Sunday, May 20, 2012

ESPAÑA Y EL EURO, SEGUN MICHAEL PETTIS

EconoMonitor : EconoMonitor » Europe’s Depressing Prospects: Two Reasons Why Spain Will Leave the Euro


LA ESPIRAL MORTAL


The death spiral



"I said at the beginning of this newsletter that there were two reasons why I was certain Spain would leave the euro, the first of which has to do with the logic of Spain’s balance of payments position and the second with the internal dynamics that drive the process of financial crisis why I was certain that Spain would leave the euro.  To address the second, I think Spain will leave the euro because it seems to me that the country has already started on the self-reinforcing downward spiral that leads to a crisis, and there is no one big enough to reverse the spiral.
How does this process work?  It turns out that it is pretty straightforward, and occurs during every one of the sovereign financial crises we have seen in modern history.  When a sufficient level of doubt arises about sovereign credibility, all the major economic stakeholders in that country begin to change their behavior in ways that exacerbate the problem of credibility.
Of course as credibility is eroded, this further exacerbates the behavior of these stakeholders.  In that case bankruptcy comes, as Hemingway is reported to have said, at first slowly, and then all of a sudden, as the country moves slowly at first and then rapidly towards a breakdown in its debt capacity.
What is key to understanding the process is to see that stakeholders will behave for perfectly rational reasons in ways that politicians and moralists will decry as wholly irrational.  Rather however than respond to appeals that they stop behaving irrationally, stakeholders will continue making conditions worse by their behavior as they respond the distorted incentives created by the erosion of sovereign credibility.  To do otherwise would almost surely expose them to disaster.
To summarize what the self-destructive and automatic behavior of the stakeholders is likely to be, it is worth identifying some of the major stakeholders and to suggest how they typically react to a rise in the sovereign’s default risk:
  1. Private creditors.  As Spain’s credibility deteriorates, private creditors will demand higher yields on their loans to Spain even as they change the form of their lending to reduce their own risk, for example by shortening maturities.  This has a double impact on making conditions worse.  First, higher interest rates mean that debt rises more quickly than it otherwise would.  Second, shorter maturities and other changes in the loan structure mean greater balance sheet fragility and a rising probability of default.
  2. Official lenders.  As they are forced into providing liquidity facilities, official creditors typically demand and receive seniority.  This of course increases the riskiness for other lenders and creditors by pushing risk downwards, and so worsens balance sheet fragility and increases private sector reluctance to lend.
  3. Depositors.  As the probability rises that Spain will leave the euro, and that bank deposits will be frozen and redenominated in the weaker currency before any abandonment of the euro is announced, depositors respond rationally by taking money out of the banking system.  As they do, banks are forced to contract lending, to increase balance sheet liquidity, and to reduce risk, all of which act as a drag on economic growth.
  4. Workers.  Rising unemployment and the prospects for an unequal sharing of the burden of adjustment cause unions to become increasingly militant and to engage more often in various forms of industrial action, which, by raising uncertainty and costs for businesses, force them to cut output and employment.
  5. Small and medium businesses.  One of the sectors most likely to be penalized in a debt crisis is the small and medium enterprise sector.  Owners of small and medium businesses know that they are vulnerable during a crisis to an expropriation of their wealth through taxes, price and wage controls, and other forms of indirect expropriation.  They try to forestall this by disinvesting, cutting back on expenses, and taking money out of the country.
  6. Political leaders.  As time horizons shorten and politics becomes increasingly radicalized, policymakers shift their behavior in ways that reduce credibility further, increase business uncertainty, and raise national antagonisms.
It is important to recognize the almost wholly mechanical nature of credit deterioration once a country is caught in this kind of spiral.  Deteriorating creditworthiness forces stakeholders to adjust.  Their adjustment causes debt to rise and/or growth to slow, thus eroding creditworthiness further.
The combination of these and other actions by stakeholders, in other words, can’t help but reduce GDP growth, increase debt, and increase the fragility of the balance sheet, all of which of course undermines credibility further, so reinforcing the suboptimal behavior of stakeholders.  All of the exhortations by politicians, the church, public intellectuals, bankers, etc. – and there will be many – that stakeholders put personal self-interest aside and act in the best interests of the nation will be useless.  Slowing this behavior is not enough.  It must be reversed.
But how can it be reversed?  No one is big enough credibly to guarantee the creditworthiness of all the afflicted countries, and without a credible guarantee the downward spiral will occur, more or less quickly, until it is clearly unstoppable."

