My nephew is seven years and each time her mother punished, not usually understand at first it is your fault and angry. However, gradually becoming aware of their actions and their responsibilities and, therefore, sometimes about-faced mimes and asks: "Is this that you punish me?".
Government Spain is like my nephew, but with the difference that has not yet accepted that the punishment being imposed on us market your fault, and nobody else. We are paying the lack of credibility caused by the constant flirtation measures of our economic policy. The lack of conviction at the time to explain our plan of adjustment, the lack of will to take charge and our labor market flexibility and the neglect and political intervention which is carrying out the re-structuring of our financial system (especially in the field of investment funds). But worse than all this, is the image that is transmitted to disability, lack of discipline and inability to accept economic reality and not remain fixed in a parallel world where recovery seems imminent.
discourse can grab a more anti-capitalist and anti-system and question the professionalism of S & P, one of the rating agencies "that gave the highest credit rating to a financial product such as CDO's that have caused the crisis. However, that speech should not blind us to the implication that is a lowering our risk rating . Doing so is like one who does not accept the theory of gravity and just launching off a cliff, shouting that what I say Newton give a damn.
But what a fall of "rating"? Basically that in order to place our debt, that is, let us get money from abroad is going to get out more expensive. Why?, Because investors are wary of our economy or our ability to fix our problems and instead of the vile money, we ask for more guarantees, ie, we pay a higher interest rate. Would you leave money at the same price to a person with clear ideas, that comprehensively tells how it will solve its economic dilemmas and besides all this, has already begun to take action, against another person who is characterized by just the opposite? Markets either.
This is reflected first in the English bond spread to 10 year high against the German 10-year bond (you know, these Teutons are serious people, applied work, so the market compared us with them), found in the 110 basis points (1.1 percentage points), ie that if the Germans have to pay interest of 3.03% by placing your debt, we have to offer 4.14% to be attractive to investors. And that means that we finance ourselves is more expensive. But how much more or less? Well according to Expansion "gross issues still to be done this year (€ 62,304.19 million) will cost around 3,160 million more (During the entire life of the debt), compared to what would have taken place that much last year. "This means more pressure to control the runaway deficit that we suffer, further vitiating the vicious circle, which leaves only more spending cuts or increased revenue via more taxes.
But really we are suspicious of foreign investors, or are a group of greedy capitalists wanting more and more money? For the truth is that distrust and much, and also, as good capitalists want more and more money, and do not want to lose a penny. So hire a CDS (Credit Default Swap or English castizo, credit default swap) is more expensive. What the heck is a CDS? It is an insurance contract guaranteeing the purchaser, in this case English debt, if the Kingdom of Spain does not meet its obligations, the buyer will not lose your investment. This financial instrument measures whether people are wary of Spain, because as any of us if we do not trust a seller, how to seek a waiver to protect you. And the English CDS market not to rise, as more and more people think there is a risk on yet, but this, that the Treasury HACA crack.
Does this only the state? No, of course not, also directly affects corporate bonds issued to finance our businesses. As the Treasury should offer more attractive returns for investors, our companies should also provide, because of this fall's rating higher interest rates for someone to buy their debt. This coupled with the severe lack of liquidity that are living our business, due to tap funding cut of our financial system, may cause a worsening of the crisis, as the investment plans, ie, new projects should put in place, ie to grow the business profits and therefore, create jobs, stop.
Do you think now the situation serious? I think that should not be taken lightly, as much as you do not fully trust these rating agencies. Unfortunately our government, like my nephew, take the path of the tantrum and anger rather than act accordingly. kicking Ms. Fernández de la Vega and Mr. Salgado , while both our Prime Minister is still trying to convince us that the situation has reached its most catastrophic and whatever comes will improve once again.
is true that we are far from the situation in Greece, but that did not prevent the ears do not wolf before he bites us. We are warning you, certainly not worth the tears.
