Spanish Prime Minister Mariano Rajoy's economic policy is in tatters. Spain's economic descent is now accelerating, with output shrinking 0.7% in just the last quarter alone - the worst since crisis began in 2009. For the full year, output has fallen 1.8%, retail sales have plunged a remarkable 10.7%, and vehicle ales have fallen 17%. This is diastrous. This is Greek-style debt deflation.
The Spanish cannot say they weren't forewarned. Those who understand how an economy in a credit crisis works knew his plan was going to be disastrous. And so it has been.When Rajoy was campaigning for office, he was quite clear about what he planned to do. And he was elected anyway - with a sizeable majority to boot. Clearly, the Spanish have no one to blame but themselves.
But, we're here now. The ques...
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Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.