Wednesday, June 16, 2010

The Pain in Spain - who is to blame?

I read an interesting debate recently between leading economists about whether the Spanish economic crisis was of Spain's own making or whether Spain was the victim of failings in the Euro or of the global crisis more generally. My view is obvious from the title of the article I wrote on the subject which was published recently here: The Pain in Spain is Mostly Self-Inflicted | Alrroya

Governments love to blame international forces beyond their control for economic ills at home. Gordon Brown was a dab hand at this. But when a boom which involved a tripling of debt and house prices ends in a bust should we really be surprised? And could the governments of Spain and the UK not have stepped in to end the excesses long before their economies got addicted to debt? I think so and let us hope they don't let booms get carried away again although looking at both countries the next boom seems an awfully long way off.

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