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well I think uh it's not because uh most
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of the um measures that the government
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is implementing are procyclical that is
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to say they they
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aggravate uh you know they they
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accelerate the the direction in which
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the economy is going the economy right
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now is going south so it accelerates
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that movement right it's procyclical as
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opposed to anti-cyclical uh but Spain is
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just a microcosm of Europe I mean it's
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just one more instance of uh what is
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going on throughout the Euro Zone and
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again the uh the issue is that uh of
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course the banks are in bad shape
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because something happened uh you know
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to real estate or something happened to
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uh households that are too much into
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debt and they cannot keep up with their
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with their payments uh on their loans
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and uh so the banks uh or many of the
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banks are are in trouble that means that
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there's no credit going to companies
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that also means that companies don't
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have um you know a way of investing and
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creating jobs but also they don't want
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to do it because they don't see the
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demand for their goods there uh internal
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demand of course is depressed uh and
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Export let demand is also depressed
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because at this point in time the global
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economy is not doing well because the
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emerging economies as you know are also
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uh in trouble right and growth is slowly
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uh coming down even in China uh so there
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seems as if there's no way out we can
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talk about the possible solutions but it
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seems as if you know austerity measures
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don't work you mentioned the figure
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about the deficit that is getting bigger
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well you know uh governments in Spain in
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Portugal in Greece in Ireland have been
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announcing new austerity measures at a
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rate of uh you know every two months or
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so right or three months over the last
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uh couple of years and uh you know they
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cut this much right and what happens
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well interest on the debt takes like
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away half of the savings because the
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interest rates uh keep on going up right
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on the uh when they refinance their debt
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and then the other half uh uh of the
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savings uh go into paying the additional
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unemployed people uh that have been
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generated because the economy is not
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growing subsidies have to be paid and
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then on top of that uh tax revenue goes
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down uh because there's not enough
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economic activity right uh there's not
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enough uh uh you know movement in the
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economy that the government can tax
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right so it's a uh you know it's a
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procyclical Dynamic and uh there are
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ways out of it but I don't think
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austerity is the way out of it well no
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government likes to be bailed out right
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so this is the uh the basic thing to to
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keep in mind this is what's going on uh
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the government in Madrid doesn't want to
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be bailed out because that would reduce
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its autonomy uh and of course uh you
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know they will do whatever it takes
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right essentially to avoid a formal
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official bailout not that governments in
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Europe or in the Euro Zone have a lot of
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autonomy anymore uh but a bailout would
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reduce that autonomy especially on the
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fiscal front to nearly zero right so
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they want to avoid that and they're
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trying to see if uh you know uh suddenly
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they see the uh the light at the end of
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the tunnel if there there's some change
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in the global econ iomic or financial
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landscape that may give the country uh
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you know a ray of hope uh but
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unfortunately pretty much all of the
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news are bad right one after another and
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so sooner or later if this Dynamic
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continues um well Spain essentially will
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be like uh Greece and Portugal and
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Ireland before it uh it will be locked
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out of the uh debt markets it won't be
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able to sell as many you know as much
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debt uh instruments as he needs to in
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order to continue financing itself and
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at that point then there will be no
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other uh you know solution than to ask
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uh uh the European Union for a
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bailout well uh people have been uh uh
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people have been saying that a bailout
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might
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occur um you know any time uh
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for probably the last six months or
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eight months in the case of Spain uh so
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I guess um at the rate things are going
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it may not be more than two or three
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more months but again I mean something
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could happen that changes the situation
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uh although I I doubt that something big
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enough right significant enough uh uh
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will occur that will change the basic
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Dynamic right now so it seems as if it's
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a matter of uh a few months now uh as
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opposed to a year or a year and a half
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which was the situation you know um back
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at the beginning of uh of the current
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year
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2012
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