Luis Doncel reports that Eurogroup President Jean-Claude Juncker insists that any new aid to Spain be accompanied by yet more austerity demands. (El Eurogrupo impondrá recortes “muy duros” a España para reducir el déficit El País 18.09.2012)
Spain's conservative government is currently resisting any new austerity conditions that might come with a new dose of aid to Spain to avoid defaulting on its sovereign debt. The drama is that its generally expected that Spain will have to ask for a new round of aid. Prim Minister Mariano Rajoy's government has already enacted severe austerity measures, which are having the predictable effect of shrinking Spain economy.
In a sign of how caught the eurozone is in the disaster than German Chancellor Angela Merkel's policies are, Juncker in the same interview insisted that Greece had to stay in the eurozone. (El Eurogrupo avisa que impondrá a España medidas "muy duras" con el rescate Público 18.09.2012)
And the austerity train rolls on.
Tags: angela merkel, austerity economics, eu, euro, european union, greece, spain