Spain’s balance sheet recession

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Comments

      • Yup. He also seems to be hinting that the long list of other things that need to happen is likely to be ignored, so Spain will be stuck in the austerity trap.

    • For the average spanish punter, no.

      For the French and German banks that would get wiped out when their loans to the Spanish were redenominated to pesos, YES!

  1. Ummm…am I being naive here, or does the description of the run-up to crisis in Spain given above not fit the Australian economy with an eerie and terrifying exactness?

    • Some of it. There are significant differences – Australia has its own currency and a resources boom in progress. The labour market here is more flexible.

    • PS, note that GDP growth in Spain doesn’t exceed 1.5% at any point on the chart. GDP growth at 1.5% in Australia would be seen as a dismal policy failure.

    • I remember reading somewhere that Spain has as many unsold houses as the US with 1/6 th of the population, or something similar