Monday, August 29, 2011

No Wonder Spain is in Trouble

To reassure Germany and other investors that Spain will not need a bailout, the ruling Socialists and opposition Popular Party agreed on August 26, 2011, to enact a balanced budget amendment to the Spanish constitution.

The lower house of Parliament will vote on the measure on September 2 with the amendment to receive final approval in July 2012.

This will reassure foreign holders of Spanish bonds, yes?  No!

The amendment will not take effect until 2020.  This gives new meaning to kicking the can down the road.  Moreover, the measure can be suspended by Parliament if there is a natural disaster or economic recession.

Huh?  On these provisions, you cannot fool any of the people any of the time, with perhaps the exception of Spanish government officials fooling themselves.

No comments :