What Could Go Wrong in the U.S.

[A.W. Bowman]

Financial Times
Europe

Dublin bail-out spooks investors in Spain

By Victor Mallet in Barcelona

Published: November 26 2010 20:18
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Dublin bail-out spooks investors in Spain

It would be easy for investors to assume that Spain – like Greece, Ireland and Portugal, those other fiscal offenders on the fringe of the eurozone – is being punished in the bond markets because its public finances are out of control. Easy, but wrong, according to independent economists, market analysts and senior Spanish officials.

In retrospect, it is true that José Luis Rodríguez Zapatero, the Socialist prime minister, erred in following international fashion at the start of the crisis two years ago. He poured government money into the economy in order to help stave off another Great Depression, just as tax revenues were collapsing.

Add to this unemployment, housing markets going under, banks failing, insurance rate going sky high, major inflation sitting on our door step, and other such inconveniences, what could go wrong?