Michael Pettis  (18-05-2012)

Wednesday, May 16, 2012

SUSPENSION CAUTELAR DE SANCIONES TRIBUTARIAS

Tuesday, May 15, 2012

SANGRE, SUDOR Y NUMEROS


La Información abajo recogida procede del blog "NADA ES GRATIS" ya enlazado aquí en otras entradas y destaca el tremendo y vital  riesgo social, político y económico.También, aunque ya importa menos, cómo se ha dilapidado el principal activo de cualquier sociedad: una reacción a tiempo adecuada.Como un artículo abajo citado pone de manifiesto (fechado en Julio de 2010), estamos donde estábamos, solo que mucho peor que antes de perder el tiempo que teníamos y dependiendo solo de lo que otros nos quieran ofrecer.

 

(...)

En lo que sí tiene razón Xavier es en que ha llegado el momento de pedir ayuda al EFSF. El problema de la Banca debe ser resuelto por la UE, es demasiado grande para España.

En mi artículo sobre el miedo mismo, (aquí en versión NeG con figuras, aquí en versión El País para todos los públicos), decía que la financiación oficial neta del BCE /Eurosistema para la economía española (las famosas cuentas de Target 2) en el balance del Banco de España acumulada era de 175 mil millones a finales del 2011.  Pues bien, mirad ahora el balance del banco de España (situación a 30 de abril del 2012) y veréis que, tras un horroroso primer trimestre, esta cuenta está ahora a 302.840.530.163,04, es decir, más de 300mil millones, comparados con los 176 mil millones de finales del 2011.
¿Por qué este aumento en tres meses de 125000 millones? Es la LTRO, claro, las operaciones de financiación del BCE, que reemplazan a los préstamos extranjeros a la banca española. No supone en su mayor parte, como ya discutimos, una financiación neta del déficit por cuenta corriente (es muchas veces superior), sino prácticamente entera una salida de capitales al extranjero.

(...) 

Bankia

Pues bien, la ayuda dada hasta ahora de acuerdo con la contabilidad de otro Xavier, Vidal Foch, son avales del estado por 28.500 millones, créditos del BCE (garantizados por el Banco de España) por 40.000 millones (15.000 en diciembre y 25.000 en febrero), si lo de la LTRO de arriba.  Y están las preferentes 4465 millones, del FROB I. O sea, que el Estado y el FGD garantiza 173 mil millones (depósitos) más 28 mil+40 mil +4.4 casi 250 mil millones del balance de BFA.

(...)

España, al contrario que Irlanda en su momento, no está en una situación presupuestaria que la permita el esfuerzo del que estamos hablando. Tenemos que conseguir, como propusimos aqui hace 2 años (el día que el Banco de España declaraba concluida la reestructuración del sistema financiero español) usar el EFSF para rescatar a los bancos, y no al Estado.

Nuestra posición negociadora no es mala: también el BCE está metido hasta las orejas . Y, mientras en el caso de Irlanda tuvo una salida fácil, que fue obligar a Irlanda al rescate a base de negarse a dar más dinero, aqui esa salida no es creíble, simplemente porque España es mucho más grande y está mucho más endeudada".
 

·  Todavía no tenemos los detalles pero si el gobierno piensa que solamente transformando en capital los créditosde unos 4.000 millones que el FROB ya dio a Bankia se va a arreglar el problema, está muy equivocado. Habrá que meter mucho más dinero en Bankia y en otros bancos insolventes. Y las cifras que barajan los analistas internacionales oscilan entre 50.000 y 300.000 millones. Entre el 5% y el 30% del PIB.

·  Si el gobierno de España asume unilateralmente ese costo, va a crear un agujero en sus cuentas públicas del orden del 5-30% del PIB y eso tendría consecuencias catastróficas para el país entero: las primas de riesgo se dispararían, los acreedores restringirían el crédito, una parta cada vez más importante de los impuestos se tendría que dedicar a pagar intereses cosa que obligaría a hacer recortes del gasto y subidas de impuestos. Eso agravaría la crisis todavía más y se crearía una espiral negativa que acabaría con la quiebra del país entero. Pasaría, más o menos, lo que pasó en Irlanda que, al salvar a sus bancos, hizo un agujero en el sector público de alrededor del 30% del PIB y tuvo que ser rescatada por sus socios europeos.

·  Por eso, el gobierno de España debe pedir ayuda a las autoridades financieras europeas y separar el rescate financiero (que va a suceder una vez) de lo que es el déficit público estructural (que se va a repetir en el futuro). Los europeos deben entender que va a ser más barato rescatar a unos cuantos bancos españoles que rescatar al país entero. Es posible que si no ayudan en el tema financiero, les sea imposible rescatar a un país del tamaño de España. La quiebra de España representaría la desaparición del Euro. El Banco Central Europeo, el FMI, la Unión Europea y los Alemanes (sobre todo los alemanes) deben pensar les interesa que el euro sobreviva o no. Si no ponen fondos para rescatar a los bancos españoles, pueden estar cavando la tumba de la moneda única.

·  Tendremos que esperar a ver si es España o es Europa la que pone el dinero público. Esperemos que se imponga el sentido común."

Sobre la financiación, la cuestión es que, en el mejor de los casos, parece que solo puede continuar por la misma vía que hasta ahora (BCE), más en su caso con el concurso del FMI, con el agravante de la elevación en la percepción del riesgo y de la destrucción económica.¿Por qué los agentes que no han sido racionales hasta ahora van a cambiar su percepción y actuación ahora?.¿La tumba que menciona Sala i Martin se está cavando cada día de distintas maneras?.


 Los números y gráficos:








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Sunday, May 13, 2012

ROUBINI SOBRE EL RESCATE ESPAÑOL

EconoMonitor : Nouriel Roubini's Global EconoMonitor » Get Ready for the Spanish Bailout

Ideally, a bailout for Spanish banks should come immediately and in the form of direct capital injections from the EU bailout funds. Germany remains staunchly opposed to this, as it would mean giving up the stick of conditionality and feeding Spain the funding carrot. Such an option is also resisted by the Spanish authorities as the EU taxpayer will effectively take over their banks.

Instead it looks like a bailout for Spanish banks has been postponed until the very last minute. The cost of a bank bailout would then be foisted on to the Spanish sovereign’s balance sheet.

Bank bailouts on this scale may well bring the Spanish state to its knees. If they don’t, Spain’s public and external debt positions will.

In order to stabilise its public debt levels after a bank recapitalisation, Spain would have to generate a swing in its public finances that is not only unrealistic, but also self-defeating. The tax hikes and spending cuts required would make the recession deeper and cause the primary balance to deteriorate.

In order to put itself on a path towards external debt sustainability, Spain would need to see a huge adjustment in its trade balance. In the short-run, a fall in domestic demand could quickly improve the trade balance. However, in the medium-term, Spain can only service its foreign debt if it finds balanced and sustainable growth, which requires a real-terms depreciation that will not occur unless the value of the euro falls sharply.

Anyone who has closely followed developments in the eurozone will be struck by déjà vu looking at Spain’s current predicament. The corrosiveness of banking sector uncertainty for investor confidence in Spain is reminiscent of Ireland in 2009 and 2010. Spain’s austerity-recession feedback loop is similar to the process that fed the economic contraction in Greece and Portugal.

And yet despite the clear signs of failure in the existing bailout countries, the EU looks set to pursue an unchanged plan in Spain. But the crucial difference between Spain and the bailout countries is size. If things go wrong in Greece, Portugal and Ireland, a second bailout is affordable. But there can only be one roll of the dice for a country as large as Spain.

(...)

 The only way for there to be a happy ending in Spain is if action is taken swiftly in Brussels, Frankfurt and other European capitals. But that is not likely to happen. The eurozone periphery and Spanish crisis look like a slow motion train wreck.
  
The writer is chairman of Roubini Global Economics and a professor at the Stern School of Business, New York University. He co-authored this piece with Megan Greene, director of European economics, Roubini Global Economics.

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