Spain Is the New Greece

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More like supra-national interests. All but two of the EU bloc’s 27 leaders (Britain and the Czech Republic were the holdouts) signed on to the latest fiscal compact, aka the “Treaty on Stability Coordination and Governance in the Economic and Monetary Union,” which requires member states to enact a “Balanced Budget Rule into national legal systems  through binding and permanent provisions, preferably constitutional… subject to the jurisdiction of the Court of Justice of the European Union.” Furthermore, any nation found to be in breach of budget targets can be subject to “a lump sum or a penalty payment appropriate in the circumstances and that shall not exceed 0.1 % of its gross domestic product… payable to the European Stability Mechanism,” or, in some cases “the general budget of the European Union.” The pact must be ratified by a minimum of 12 EU states to take effect.

Despite this effort, the commission remained non-committal regarding Spain, noting that it could not render a decision until it got more information regarding why the country will miss its deficit targets, and until it has seen Spain’s latest budget proposals. Moreover, Spain is not the only problem on the horizon. Despite championing the need for the kind of fiscal discipline outlined in the current treaty, the Netherlands predicted a budget gap of 4.5 percent for 2013, which is 50 percent greater than the 3 percent limit set out in the latest treaty.

Thus, the notion expressed by many European leaders that the EU debt crisis has largely abated remains a pipe dream. Despite the nearly $1.3 trillion of funds injected by the European Central Bank (ECB) into Euro zone banks in recent months, a Greek-style meltdown of Spain, the EU’s fourth largest economy, would required more money than that total to stay afloat. And despite all the happy talk regarding Greece, the $173 billion bailout deal for that nation has yet to be finalized.

And so it goes. The most obviously predictable fiscal train-wreck in the world continues on, seemingly unabated by trillions of dollars of Keynesian-inspired “stimulus” spending whose proponents insist is the only way out of the current crisis, even as they insist that austerity programs are anathema to recovery. They are half-right, yet it is precisely that half-rightness that reveals the insidious nature of socialism: it is the expansion of the state, and the overwhelming number of people thoroughly accustomed to the dependency mindset, that has destroyed the kind of entrepreneurial spirit among those who desperately need private enterprise growth to rescue them. This spiritual debasement, courtesy of state-sponsored self-entitlement, is the dark underbelly of an ideology that can only survive until it runs out of other people’s money to spend. How do those “other people” acquire that money?

By utterly rejecting the socialist ideology that disdains the accumulation of wealth–even as the socialists demand a “fair share” of such wealth to continue underwriting their ideological–and fiscal–bankruptcy.

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  • Anthony

    More investment by Islamic financial institutions is he only answer. Sharia compliant loans tied with modest concessions to increase immigration quotas favorable to the cultural exchange of Moslem civilization would solve the debt crisis and help eliminate Islamophobia.

    Some curriculum modifications approved by the EU and Arab League at the pre-school level would be tied to the loan.

    • hahabad

      The only workable Sharia law is to allow Greek and Spain to borrow money from Arab League without paying any interest.

      Use immigration quota as condition for loan is against Sharia, Jihad to the proponents!

  • Red Baker

    Greece and Spain are already in depression, and more EU nations will follow. Liberals/progressives/socialists are dedicated to socialism, not to prosperity. Even as economies collapse into depression, they see the power of government grow. They are achieving their objective. Even though the cost is high, to socialists it is worth depression. Voters are never given the chance to vote on whether to join (or remain in) the union of socialist EU governments, the union which will drag them all into depression.

  • Snorbak

    Your sarcasm has been noted!

  • Len_Powder

    It's fascinating to watch countries destroy themselves. Of course it's happened many time in the history of the world, but never have countries been so intricately bound together. For this we can thank the globalists who think that unifying the world under one government and one currency will solve all of it's problems. How's that working out for you in the EU countries? Who could have imagined that the day would come when European leaders had to travel to China to request its assistance in averting financial disaster? Who will they ask next? The King of Saudi Arabia or the continent of South America? An individual can live beyond his means by borrowing or stealing from others, but these tactics will ultimately fail and prison will be the only alternative. At least they will get free bedding, meals, and porno flicks on HD TVs. Not so for countries, or its citizens. Someone should start a lotto based on which of the PIIGS will collapse first, second, third, etc. The one who correctly predicts the order should be awarded one of the PIIGS countries as the winning prize.

    • paloma marco

      I do love USA but after your message I hope the USA collapse first… Spain is learning the lesson and is leaving Socialism behind thanks to the wise choice of Spanish people in last elections. You (USA) are right in the way to Socialism with Mr. Obama. Naive Americans have been seduced by socialist Obama. We (Spanish) are our way out, thanks God.
      So I wish you luck. And please do not compare Spain with Greece (not the country, but the current situation). Spain is richer and wiser. And Spanish people are no theaves, but very decent people from an old and well-respected country. No PIGS. So please, be a little more respectful. A decent Spanish citizen.

  • santa

    Greece has land borders with Albania, the Republic of Macedonia and Bulgaria to the north, and Turkey to the east. Thanks for sharing.
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