Spain Cries for Help: Is Berlin Listening?

• Spain cries for help: is Berlin listening? 
  By Michael Stott, http://uk.reuters.com/home 
  (Reuters) – Crisis is the watchword in Madrid. Take your pick – liquidity crisis, debt crisis, banking crisis, economic crisis, confidence crisis, investor crisis, jobless crisis. Spain, the ailing euro zone‘s latest problem child, has them all.
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  As the problems pile up, Prime Minister Mariano Rajoy’s five-month-old conservative administration feels like a government under siege. Nervy top officials are reluctant to speak on the record for fear of slipping up. Policymakers contradict one another. Plans keep changing. Financial markets reel amid the uncertainty. The gloom in ministry corridors is palpable.
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  The latest gaffe: after weeks insisting that one of the country’s biggest banks, Bankia, did not need fresh funds, ministers dropped the bombshell last Friday that there was a 23-billion-euro hole in the accounts. They have yet to explain clearly how they will find the money when they are already struggling to finance a spiralling national debt.
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  The effect of the Bankia news on fragile financial markets was devastating. Spanish shares dived to 9-year lows, the euro sank and investors fled Spanish government debt, pushing the yield towards the 7 per cent level at which fellow eurozone members Ireland and Portugal were forced to seek national bailouts from Brussels.
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  To hear the government tell it, outsiders have got it all wrong: Spain has lived beyond its means for too long and is now going through a painful but necessary period of adjustment to shrink its state sector, cut spending and boost competitiveness. All the right things are being done. Rajoy’s government is serious, committed and enjoys a comfortable parliamentary majority.
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  Officials say foreigners don’t understand that Spain has boosted its exports more than any other European country in the past three years, that it has reformed its labour markets, cut its costs of production and come clean about the problems in its banks, which lent too enthusiastically to finance a huge property bubble that has now burst.
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  Now, ministers say, Madrid just needs time and some help and support from its European partners to get through the most acute phase of the crisis and give the reforms time to work.
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  RUNNING OUT OF TIME AND IDEAS
  Unfortunately, time is running out.
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  read more!

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