A restructuring of Greek debt would be a “disaster” for Spain and the rest of the eurozone, according to Spanish Central Bank governor Miguel Angel Fernandez Ordonez.
Ordonez, speaking to Reuters, said that he’s not too worried about the upcoming stress tests and the Spanish bank system. “Even in the most pessimistic scenarios for the Spanish economy the use of public resources for the recapitalisation of entities would mean only a relatively moderate increase in the Spanish public debt,” he said.
There are some concerns that the Spanish economy is hiding problems much worse than those assumed by the public. The country has a massive unemployment problem, and its banking sector may be worse than government comments suggest. Further, its regions continue to have large amounts of debt on their balance sheets, that may need to be absorbed by the government.
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