Nouriel Roubini: España también deberá ser rescatada

Genevieve Signoret & Patrick Signoret

Un rescate del sector bancario español será inevitable, dice Roubini en FT. Dado que para ellos no se utilizarán fondos europeos, sino que será pagado por el propio estado español, el costo de este rescate pesará sobre su nivel de deuda externa, que se volverá insostenible. La austeridad empeoraría el problema, y la solución de depreciar abruptamente el euro para crecer con exportaciones es improbable.

No one can pretend to know whether Spain is illiquid or insolvent without gauging the size of the black hole that is the country’s banking sector. The Spanish government is finally starting to do this: Bankia and other banks are reportedly set to receive a capital injection from Madrid.

…The sector will require €100-250bn in recapitalisation later this year to maintain a 9 per cent core tier one capital ratio, the minimum stipulated by the European Banking Authority.

…Ideally, a bailout for Spanish banks should come immediately and in the form of direct capital injections from the EU bailout funds. Germany remains staunchly opposed to this… Such an option is also resisted by the Spanish authorities as the EU taxpayer will effectively take over their banks.

Instead it looks like a bailout for Spanish banks has been postponed until the very last minute. The cost of a bank bailout would then be foisted on to the Spanish sovereign’s balance sheet.

Bank bailouts on this scale may well bring the Spanish state to its knees. If they don’t, Spain’s public and external debt positions will.

In order to put itself on a path towards external debt sustainability, Spain would need to see a huge adjustment in its trade balance… in the medium-term, Spain can only service its foreign debt if it finds balanced and sustainable growth, which requires a real-terms depreciation that will not occur unless the value of the euro falls sharply.

If things go wrong in Greece, Portugal and Ireland, a second bailout is affordable. But there can only be one roll of the dice for a country as large as Spain.

A bailout package would buy some time for Spain, but time will only help if it is used to generate economic growth… High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article.

…a turnaround in the country’s economic performance would require a significant shift in policy: monetary easing by the ECB, a weaker euro, fiscal stimulus in the core, less front-loaded austerity in the periphery, more international firewalls and debt mutualisation.