Spain’s Economy minister blames Greece (and the market)

The Trader has covered the topic of how Spanish banks value properties. The Spanish economy is in a free fall mood, but things aren’t helped by the great denial, stretching from the average Joe to the Economy minister. We are now hearing it is all Greece’s fault, and the market is pricing unrealistic assumptions. Just like the imaginary world of Don Quijote, this is just another sign of the great denial in Spain. From El Pais.

“Greece has a contract: in exchange for assistance it has to put in place certain economic policies, but without a government that is not possible,” De Guindos said. “We have to think about the future steps that have to be made in Greece. We have to analyze what has been done in the case of Greece for the implications this crisis has for the rest of the Union. Greece doesn’t want to leave the euro. On this there has to be coordination; governments have to do their homework but the EU also has to do its homework.”

The government has said it will appoint two independent appraisers to carry out the valuations. “There are doubts about the Spanish banking system,” De Guindos said. “The government maintains that the perception of the reality the markets have is worse than the reality. That is why we have undertaken this exercise in transparency.”

The minister said the government wants to complete the valuation process in two months rather than the three to four months he calculated it would take last week. “They [the Eurogroup] asked us to speed up the work, and of course the Spanish government is absolutely open to this.”

There was some confusion over whether the ECB’s involvement in the valuation process was at Spain’s bidding or an initiative of the ECB itself. “The ECB showed interest in cooperating with the Bank of Spain and the independent appraisers,” De Guindos said as he brushed aside questions on whether this would undermine the prestige of the Bank of Spain.

Full article here.