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Currencies  |  May 31, 2012 13:18:47

As the first drops of Spain area, not Greece! 6 reasons

The steady-European slang expressions after Grexitu (left Greece in the euro area) adds another - Spexit occurring perhaps even earlier than in Greece. Why? You can find at least six compelling reasons.

Euro vs. Spain

For Spain is far more likely that in the case of an escalation of debt crisis leaves euro area. It's too big for him to be saved, is already tired austerity measures dictated from Europe and after the performance of the euro area can take advantage of opportunities in a community - in a large family of Spanish-speaking countries around the world. For Spain it makes no sense to rest on the altar of a common currency such as the victims of Greece.

Despite the upcoming Greek elections (which, incidentally, according to surveys will not be left too "pro-European") fulfills European newspaper headlines rather Spain. With its economy, it is from ten to five. Bond markets do not let the lull, pushing yields over again to 6.5%. As in the case of Greece, acutely threatens the Spanish financial sector run on banks. Bankim 15miliardová rescue is a direct consequence of the real estate bubble, which began before 2007. However, there are serious doubts that the other banks are in better shape.

Tensions in Europe grows, politicians still do not hear that markets
Tensions in Europe grows, politicians still do not hear that markets

Greek central bank warned that the withdrawal of Greece from the euro area meant for the Greeks living standards fall by at least 55% weakening of the new currency (drachmas) and a 65% decline in GDP of 22%. Greek politicians still want to at least one ...

The history of capitalism does not remember the fall in asset prices that would not follow the banking crisis. The Spanish housing bubble burst has been overwhelming, so there is no reason why it should become the exception to this rule.

The situation is serious in Spain: the economy back into recession, a quarter of people without jobs, retail sales up by 10% and lower orders from Brussels still the same as for other countries struggling with debt crises: cuts despite the negative economic developments (leave the economy to decline and unemployment grow as long as wages do not fall to such low levels that reflect the actual productivity and enable competitive production again).

In Greece, the government tried (at least until the election) to meet the requirements of Brussels, as well as in Ireland, Portugal and Italy. Spanish public deficit target not met and the company is growing against the dictates of Brussels resistance. So why is a candidate for Spain leaving the Eurozone number one?

First Too Big to Rescue

When it comes to bankruptcy, the euro area is able to save little Greece, whose economy is worth only 230 billion euros. If this is the will, it can subsidize permanently. Even if the Greeks elected government refusing bailouts, the euro zone some money in order to keep peace in the financial markets offer - pumping 10% of GDP in the Greek economy is "only" 23 billion.

This is not the case in Spain. If the economy collapses, the means of rescue will be missed.

Second Spaniards do not want further cuts

Protests began a year ago in Madrid, then spread to Greece and other European countries. Requirements savings provoked strong reactions opposition. Earth is still waiting a few difficult years, but it seems that it is not ready.

Third Spain, unlike the real economy of Greece

Greeks are afraid of life without the euro area as a devil. In fact, they are not able to produce almost nothing. Spain can be a successful economy with a respected industry and exports to GDP ratio of 26% (ie comparable with the United Kingdom, France or Italy) and outside the euro area.For example, Japanese carmaker Nissan has recently announced are an important new investment.

Spain, the problem was the straitjacket of the single currency, which caused the real estate bubble with disastrous consequences. If the country stand on its own two feet, it may be due to a thriving export industry expect in the future healthy growth.

What you should know about Spain than sit on the bull
What you should know about Spain than sit on the bull

4th Spain has a "European political ambitions"

For many countries, especially EU membership policy. Greeks want to stay part of it, otherwise they would probably come under Turkish influence, for Latvia has a sense of European integration for freedom from Russia, through the Irish euro distance themselves from the British, Germany needs a unified Europe, because they still treat complexes of its Nazi past and wants to be surrounded by the states in which they can easily be exported, and France to help the world gain the respect of the euro because the euro area represents one of its major member countries. Spain no such has no political ambitions, it will be purely rational decisions according to the proportion of revenues and expenses which would have meant leaving.

5th The dual perception of Spain

Spain did not blindly clamp to Europe - has a choice: you may as well integrate into the community expanding Spanish-speaking Latin American countries and find opportunities in the growing Hispanic market in the U.S.. Just as the British and the Spaniards can enjoy luxury to think about the future globally. Why be held back by declining the project when it opens up new opportunities elsewhere?

6th The collapse of the euro is no longer a political taboo

Serious debate on the future of the euro had already begun among European authorities. And that's something to say! Yet they all stubbornly argued that the current form of monetary union MUST be maintained at all costs. Mainstream economists, who consider the euro as the true nature of problems, but rapidly increasing.

The Spanish economy starts to come alive, only to be reintroduced peseta.

You certainly have found many other reasons why Spain should or could be a country that voluntarily part with the euro area first. And it's perfectly logical step!

Although it is not alphabetical order, will be preceded Spexit Grexitu.

Grexit: What will happen after the withdrawal of Greece from the euro area?
Grexit: What will happen after the withdrawal of Greece from the euro area?

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