[Plantagenet]

You gotta hope that the people in charge over there can walk whatever tightrope is wisest for their particular situation.

Wouldn't Spain be smarter to climb down and get off the tightrope?

Its time to dissolve the EURO. Its become just a mechanism for Germany to bankrupt and dominate the rest of Europe. If Spain (and Greece and Italy and Portugal) still had their own currencies, they could set exchange rates to act as a barrier to Germany imports, and effectively protect their own internal industries by raising the cost of German imports through exchange rates. They can't do that as long as they stay in Euro, leaving the Germans free access to their markets.

[Quinny]

So what imports would be blocked? What internal industries?

[Plantagenet]

So what imports would be blocked? What internal industries?

You don't understand.

If Spain withdrew from the Euro, it would have its own currency again. Once Spain (or Greece or Italy or Portugal) controlled their own currency, they could set the exchange rate and devalue their own currency if necessary.

By devaluing their own currency, they effectively raise the cost of imports. This doesn't "block" imports----it just makes them more expensive, thereby helping all their own internal industries compete better against foreign competition.

[Quinny]

I understand clearly the point you were trying to put. Do you understand European industry and markets?

I think not!

[dolanbaker]

You gotta hope that the people in charge over there can walk whatever tightrope is wisest for their particular situation.

Wouldn't Spain be smarter to climb down and get off the tightrope?

Its time to dissolve the EURO. Its become just a mechanism for Germany to bankrupt and dominate the rest of Europe. If Spain (and Greece and Italy and Portugal) still had their own currencies, they could set exchange rates to act as a barrier to Germany imports, and effectively protect their own internal industries by raising the cost of German imports through exchange rates. They can't do that as long as they stay in Euro, leaving the Germans free access to their markets.

Germany has used the weaker countries of the Eurozone to keep the value of the DM(mk2) down so they remained competitive outside of Europe.

[Plantagenet]

Hi Quinny:

If Spain withdraws from the Euro and issues its own separate currency, this will not BLOCK imports from Germany or other countries.

However, if any new Spanish currency was devalued relative to the Euro, it would cause imports from Germany and other countries still using the Euro to become relatively MORE EXPENSIVE.


Comprende?

[Quinny]

Hi Planty

As you say - barrier (block) to German imports!!

What you are effectively saying is .... Spain has such a massive manufacturing sector and resources to build exports it would be OK if goods were cheap enough! I think not!!

Your idea is a clear example of the divergence of business/economics from reality that makes our predicament worse.

You gotta hope that the people in charge over there can walk whatever tightrope is wisest for their particular situation.

Wouldn't Spain be smarter to climb down and get off the tightrope?

Its time to dissolve the EURO. Its become just a mechanism for Germany to bankrupt and dominate the rest of Europe. If Spain (and Greece and Italy and Portugal) still had their own currencies, they could set exchange rates to act as a barrier to Germany imports, and effectively protect their own internal industries by raising the cost of German imports through exchange rates. They can't do that as long as they stay in Euro, leaving the Germans free access to their markets.

[Revi]

Spain is a country that has been up and down a lot. They will suffer, but they have suffered before. It's not Spain we should worry about. It's the entire Euro zone, and eventually the US also. No country is an island.

[Plantagenet]

As you say - barrier (block) to German imports!!

Actually, I said barrier to imports---you said block imports.

Economic barriers are defined as: "any regulation or policy that restricts international trade." Trade barriers restrict trade---they don't completely block it---get it now?

What you are effectively saying is .... Spain has such a massive manufacturing sector and resources to build exports it would be OK if goods were cheap enough! I think not!!

I said nothing about the manufacturing sector. Please stop making things up.

Your idea is a clear example of the divergence of business/economics from reality that makes our predicament worse.

What you wrote about blocking trade and the manufacturing sector is 100% your idea---not mine. Re-read my post---I never said any of that.

-----------

Heres what I said:

"Its time to dissolve the EURO. Its become just a mechanism for Germany to bankrupt and dominate the rest of Europe. If Spain (and Greece and Italy and Portugal) still had their own currencies, they could set exchange rates to act as a barrier to Germany imports, and effectively protect their own internal industries by raising the cost of German imports through exchange rates. "

Lets take one example: Spain has a strong wine industry. If Spain withdrew from the Euro, and re-started their own currency at a discount to the Euro, they could sell their wines for less in the EU countries while wines from EU countries denominated in Euros would be more expensive in Spain. This would obviously help the Spanish wine industry be more competitive and successful.

[dolanbaker]

Didn't the Japanese earthquake knock out the factory that made most of the engine management systems, causing the global motor manufacturing to have a seizure for several months.

[dolanbaker]

http://www.bbc.co.uk/news/business-17864647
The ratings agency Standard & Poor's has cut Spain's credit rating and warned of risks to come.

S&P cut Spain two notches to BBB+, warning that the country could have to take on more debt to support its banking sector.

It has also placed Spain on negative outlook, meaning there is a risk of further downgrades to come.

S&P predicts the Spanish economy will shrink by 1.5% this year, having previously forecast 0.3% growth.

In 2013 it expects the economy to contract 0.5%, having previously predicted 1% growth.

The growth in the lack of growth is growing!

