Spain Nears Implosion As Businesses Threaten To Leave

HJ: Whereas there once was a time when almost no one in the government spoke out against the government or released any data suggesting that things were in severe peril, the Eurozone debt situation is spiraling out of control to the point when it is obvious that someone is lying when they claim everything is ‘ok’.  As such, we are now seeing high-level ministers finally giving us some semblance of truth about the state of affairs.  Indeed it may not be the whole picture but it is a step in the right direction. – Truth

Mike “Mish” Shedlock | Jul. 22, 2012, 4:46 AM
Cristobal Montoro, the Spain’s finance minister has made a liquidity destroying proposal to tax short-term financial transactions at an astonishing 56% tax rate. Businesses are already upset over hikes in the VAT and have threatened to leave Spain.

Interestingly, in spite of raising taxes elsewhere, the VAT was lowered on the highly subsidized renewable energy sector.

Why? Here is the answer: “Secretary of State for Finance, Ricardo Martinez Rico, is the leading advisor in the industry”.

Prepare for Spanish Implosion

Here is the “as-is” Google translation of the El Econimista article Waiting for the Intervention. Emphasis in bold not added.The situation is out of control. The government approved last week the biggest adjustment of his story in hopes that it would serve to calm the markets. But it was not. The risk premium yesterday overcame the barrier of hundred basis points, something never seen, and the bond closed at 7.27 percent. The first question that arises is what should make efforts so painful as the increase in VAT or removal of the extra pay of officials if markets continue to punish us hard. It would be naive to think that just announced a big cut, things would begin to change. There are still many uncertainties that sow mistrust.

Read the rest of the article here: Business Insider

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