Spain is caught up in self-delusion

Commentary feature. The Spanish authorities appear to have persuaded themselves that the economy is about to rebound and that Spain can muddle through without an IMF-EU bail-out, writes Desmond Lachman.

It would be very much more constructive were Spanish policymakers to recognise the huge policy challenges that lie ahead and were they to go soon to the IMF for much needed financial support. It would also help if they took serious measures to recapitalise their savings and loan banks.

ESO: Background information: Endure cuts for sake of Spain, urges Zapatero http://www.europeansources.info/record/endure-cuts-for-sake-of-spain-urges-zapatero/

IMF Survey, 30.7.10: Fragile Recovery In The Cards For Spain http://www.imf.org/external/pubs/ft/survey/so/2010/int073010a.htm

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