[eXpat]

Spain’s pain becomes Europe’s big fear

Greece no longer holds the dubious honour of being centre stage in the eurozone crisis. In the event of its exit from the euro, the country would be a mere support act. It’s Spain that would be the headliner, investors now fear.

Fears about contagion from Greece have pushed Madrid’s stock market to 2003 levels and its premium to borrow over Germany to euro-era records. Long-held worries about the health of Spanish banks have given rise to concern about the chance of bank runs, the worst nightmare of policy makers and investors alike.

“The big risk in Europe now is Spain,” says Stephane Deo, European economist at UBS. He says he is fielding many questions from investors about the state of the banks: “My main worry is the potential for a bank run.”

The latest, and potentially most serious, stage of the eurozone crisis started two weekends ago when Greek voters failed to give any party a strong enough mandate to govern. Suddenly a “Grexit”, as many in the markets are calling Athens’ potential departure from the single currency, was on the cards.

But as this week drew on, worries shifted from what Greece could do to itself to what it might do to others. Spanish, Italian, Russian and Brazilian equities have all entered bear markets, down more than 20 per cent. The FTSE 100 in the UK is in correction territory, off more than 10 per cent. Eurozone bank shares are now lower than they were in the aftermath of Lehman’s collapse in 2008 and early 2009.

http://www.ft.com/intl/cms/s/0/491b710e-a106-11e1-aac1-00144feabdc0.html?ftcamp=published_links%2Frss%2Fhome_uk%2Ffeed%2F%2Fproduct#axzz1ux5f0xo0
A bitter fingerpointing is going on in Spain, about who is to blame for what
(sources in spanish)
http://www.publico.es/espana/432870/los-barones-del-psoe-culpan-al-pp-de-la-crisis-de-bankia
http://www.publico.es/dinero/433459/bankia-se-desploma-arrastra-a-la-bolsa-a-su-minimo-en-nueve-anos-y-la-prima-cierra-en-su-maximo
http://www.publico.es/dinero/433476/el-gobierno-niega-una-fuga-de-depositos-de-bankia

[eXpat]

Spain bank losses could hit 260 bn euros

Spanish bank loan losses could hit 260 billion euros ($A339.05 billion), with the industry likely to need some 60 billion euros ($A78.24 billion) in outside help to stay afloat, the International Institute of Finance (IIF) says.

Taking guidelines from how badly Ireland's banks were hit in its financial crisis, economists at the global banking institute said they expect the losses to be in the range of 216-260 billion euros.

"A number of factors suggest that the losses could be nearer the upper end of this range. Spain's macroeconomic prospects are worse than those faced by Ireland, especially as regards growth and unemployment," they said in a new review of the global economy.

"The bulk of the losses would be generated by the commercial real estate loan portfolio, which is concentrated in the cajas," the Spanish savings and loan banks, it said.

The IIF is an association of around 450 banks around the world and has been closely involved in the eurozone crisis, leading the negotiations for a write-down of Greece's private-sector debt in March.

The IIF said the banks were able through the end of last year to find enough capital internally to put aside 110 billion euros for loan loss reserves, and some will be able to keep generating capital internally to meet needs. But not all of them.

"Substantial divergences between individual banks suggest that government assistance will be needed for a significant number of banks, mainly the cajas," the IIF said.

In the worst case, the IIF said the shortfall that would fall on the government would be about 50-60 billion euros.

http://news.ninemsn.com.au/article.aspx?id=8471287

[mattduke]

The bank runs are accelerating. The writing is on the wall. Account freezes are looming. Those with foresight are leaving before the government and bankers steal what's left.

http://www.cnbc.com/id/48889555

[kildred590]

If Spain left the Euro (which AFAIK no one is suggesting in Europe), the entire European banking system would collapse. So that isn't an option.

Spain does have a large manufacturing base in fact, bu they don't need to import from Germany, what about China ?

[dolanbaker]

If Spain left the Euro (which AFAIK no one is suggesting in Europe), the entire European banking system would collapse. So that isn't an option.

Spain does have a large manufacturing base in fact, bu they don't need to import from Germany, what about China ?

Spain won't leave the Euro, the Euro will leave Spain, in other words the Eurozone will revert to existing currencies!

[dolanbaker]

Catalonia referendum turns violent as Spanish police try to stop the voting with force.
Just about the best way to turn the local population into separatists.

http://www.bbc.com/news/world-europe-41457238
Catalonia's independence referendum has descended into chaos, with clashes occurring as police attempt to prevent the vote from taking place.

The Spanish government has pledged to stop a poll that was declared illegal by the country's constitutional court.

Police officers are preventing people from voting, and seizing ballot papers and boxes at polling stations.

In the regional capital Barcelona, police used batons and fired rubber bullets during pro-referendum protests.

Catalan emergency services said they had treated 38 people who were injured when police pushed back crowds of voters and forced their way into polling stations.

The Spanish interior ministry said 11 police officers had been injured.

Catalan leader Carles Puigdemont condemned the action of the national police and Guardia Civil, who were sent into Catalonia in large numbers to prevent the vote from taking place.

"The unjustified use of violence... by the Spanish state will not stop the will of the Catalan people," he told reporters.

[Cog]

Ahead of the polls opening, the Catalan government said voters could print off their own ballot papers and use any polling station if their designated voting place was shut.

Print your own ballots and vote wherever you want? No wonder the Spanish government shut this fraud down.