SPAIN CANNOT WAIT THAT HE GETS READY THE BEWILDERMENT OF THE ECONOMY OF THE U.E.

Spain continues entangled in a debt net and deficit in that I fear myself that the "'default' it will be its only exit. Although the sovereign debt is not excessive, the problem is that this bolting in the last months, it is evident although they don't declare it that the tremendous contention of the deficit won't have another form of getting it that changing deficit for debt. If the government persists in the agreed politicians, it will finish where Greece, Portugal and Ireland, that is to say, under an umbrella of a rescue. This is the most probable scenario for Spain.  

The optimism and the indulgence have returned to the markets and the political ones and it is already said that the worst thing has already happened. However, the situation of the debt of Greece is as untenable as always, it is also it that of Portugal, it is also it that of the bank sector of the European Union and it is also it that of Spain. Because as well as the other debts, they can be protected and contained by the indebted countries, and the rescues on the part of the monetary and economic authorities of the UE, Spain doesn't have possibilities to go at the same time to the correction of its two imbalances, its budgetary deficit and the increment of its debt. 

The contention of the deficit, in the global situation of recession, makes it almost impossible because in these moments Spain won't be able to improve its fiscal revenues unless he leaves to its society, orphan of all sanitary, educational service, and of subsidies. The Spanish government's great decision is in this dilemma:  or to finish with the real deficit, caused now basically by the expenses of sanity education and mainly subsidies, helps to the banking and the private credits, and to fall in a recession and later estanflación of which won't be able to leave until in 10 or 15 years; or to rush to a reactivation of the productive economy and the stabilization of the I number of population in the appropriate terms to their possibilities of GDP, with the help of getting in debt to get liquidity to invest, and industrial projects and infrastructures that start again to the country to start up. 

The economic imbalance is no longer for the excesses of social and political waste of the era PSOE, the budgetary deficit is now almost for reasons face impossible to give up to maintain a slight social peace, the political administration,  of the public sanity, of the public education, and mainly the subsidies, as much that of unemployment as that of jubilation, the activity fall has brought I get the total imbalance between the ratio revenues and expenses, to maintain 22 unemployment% in which 45% is also already of long duration, more the jubilation subsidies, and you help to palliate the cases of social exclusion that take place for ousters to complete families that nobody already has an employment, they are in assumable for an economy in recession.   

In Spain most of the toxic debt is also in the private sector. The level of indebtedness of the private sector, that is to say, the homes and the non financial societies, it was 227,3% of the GDP at the end of 2010, according to Eurostat. The data of the last year have not been published still, but the level will only lower a little. One of the areas where the adjustment is taking place but it is not clear up to where it should arrive it is in the market of the housing.  

The general index of prices of the housing of the INE fell 11,2% last year the, but 21,7% only descended from the pick in the third trimester of 2007. It is necessary to remember that the Spanish bubble was much bigger that other, but the prices have only lowered in around 20%, because the main banking worthy of the debt caused by the bubble, doesn't want or he is not able to, to give many lost and it is lengthening the situation logically awaiting some exit that doesn't arrive that to reactivate the economy and with it brakes it the losses that are reflected inexorably in the balances, every time that the assets are depreciated. 

According to some specialists, the adjustment of prices of the housing in Spain is still to less than half of being completed. The analysts explain that in real terms the real estate peak of USA has been annulled almost completely, and the graphics of historical bubbles show similar behaviors. For it, "in Spain, like in other parts, it would be reasonable to suppose that the real prices will fall with the time to what they were to half-filled and final of the 90, if this is this way, the banks still have left many losses that to dry. And while this won't have this way private credit to lift the productive economy and of consumption in Spain. 

How he will recover the Spanish economy if the private sector and the public sector seek you give to be lever up at the same time, the process of give to lever up of the public sector will be vicious the more he/she wants to be corrected stronger it will be the deceleration of the economy of the country. The deficit was last year of 8,5% of the GDP the it was an enormous excess, but the reason was not the fiscal indiscipline. It was necessary to avoid a bigger fall. The recently revised objective is of 5,3% for this year and 3% next year. So the total adjustment of the public sector that is necessary by virtue of the rules on the deficit of Europe is an incredible 5,5% in two years, this in a country amid a recession and without industrial fabric to reactivate, it is little but that to take to the society to the misery but real and shameful of the Europe of the Euro.  

If we notice the grade of total leverage that is for before, as much in the public sector as in the private one, the question is not if the Spanish economy bounces in 2012 or 2013, but if one can really give a rebound before the end of this decade, for Spain, the correct adjustment politics would be a program for it took to the private sector to reduce its leverage, in three years, with the support of a public deficit consistently high, and, that yes, accompanied by all the necessary economic reformations to undertake the take off.  

But to get this they should change the guidelines of iron of the UE. Spain should fix a problem first and then the other one, and the first one is evident that it should be the reactivation of the contribution of revenues by means of the taxes to the production, and of the private consumption, a form of trying to balance these serious two factors to negotiate up to where Spain can get in debt, and on this base to use the debt like regulator of the deficit of the state that without a doubt some will be caused by the fall of tributary revenues and the increase of grants, don't doubt it. 

The moment to approach the deficit of the public sector would be after the give to lever up of the private sector has been completed. If one doesn't make for order Spain it will continue blocked in a debt trap and deficit, of the one which the 'default' it will be the only escape road. If it pursues the agreed politicians, it will finish where Greece, Portugal and Ireland, that is to say, under a rescue umbrella. This is the most probable scenario for Spain I hoped De Guindos prepares some spectacular exit to this dilemma but I see that or he/she doesn't have any ace in the sleeve, but there is not a lot of time to be thought it because this catastrophic situation will be seen in the next second semester of this year. And this without knowing the budget of the Spanish state for 2012.