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December 15, 2010 3:50 am
From Mr José-Ignacio Torreblanca.
Sir, David Mathieson considers Spain’s ills to be well deserved after what he calls a “lost decade” (Letters, December 3). He is quite correct that Germany has done extraordinarily well in the last years. But Spain is not a failed state. Rather, it has an impressive 25-year record of reforms, first to get into the European Community, then to join the euro. As a result, between 1985 and 2009, its income per capita gross domestic product rose from 71 per cent to 103 per cent of the European Union average. More to the point, in 2007, before the financial crisis hit Europe, Spain recorded a 1.9 per cent of GDP government surplus, compared with 0.2 per cent in Germany, and its public debt stood at 36.2 per cent of GDP compared with Germany’s 65 per cent. Thus, its deficit is a consequence of the crisis, not the cause, and is being reduced due to measures adopted by government.
In any case, in my article “Spain is threatened by a crisis made in Germany” (Comment, November 30) I did not intend to blame Germany for the economic crisis in Spain, only to stress that Angela Merkel’s confusing messages to the financial markets in relation to the permanent crisis resolution mechanism had dramatically aggravated it: a point that I am sure even Jean-Claude Trichet would concede.
But since he cannot publicly do so, I stay with the words of Otmar Issing: “I would not suggest that the announcement [that the debt crisis would put the survival of the union in question] deserves a Nobel prize in communication” (“Germany is right: bondholders must pay”, Comment, December 2). And when dealing with nervous financial markets, getting communication right might spell the difference between life and death.
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