity losses. If one explodes, the price will not be more than the GDP of the country, basically.
2. Our real economy is comparatively much worse: we are much more inflexible, our unemployment rate is much higher and our production model was the Irish carpetovetónico. The problem is not (only) that we too much money, but our economic growth is too anemic to close the hole. Build shacks kicked and not worth it's time to reform the economy from top to bottom. And yes, this includes pension and health - if we keep, we need to make changes.

The equilibiro that Spain has to do is, therefore, quite different from the Irish: financial sector reform is very important, but not as crucial as in Ireland, but revive the real economy (and take serious steps for the long-term structural deficit not eat us alive) on the basis of ambitious reforms is much more urgent. The short-term fiscal adjustment is in our case, less urgent than the long-term structural reforms - but that does not mean we do not have the fiscal discipline to take us seriously.

Now think what the government is taking over seriously ... build trust and tell me if there was or not. If we get into trouble (and if we do not take it to reform in earnest, we'll get in trouble) our rescue will be quite different - and not just too funny.