TOKYO—International Monetary Fund Managing Director Christine Lagarde said Greece should be given an extra two years to meet its budget targets, publicly wading into euro-zone officials' politically sensitive bailout discussions...You see, Spain and the other countries have aging populations, crippling regulatory burdens on business and a population addicted to unsustainable social spending. The best thing to do in cases like this is give them more time to ... to ... to keep digging?
Instead of front-loading the Greek bailout with budget cuts and structural changes, she said "it is sometimes better, given the circumstances...to have a bit more time."
"This is what we advocated for Portugal, it's what we advocated for Spain, and it's what we're advocating for Greece, where I have said repeatedly that an additional two years was necessary for the country to actually face the fiscal consolidation program that is considered," Ms. Lagarde said.
Meanwhile, Standard and Poor's has downgraded Spanish debt to near junk status.
Standard & Poor's Ratings Services cut its rating on Spain and maintained a negative outlook, citing the mounting pressures from the country's economic recession.
The ratings company warned Wednesday that Spain's credit-worthiness might continue to deteriorate as Madrid struggles to close a yawning budget gap...
S&P's downgrade to triple-B-minus from triple-B-plus puts its rating on an equal footing with where Moody's Investors Service rates Spain, just one notch above speculative-grade, or "junk," status.
More time will allow Spain to reach triple-Z status, the Zombie Economy level. Of course, the folks in Catalonia aren't too hip to this whole bankruptcy tune.
Three out of every four Catalans are in favor of holding a poll to decide on independence for Spain’s richest region, according to a survey published Wednesday by the Catalan government’s Center for Opinion Studies...
Pro-independence sentiment has risen in Catalonia in recent months on the back of the economic crisis. According to the survey, 74.1 percent of Catalans want a referendum on independence. Nearly all voters for the region’s main pro-independence parties are in favor — including 83.4 percent of supporters of regional premier Artur Mas’s CiU nationalist bloc, 92 percent of ERC Catalan Republican Left voters and 96.1 percent of leftist-green ICV voters — the survey revealed.
So to review, Spain has an aging population, near-junk bonds, huge unemployment, massive social spending obligations and its wealthiest region wants to secede. The best option here is to give them more time to see what they can do.
I think they can reach Wellington if they really try.
|We can do it if we all pull together!|