Spain in the eye of the storm: the Iberian country risks being the fourth in the eurozone (after Ireland, Portugal and Greece) to need aid. The chief economist of the American banking giant Citi, Willem Buiter, raised the alarms again. In an analysis note, he questioned the achievement of the objectives of fiscal consolidation just reaffirmed by Madrid. And indirectly the economist goes so far as to evoke the risk of a restructuring of the Spanish debt: “It can be avoided – says Buiter – but it would require radical measures in terms of recovery and reforms”.
And if the Spanish conservative Executive "has been active in terms of structural reforms - Buiter went on - it has instead missed the opportunity to decisively address the issue of budgetary austerity in the first 100 days of operation“. As for the data, if the Spanish government expects a 1,7% GDP recession this year, according to Citi it will be 2,7% instead. “It is unlikely that the promised deficit targets will be achieved, at 5,3% of GDP in 2012 and 3% in 2013”.
"Spain will probably have to enter a troika-like program this year, as a condition for obtaining greater support from the ECB for government bonds or its banking groups”, stated the Citi analyst again. The troika are the technicians of the EU, the ECB and the IMF who supervise the aid programs launched in Greece, Ireland and Portugal. Yesterday and again today it was instead the European Commission that threw water on the fire of alarmism about Spain, denying press speculation about the country's requests for aid. Meanwhile, Spanish bonds remain in the spotlight, the yields of ten-year Bonos mark a filing in the afternoon, to 5,33% and their spread with respect to the Bund drops slightly to 345 basis points. The Madrid Stock Exchange is down 0,10%.
