Seven differences between Greece and Spain, published in Expansion
| Date: February 11, 2010 | Source: Sources |
| Category: REFLECTIONS | |
Go ahead and rate this post 
Loading ... Yesterday was published in Expansion this article that we found important enough to echo, and in Spain the thing looks ugly, but not Greece ::
In recent weeks there have been many comparisons between the situation of the Spanish economy and the Greek. Economic gurus Nouriel Roubini and Paul Krugman , Joaquin Almunia stated recently as Commissioner of Economic Affairs and the Financial Times , among others, have put both countries in the same bag. But the main economic magnitudes can draw a conclusion: they are not comparable.
True, both states have a large deficit (in the case of Greece 12.7% of GDP in 2009 and in Spain by 11.7% over the same period). This ingredient makes these two economies are now dependent on international funding, but that does not mean their problems and challenges are the same. Now that the European Commission is about to approve the rescue of Greece, is the time to explain the differences between our economy and helena.
1. DEFICIT
The public deficit problem in Greece is not new. According to Jose Luis Martinez Campuzano, a strategist at Citi in Spain, "it is a structural burden the Greek economy has been dragging in the last decade. Since 2000 has maintained an average above 5%. However, in Spain is more cyclical and therefore more manageable. " Remember that Spain met the requirements of the Stability Plan and has even recorded surpluses in the last ten years.
2. DEBT
First, Greek debt doubles the Spanish (113% of GDP from l to 55.2%, respectively). But is that also "the volume of debt in Greece has exceeded the average in the last ten years, 100% of GDP," says Martinez Campuzano. And this is reflected in the markets. The Spanish bond differential with Germany ten years (the reference in Europe) exceeded last week, at its worst, the 100 basis points, while the Greek reached 296 points. Last critical moment, this week both spreads have fallen to 80 and 271 basis points, respectively. Furthermore, the different perception of the markets between a debt and other is also evident in the credit default swaps (CDS) or insurance against the risk of default. According to Citi, the Greek CDS triple the Spanish (the cost of insuring Greek debt stands at 417 basis points to 130 points in Spain). Moody's today said that "Spain's triple A is the strongest of the three" (in reference to Greece, Spain and Portugal). In addition to Juan Ignacio Crespo, director of Thomson Reuters, "the great Greek debt problem is that between April and May due almost half of its outstanding debt. Not planned financial calendar and that is a fundamental error" .
3. ACCESS TO FINANCE
For Martinez Campuzano, "Greece can have a problem accessing finance because markets do not want to buy its debt, but in Spain only a matter of price."
4. UNEMPLOYMENT
It is true that at this point the Spanish economy goes wrong stop on the Helena. Here the unemployment rate exceed 18% in 2009, while in Greece it is only 9%. However, experts do not consider that this represents a major problem for financial markets. "They care less or a more indirect way. They are affected in that it can be a pressure on public spending, institutional instability and a possible breach of the austerity plan. But it is an indirect component, in the end the concern is solvency, "said Jose Antonio Alonso director of the Instituto Complutense de Estudios Internacionales. Although there is no unanimity here. The Financial Times editorializes today about Spain and says the government should worry less about the deficit and unemployment .
5. SIZE
This section is worth recalling the words of the chairman of Santander, Emilio Botin , last week, "comparing Spain and Greece is like comparing Real Madrid to Alcoyano." In fact, Spanish GDP is four times the Greek. This has a double face. "As a larger economy problems can also have consequences far more expensive. This explains why the markets look so intently what happens in Spain," says Alonso. However, at the same time, "this dimension makes it a much stronger economy and a more stable political situation," he adds.
6. CREDIBILITY OF STATISTICS
"No one questions the Spanish statistics, while Europe does not believe the Greek," says Martinez Campuzano. In fact, Brussels has opened a new infringement procedure against the government in Athens on the grounds that "has not fulfilled its obligations to collect and send to the European Commission statistics are accurate." Remember that after coming to power, the Socialists reviewed last October's forecast deficit for 2009 from 3.7% of GDP was estimated at 12,5% spring (finally seems to be 12 , 7%). This triggered the fear of bankruptcy in the markets.
7. Austerity Plan
Furthermore, "the Spanish adjustment plan gives more confidence because it is much more detailed than the Greek," said Alonso. In addition, the credit rating agency Moody's has described as "credible" austerity plan set by the Government . At the same time, said that the rating of Greece can be cut from the current A3 to Baa1. In this sense, today pronounced the Financial Times in an editorial, in which he called the Spanish austerity plan as "serious" .
February 15, 2010 at 13:18
I find very interesting the comparison
because of this I recommend the blog "the market" http://www.themarket.tk where there is an article that also addresses these differences.
Kind Health
Pink