There has never been any question as to whether or not the austerity programs imposed by Europe’s stronger countries (yes, we’re talking about you
on the weaker countries of Spain,
Portugal and Greece was a
loser, both economically and politically.
The only question was just how much damage the Europeans would do to
themselves before they recognized what they were doing was wrong.
|The Rain in Spain Falls Mainly on the Plain|
The Disruption and Protests Fall Mainly on the Government
Anybody Want to Invest in a Country Undergoing This?
this is illustrated by the growing political problems of the center/right
government which has imposed severe contraction on the economy in an attempt,
largely useless, to satisfy the European creditors and get its budget deficit
reduced. Spain Spain is a very de-centralized
nation, and now some of the larger semi-autonomous areas are starting
to talk about secession, you know, the thing that caused the Civil War in
the U. S.
The pressures facing the government of Prime Minister Mariano Rajoy mounted on several fronts on Tuesday, as thousands of demonstrators besieged Parliament and Spain’s two largest regions took steps that underscored their deepening economic troubles and displeasure with his austerity plans.
The larger local regions are calling for early elections, elections that could be considered a referendum on whether or not to split from
Presenting the biggest domestic political challenge, the leader ofCatalonia,
’s most powerful economic
region, called an early election for Nov. 25 that could turn into an unofficial
referendum on whether to split from the rest of the country. Spain
Catalonia’s demands for more autonomy have been fueled by its own financial problems, which forced the Catalan government last month to request $6.5 billion from an emergency fund of $23.3 billion set up by Mr. Rajoy’s government to help regions meet their debt financing obligations.
Exactly what all this means, or how it will play out is unknown. And that in itself if a problem, financial institutions and economics hates uncertainty.
Economists warned that the call for a
added yet another element of uncertainty for . Spain
“Once comforted in power after elections, the government could then work more constructively towards a redefinition of the relationship between the central government and the regions,” said Gilles Moëc, an economist at Deutsche Bank in
in the meantime, political turmoil in London Spain’s
richest region could generate the kind of market reaction which would precipitate
a request for European support by .” Madrid
Eventually even the blind European policy makers will come to understand what they are doing is wrong. How long is that eventuality? As long as it takes.