The hypothesis of the government’s irresponsible indebtedness being the source of Spain’s problems is unsustainable. Cuts in education and health are sorting out Spain’s problems as effectively as chemotherapy is to indirect hernia.
Today Spanish banks depend almost entirely on the vital support of the European Central Bank as they no longer receive money from international investors. The financial markets are also keeping a close eye on the Spanish government: the risk premium is above 400 points compared to German bonds and the interest from the bonds has increased to 6% above the critical threshold. Many observers believe that Spain is no longer capable of confronting this situation without specific support from European funds.
How did it get to this point? The responsibility lies with European leaders and the two main Spanish political parties whose policies have not only failed to slow down Spain's debt but also created more doubt as regards the strength of Spanish fiscal policy.
Read the complete article Green European Journal here...