What is happening in Spain, is madness

Some crazy thoughts,

Spain had a surplus budget Acount little before crisis began.

Spain had a debt much lower than Germany, again, little before crisis began.

Spain was the only country that organized Olympic games at a profit, leaving the city of Barcelona to an advanced level.

Spain presented many success stories like Zara (not all textile business has to moved to china) plus some of the most profitable car factories (seat) according to the announcements of Vw group.


Due to some really ugly decisions of some banks, (mortgage investments in the US market, not to forget), all these losses passed over the shoulders of the Spanish tax payers. These losses were eventually put Spain out of the bond market.

Not to declare default European union decided the following incredible idea:

To accept any bullshit paper from banks as collateral in order the European Central Bank to provide credit of more than 300 bn € with interest rate of 1%.

Spain as nation, will borrow more money through the EFSF with interest rate of 4% which will after “lend” to the banks during the recapitalization process (without even getting common stocks of banks as reward).

To avoid a prompt default of Spain, the following “wise” idea was discovered: banks in Spain, will “lend” the Spain nation with 6% through the lines they secured from ECB (with 1% interest rate).

So, to conclude,

Banks passed all their losses to the Spanish people.

They took billions of money from ECB with 1% which now they lend back to the nation with 6%.

Spain has to stick to its austerity plan, to cut expenses, collect taxes to repay all these loans and losses.

Suppose that most of the above are close to reality, can someone explain in plain English, what the fuck is happening to Spain and Europe?


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: