SPAIN: ONE CANNOT WALK ALONE WITH THE REDUCTION OF THE DEFICIT

The politics of reduction of the deficit in Spain is demonstrated that it still puts in danger the economy more than the own maintenance of the deficit, diverse reasons exist to think that the fiscal adjustment in Spain will be an entire economic and political social disaster. In fact, the experts indicate that although the Spanish government and the minister of Finances of the area euro have softened a new fiscal objective, the implementation of this adjustment, worsens the perspectives about the economy of Spain during next years. 

That is to say, the new objective of fiscal deficit that will decrease until 5,3% this year and until 3% next year they could be difficult to reach and even more to break down the macroeconomic context of our country. I am not alone me the one that almost writes them every day on him bad that we are making the things who he says this way so pessimistic. From Bank of America, Merrill Lynch, determines several reasons that they demonstrate that the fiscal adjustment will be an important challenge difficult to get. "In the first place, the GDP will probably contract in a drastic way, what will imply, naturally, the amplification of the deficit."  

The jab of the real estate bubble, next to the increase of the economic crisis, he is leaving an important hole in the bills of the financial entities. According to the last data of the Bank of Spain, the delinquency rate rose last month of January to 7,91%, the highest bench mark from November of 1994. It is the tenth serial ascent of this indicator, a fact that the experts don't discard that he takes place in next month’s again, although they tinge that everything will depend of if the economy gives some recovery sign.  

At the moment, the forecasts are not very flattering and they go from a fall of the GDP of 1% that omens the European Commission until a descent of 1,7% that predicts the International Monetary Fund for this year. To he sinks it a rate of unemployment of 22,85% and expectations that this can arrive until 24%.   

The main ballast for our economy apart from the budgetary deficit is the private debt that maintains in vile to the banks and he closes the faucet of credits and financings, with what there is not reactivation form, neither way of obtaining more revenues coming from tributes and managerial taxes and of all type. They are the loans granted to promoters and companies manufacturers whose volume ascended last year at the end of to 396.772 million Eurus. And of this figure 20,1% has already entered in Moorish: 79.759 million Eurus. This supposes near 57% of the total of unpaid loans whose value was located in January in 140.027 millions.   

The last data, also, reflect very to the white that the faucet of the credit continues closed, with a fall of 0,72% in the last month. The stop has affected mainly to the financing to the companies related with the construction whose volume is located in minima of the last years. In fact, the credit to real estate promoters was calculated at the end of December in 298.267 million Eurus, the lowest quantity from 2006, while the loans to manufacturers rose to 98.505 million Eurus, minimum from 2004. Another of the affected segments is the loans to the consumption whose volume has gone down to levels of 2003 with 37.686 millions. 

Also the secretary of the Treasure of United States, Timothy Geithner, it has pointed out that the causes of the crisis in Spain were not motivated alone for the fiscal waste, but for the loss of competitiveness and the high level of indebtedness of the private sector. In a testimony before the Camera of Representatives, Geithner has pointed out that in the cases of Ireland and Spain, the crisis happened for the high debt of the private sector and the loss of managerial competitiveness with regard to Germany. In the area euro there was a great increase of the loans deprived in the bank system and the debt in hands of the private sector. When the crisis hit and the trust you erosion, its fiscal position deteriorated quickly. 

The analyses coincide for all the sides, it is not the deficit the main cause of our wrongs but in these moments unfortunately, it is the easiest thing of attacking, to clip is simple always, and the measures taken by the government from Spain are imposed by the UE to calm the spirits, so that it seems that one makes something, but the truth is that not alone they won't be effective, but rather they will be totally counteractive because they will reduce the activity and the revenues of the state and these deficits they will be supplemented with debt. 

Also the more and more deteriorated unemployment index, it will produce a constant increase of a subsidized society, this put an end to all possibility of private saving and next to the nonexistence of industry manufacturer and the total death of the real estate one, Spain won't be able to neither palliate the great problem that we are hidden the debt of the private sector, this panorama it is the one that have to get ready the Secretary of Economy and the Government's President, and this arrangement doesn't only go by the cuttings of the Ministries of Treasury.