Michael Mross (economic analyst) gave an interview with RT, outlining how Spain will soon be the final nail in the euro coffin as they will seek a bailout and use up the rest of the ESFS/ESM funds.
- Private sector overwhelmed with debt.
- Banks are bankrupt.
- Central Bank is bankrupt.
- Government more or less bankrupt.
- Austerity won’t work under these circumstances.
- Spain needs to rollover €500-700bn of debt this year and will be final nail in euro coffin.
- There will be insurrection in Spain and will have to pull out of euro.
- There will not be enough funds to support spain and it this point Germany will pull out of euro.
- Austerity will lead to contraction of the economy.
- Original euro crisis was €10 bn, then €100bn, €500bn, now €1trn and by the end of the year €2-3trn.
On Friday PM Rayjoy announced austerity measures of €27B which falls short of the 34B euro cuts that are needed to reduce the deficit to that 5.3% target agreed with EU. So already Spain is going to miss its targets. Factor in high private debt, extremely high unemployment, increasing widening of bonds gap, exposure to Portugal and the fact the Spanish banks were the beneficiary of LTRO2 does not bode well.
Check out previous post on Spain’s real debt/GDP at 134%.