The Government of 28-A will have to place 800,000 million public debt in the markets
In the week in which Pedro Sánchez has brought out the worst of himself -to strengthen state institutions including RTVE in order to win- the public debt of Spain has marked a new
In the week in which Pedro Sánchez has brought out the worst of himself -to reinforce state institutions including RTVE in order to win- Spain's public debt has set a new record. It now reaches 1.18 trillion after growing in the last month at a rate of 15 million per hour, according to the chilling data from the Bank of Spain. .
It is thus riding towards 1.2 trillion euros, 150 billion more than in 2014 when the crisis began. The debt decreases with respect to the Gross Domestic Product due to the growth of these years, but in absolute numbers it does not stop growing. It is still close to 100% of the GDP, which requires issuing and refinancing each year about 200,000 million, because there is no margin to return the money.
This ballast will continue in the next years above 90%, according to the Independent Authority for Fiscal Responsibility. Therefore, the government that leaves the polls should generate sufficient confidence to sell to investors at low interest Treasury bonds worth 800,000 million over the next term, if it lasts the four years planned. And that's not counting the private debt of banks and companies that need Spain to inspire confidence to place it.
The European Central Bank has bought up to now 25% of the State's debt and, although it accepts to refinance it -with future rates on the rise-, it refuses to acquire more. The support of the ECB has allowed Spain to extend the average duration of its debt to 7 years with an average cost of 2.37%, but the mountain is such that it will require 30 million dollars to be allocated! every year in the medium term only to pay interest to, among others, US banks, Chinese funds, European insurers or Japanese investors. These investors are not forcing a rise in the risk premium, because they bet that no government will dare to change economic policy worse after the 28-A is said what is said in the rallies.
The president of the ECB, Mario Draghi , rightly recalled on January 29 in the European Parliament that "a country with too high a debt loses sovereignty".
The biggest investor in sovereign bonds in the world, the Pimco fund has presented a report on Wall Street in which it admits the risk of investing in countries like Spain for a next crisis after the mistakes of the past: "The global economic crisis led to several small European countries on the verge of suspension of payments and many others to the recession and the weakening of their financial sectors. For example, the governments of Greece, Spain, Portugal and Ireland have recorded large public deficits with consequences that are still unknown. " The president of the Instituto de Empresa Familiar y de Gestamp, Francisco J. Riberas , repeats again and again that "Spain is in a worse state today than it was in 2008 to face a future recession". And so much It currently owes 750,000 million more than in 2008, when the ballast did not reach 40% of GDP.
The socialist economic spokesman, Pedro Saura , emphasizes that the government has not caused fear in the markets that were said and that, on the contrary, managed to attract Podemos to Budgets that respected the rules of the euro. But the question is how much the economy would be growing without ads like diesel, with a hard impact on a key sector.
Sanchez knows that, if he wins, he should try to turn to the center so as not to complicate the already difficult slowdown. His resignation to change article 135 of the Constitution and his lukewarmness with the labor reform are signs that he sees risk in the current growth, spurred by two factors nothing durable as public spending and the fall of savings. Among the first tasks of the new Government is also to avoid a fraud of law and a laughingstock with the Budgetary Stability Law of 2012. This establishes that Spain -not laugh- will lower the public debt to 60% in 2020. The stability program that finalize Nadia Calviño and Maria Jesus Montero for its obligatory remission to Brussels foresees to skip the legal limit of debt in more than 300,000 million and is so utopian to pass the bar, that the solution is to lower it with a legal reform and to gain time without facing the subject background.
Meanwhile, in this campaign of the 21st century, no large party has published economic reports of its programs. We can not even -the one that needs it the most- give all the data on how to finance its promises and guarantee the sustainability of the debt and pensions. And in the televised debates? It's going to be no.
According to the criteria of The Trust ProjectKnow more
- European Central Bank
- We can
- Pedro Sánchez
- European Parliament
- Nadia Calviño
- María Jesús Montero
- Mario Draghi
- Bank of Spain
FRESH MONEYSpain, feast of the cartel: hunted 60 plots of 400 companies and half Ibex to raise prices
AnalysisIncertity and less growth
EditorialA disastrous economic management