The search for solutions to Spain’s financial trouble continues and becomes more complicated by the moment. It has not been determined whether Spain can cut its own budget before it asks for help as it attempts to avoid having forms of austerity forced on it by outsiders. It also is not clear whether Spain can avoid aid if its borrowing costs drop. Recently, rates have gone the other way.
Spanish Prime Minister Mariano Rajoy will gather with other national leaders in an attempt to decide which government costs can be cut. Even if Spain can go to the European Union and International Monetary Fund with a reasonable plan, there is word that the two organizations have been in a battle over which one will have primary authority on matters that determine all bailout rules. According to Reuters:
Officials from Greece and the “troika” of European Union, European Central Bank and International Monetary Fund (explain this) have told Reuters tensions have risen in recent weeks as negotiators wrangle over further budget cuts, with the IMF adamant that Greece reduce its debt further.
Greece is likely to set a precedent for Spain.
Douglas A. McIntyre