It's not as if we at Ibex Salad envy the position that Spanish President José Luis Rodríguez Zapatero finds himself in. Who, after all, would want to be forced by circumstances to cut back on infrastructure projects in an economy so overloaded with construction capacity? But to now, after having bitten the bullet to the relief of international investors (even receiving minor kudos from this writer in the process), come out and say that he will be reinstating some of the 10 billion euros thus cut from the budget...The Bank of Spain, with 12-month, 18-month and 5-year issues coming to market in the next three weeks, will certainly not like the look of today's reaction. The Bloomberg chart on the left is of the 10-year.
That Zapatero was able to, with a straight face, characterize this announcement as an unalloyed - either by facts or by offsetting cuts elsewhere - 'noticia positiva' should tell reader exactly how profoundly he is trapped in that 1980's socialist belief that government policy is, by definition, never zero-sum.
Readers not familiar with the matter might try imagining having Pedro Almodóvar leading their country at this moment in history.
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2 Comments:
If I was in his position I'd also be wondering exactly why the government should be listening to a manic-depressive Mr Market.
because the manic depressive Mr Market is the one who gives Spain money...
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