The Trader wrote about Rajoy when Zapatero was kicked out. We asked ourselves how competent Rajoy was when it comes to solving the Spanish economic mess, inherited by Zapatero. Rajoy, gave a rather muted impression, and has since continued down the same path. Judging by the reforms and the action, Mr Rajoy seems to be stuck in the great Spanish denial, we have covered over the year. Rajoy needs to adress the real economic problems Spain faces, and not simply proclaim “Yesterday, the credibility of the euro won, yesterday the future won. Yesterday, the European Union won.”. A relevant question is whether Rajoy actually sees what needs to be done, or is he trapped in a “fantasy” world, just like Cervante’s Don Quijote. Some more on Rajoy’s credibility, by Bloomberg.
He clearly doesn’t get it,” said Gary Jenkins, founder of Swordfish Research Ltd. near London, who has tracked bond markets for more than 15 years. “Spain needs someone who can come in and grasp the seriousness of the situation and react to that, not just pretend everything’s okay.”
Then, he announced that since the banks’ funding problems were resolved he would continue with his plans to watch the national soccer team play that night and climbed aboard his government jet to fly to the Polish city of Gdansk.
Things are heating up in Spain. 5 yr CDS prices are climbing higher today, and don’t be surprised to see new highs as the Greek mess starts spreading to the Iberian peninsula. There has been some reporting in non mainstream media of Spain engaged in creative accounting over the past days. If true or not, we will see. For now, according to EL Pais, Spain’s social security chief, is apparently not a doctor, although his CV said so for a decade. With this mentality, we ask ourselves, how will they fix the Spanish collapsing Economy?
Hopefully they will act differently to Don Quijote and his imaginary world. From El Pais below.