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Economy
In reply to the discussion: Weekend Economists Batten Down the Hatches October 26-28, 2012 [View all]xchrom
(108,903 posts)62. Six burning questions for Spain
http://www.bbc.co.uk/news/business-19711689
Things are happening in Spain.
On Thursday, the government unveiled a draconian budget - its latest attempt to get its borrowing under control.
And on Friday, independent auditors confirmed that the country's banks would need an extra 59bn euros ($76bn; £47bn) - most of it from the government - to prop them up.
And then there's one other big event that many suspect is drawing closer - Spain's government is under pressure to request a formal bailout, not just for its banks, but also for itself.
Here, then, are the six big questions that are likely to be playing on Prime Minister Mariano Rajoy's mind:
Can the government cut its borrowing?
Some economists would say this is a wrong-headed question.
Spain is stuck in an economic trap, they argue, with large debts, an overvalued currency and collapsing property market, and it is entirely right for the government to borrow and spend unprecedented amounts to prop the economy up.
Things are happening in Spain.
On Thursday, the government unveiled a draconian budget - its latest attempt to get its borrowing under control.
And on Friday, independent auditors confirmed that the country's banks would need an extra 59bn euros ($76bn; £47bn) - most of it from the government - to prop them up.
And then there's one other big event that many suspect is drawing closer - Spain's government is under pressure to request a formal bailout, not just for its banks, but also for itself.
Here, then, are the six big questions that are likely to be playing on Prime Minister Mariano Rajoy's mind:
Can the government cut its borrowing?
Some economists would say this is a wrong-headed question.
Spain is stuck in an economic trap, they argue, with large debts, an overvalued currency and collapsing property market, and it is entirely right for the government to borrow and spend unprecedented amounts to prop the economy up.
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