The way to solve the Greek crisis will affect Spain
An expert in Economics International points out at the University of Navarra that "a massive bailout, without the need for private investors to lose money, would show the strength of Europe".
Guillermo Calvo, a specialist in Economics International at Columbia University, pointed out today at the University of Navarra, during the celebration of a congress on financial markets and monetary policy, that "the way the Greek crisis is solved will affect Spain". "If there is a massive bailout, without the need for private investors to lose money, this would be positive for Spain, because it would show the world the strength of Europe. However, if the Hellenic country is allowed to 'fall', the consequences would be serious, because it would mean a sample of weakness."
"We have experienced a lack of coordination between the European Central Bank (ECB) and Germany. Trichet was in favor of the bailout, while Germany was against this decision". If this had been the dominant opinion, the Spanish status would have been in danger, "not because it has structural economic problems, but because there is a debt to refinance".
As for the reasons that have led to the current economic outlook, Guillermo Calvo explained that "some cases are easy to explain, such as Greece, as these are countries that have been over-indebted", however, situations such as Spain's are more subtle. "The public sector had not been over-indebted but public bodies had to become position of the private sector."
Towards moderate growth
Despite the measures that may be implemented in the economic field, "it is difficult to be optimistic. We are heading towards a system of moderate growth, where there is little international coordination and where, as time goes by, if the advanced economies do not improve, the political status could become more complicated".
Guillermo Calvo spoke at the congress organized by the School of Economics, "What`s next? Monetary Policy and Financial Markets". Experts from different institutions such as the Comisión Nacional del Mercado de Valores, the International Monetary Fund, the Bank of Spain, and universities such as Princeton, the London School of Economics and Bilkent University, among others, participated in the event.