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martes, 7 de agosto de 2012

Economics Perspectives and emotion of the markets (9 min.)

Economics Perspectives and emotion of the markets (9 min.)
Juan B. Lorenzo Membiela

Doctor por la Universidad de Valencia (Spain-EU))

The Agency 'Standard & Poors' maintains the rating of Spain at 'BBB +', by the firm commitment of the country with economic and fiscal adjustment. It supposes a recognition to the containment of the deficit measures agreed in the first 7 months of Government.

Persists, however, the negative Outlook so called 'underlying risks'. Either unemployment, whose rate set in the active population (EPA) survey, July 2012 stands it at 24,63% (INE, 2012). Good for the expected contraction of the gross domestic product (GDP) by the increase in VAT in September. Well, by the fluctuations of the interest of the money, something that is unpredictable. Well, finally, by the fall of the collection in the autonomous communities affecting their sustainability.

The situation is not easy, not unapproachable.

The Government expected a contraction in GDP of 0.5% in 2013 and a growth in GDP of 1.2 per cent in 2014. The International Monetary Fund (IMF) ratifies the increase of GDP in 2014, but adjusting it (Spiegel, 8/2012). This is important because it is the beginning of an economic recovery.

However, the budget deficit Spanish and payment of bonds shall be until 2014 385,000 MLL. € (The Economist 8/2012). In the current year, 2012, Spain is paying the amount of 158,000 mll. loans received €.

These are data that should be communicated so that citizenship can verify compliance and find a justification, at least, to much sacrifice. There is selling management and is not. The image of desolation that communicate «silence» only belongs to the indolent, that is not the case, in view of the changes made in the first 7 months of government mandate.

Forget things as obvious as "emotion" of the markets. How does not prevent speculation financial and lack of trust in Spain, if it doesn't know the timely fulfillment of payment of sovereign debt, bonds, letters, or obligations of the Treasury, the payment of pensions and allowances, among others? The important thing is the payment but even more the effects that that payment results in economic circumstances adverse to the country that has been paid.

Certainty is not transmitted and studies on the crisis of 1929 reflect clearly, the basics that is to transmit solvency and "appearance of solvency" to avoid financial panics.

For the International Monetary Fund (IMF) and his advisor stationed in Spain, Mr. Daniel James, in an interview conducted in 27 July 2012 and published in the Digital newsletter of the IMF, defends trimming the fiscal deficit, the VAT increase, the labor reform and the sanitation of banking as a strategy to boost business productivity.

Declares the Economist of the IMF: "since the beginning of the crisis the temporary employment has declined a third but the standing only 6%.» "To remedy this situation committed to give confidence in procurement companies even if that means that some people work differently, more flexible conditions or earn less".

In the light of these statements, the IMF supports Spain. Amendments to policy on employment, for example, although they not deployed its effectiveness of immediate mode yes do so in the medium term, because of the regulatory flexibility. It is an achievement of all forms, today reached agreements business to accommodating working conditions to the contingencies of the production. This prevents the destruction of more jobs.

Financial pressures on Spain are explained by the IMF as a result of a faulty construction of the euro area and not properly the economic characteristics of Spain.

But you have to be aware of the euro crisis is immersed in another crisis of greater draught at the global level. But without the depth from which we suffer.

A global recession has been found. This phenomenon is verified by the report of the IMF published in July 16, 2012, entitled 'Perspective of the world economy' that modifies the issued in April 2012. Confirms a cooling of the global economic recovery that is produced in the period April-July 2012.

Does a drama request the rescue to the MEDE (mechanism European stability) - IMF - Central Bank if we note the uncertainty that surrounds us makes time and the consequences of a 'default' of the State which we would drag to the edge of the third world economy with its consequences.

The existence of a systemic crisis and an imperative need to change the mode, and how far have been doing things. But that a new man "renovatio" never arises by a willingness to free but required by the circumstances. As Schopenhauer wrote in his work "The world as will and representation": no progress can be expected for humanity, where the same evils are reborn without ceasing.