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News Link • Economy - International

And Now Let Us Gasp In Horror At The Dismal Economic Situation In Spain

•, Matthew Boesler
 Huge protests against austerity measures engulfed Madrid last week as angry voters displayed their discontent in the streets.

Then, on Thursday, Spain revealed more austerity in its 2013 budget, which will likely have to be modified to include deeper cuts when over-optimistic macroeconomic growth assumptions don't materialize.

On Friday, Spain announced a 60 billion euro capital shortfall across its national banking system, but the macroeconomic assumptions used in that test are likely too optimistic as well. On top of that, more bank capital will continue to be destroyed as the Spanish housing bubble continues to deflate.

SocGen strategist Kit Juckes wrote that "all the ECB’s money won’t make recession go away and until a growth strategy is implemented by Europe’s politicians, this crisis can’t be brought to a satisfactory end."

And right now there is no growth in Spain.

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