IMF Warns Spanish Debt-Load Is Unsustainable

Tyler Durden's picture


In the six months since the IMF last provided its economic forecasts, the situation in Spain has gone from bad (but sustainable) to worse (and unsustainable). Their current forecasts show no 'peak' in debt-to-gdp ratios at least as far as 2018 with the budget deficit primarily to blame.


As Bloomberg Briefs notes, general government primary borrowing, a measure that excludes the cost of paying interest on government debt, was revised up to 7.9% of GDP from 4.5% for 2012.


The inability to narrow the budget deficit, surprise surprise, appears partially due to lower real GDP growth forecasts and even then a recent study has found that World Economic Outlook real GDP growth forecasts showed a tendency to systematically exceed outcomes. This phenomenon was particularly prevalent in countries with an IMF-supported program.


The IMF warns Spain "will need to undertake unprecedented fiscal efforts to bring their debt ratios to traditional norms," as most countries have never experienced debt levels similar to current ones; and seemed to think a debt restructuring is more likely and will "entail substantial and long-lasting economic and social costs."


Source: @Davidjpowell24 and Bloomberg Briefs

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Thu, 04/18/2013 - 09:24 | 3465991 Aguadulce
Aguadulce's picture

Muy Oso-ish?

Thu, 04/18/2013 - 09:30 | 3466019 Burt Gummer
Burt Gummer's picture

Y por lo que comienza.

No shit sherlock.

Thu, 04/18/2013 - 09:44 | 3466088 toys for tits
toys for tits's picture

I prefer Bloomberg Boxers.

Thu, 04/18/2013 - 09:25 | 3465996 NoDebt
NoDebt's picture

Have no fear, Captain Obvious is here!

Thu, 04/18/2013 - 10:10 | 3466180 tango
tango's picture

Spain has found a solution - they are going to rely on their pension fund.  

Thu, 04/18/2013 - 09:27 | 3466004 Dr. Engali
Dr. Engali's picture

  DR. Engali Warns the IMF The world wide debt-Load is unsustainable.



Thu, 04/18/2013 - 09:31 | 3466024 Inthemix96
Inthemix96's picture

I am shocked doc,

Shocked like a bloke just been hit by lightning walking down the middle track of electrified railway line after sticking my finger in a plug socket, twice.

Thu, 04/18/2013 - 09:33 | 3466031 Bearwagon
Bearwagon's picture

IMF: Load the world with wide debt? Sounds like a plan!

Thu, 04/18/2013 - 09:55 | 3466135 DaveyJones
DaveyJones's picture

yes, what do you do when the thing warning you is the first thing you should fear?

Thu, 04/18/2013 - 09:29 | 3466007 I am more equal...
I am more equal than others's picture

What is the spanish word for 'kaboom"?

Thu, 04/18/2013 - 10:00 | 3466154 tango
tango's picture

It starts with an "F" and ends with a "K".

Thu, 04/18/2013 - 10:15 | 3466206 Dr. Venkman
Dr. Venkman's picture

¡Ay Dios Mio!

Thu, 04/18/2013 - 09:28 | 3466008 Chief_Illiniwek
Chief_Illiniwek's picture

The IMF could save a lot of money/resources/time by reading ZH.

Thu, 04/18/2013 - 09:44 | 3466080 Skin666
Skin666's picture

You just don't get it do you?!

They have to employ thousands of paid shills 'economists' to fabricate formulate projections and models, or there would be no consensus on how to get out of this economic stagnation, that they didn't see coming in the first place...

This is the logical positivist method, and it's worked exceptionally effectively so far, thank you very much...


Thu, 04/18/2013 - 09:28 | 3466011 Inthemix96
Inthemix96's picture

No fucking shit????

Where the fuck do these idiots get trained?  Fucking pre-school?

Thu, 04/18/2013 - 09:34 | 3466034 Skin666
Skin666's picture

+ 1 for saying the word fuck 3 times in 13 words

Impressive, even for ZH!

Thu, 04/18/2013 - 10:47 | 3466376 debtor of last ...
debtor of last resort's picture

Where the fuck is Longsoupline when you need him.

Thu, 04/18/2013 - 13:08 | 3467074 jldpc
jldpc's picture

When I saw this on a T-shirt in Las Vegas couple of years ago, I couldn't stop laughing: "Fuck You, You Fucking Fuck." Now it comes to ming whenever I read something/whatever said by an economist, preacher, politician, banker, elected official, unelected official, union boss, pension plan administrator, Government Planner, woman with fake tits, most television advertisements, talking frogs, dick enlargers, Hollywood personalities talking in favor of ridiculous liberal theories on just about anything, the length of time it takes to finish criminal appeals to hang/shoot/ fry convicted criminals who deserve it and weknow it from day one after the guilty verdict, lazy prosecutors who do not go after banksters and other wall street criminals, the entire mob in Guantanomo prison - anybody who has ever hurt a US serviceman or woman, and that gutless, fakester Obama, but also that lying sack of shit G. Bush; I could go on... and on... how about that hapless, helpless, and hopeless J. Biden....... and the rest of the scum in Washington ... oh well -- stay armed ......   

Thu, 04/18/2013 - 09:34 | 3466039 Bearwagon
Bearwagon's picture

I've heard it's called "Ivy-League".

Thu, 04/18/2013 - 09:29 | 3466016 rsnoble
rsnoble's picture

Our sanity dealing with such fucking morons as the IMF is what's unsustainable. 

The gov't would shit all over themselves if a terrorist attack happened that they weren't involved in.

Thu, 04/18/2013 - 09:49 | 3466115 aleph0
aleph0's picture


You have to be mad to be sane in this world.

Thu, 04/18/2013 - 10:08 | 3466173 tango
tango's picture

Most folks can't accept that the IMF, FED, EU, etc are not purposely trying to harm the economy.  They remind me of preachers (sorry) who earnestly think invisible beings are listening to their thoughts, randomly answering prayer (Sports victory - yes, dying child - no) and know what's going to happen.   These economic preachers truly believe that problems caused by massive debt and over spending can be solved by massive debt and overspending. Their mind is so wrapped around an ever-expanding welfare/nanny state that they truly cannot imagine any other scenario.  Notice that NO ONE suggests a liberalization of rules, regulations, taxes, etc.

This whole charade could have gone on for years but for two things - the rapidly declining European births/workers and the fast approach of $20 trillion in US debt that hammers at the dollar as the reserve currency.

Thu, 04/18/2013 - 09:30 | 3466020 williambanzai7
williambanzai7's picture

The efficient market hypothesis says all debt loads are sustainable.

Rogoff and Reinhart are fringe low brows according to PhD studies.

Thu, 04/18/2013 - 09:37 | 3466058 NoDebt
NoDebt's picture

Yeah, thank God we finally discredited those creeps, right?  How dare anyone say that there are limits to how much you can borrow before you run into trouble.  If 90%, 120%, 150% of GDP isn't a problem, then I guess nothing will be. 

Japan will be so relieved.

Thu, 04/18/2013 - 09:47 | 3466099 fuu
fuu's picture

I liked the excel error debate.

Thu, 04/18/2013 - 10:18 | 3466216 Dr. Venkman
Dr. Venkman's picture

Excel errors are only shrugged off when they involve menial issues, like VaR. When it comes to the extremely empirical hard science of economics, they can be devastating.

Thu, 04/18/2013 - 10:42 | 3466341 DaveyJones
DaveyJones's picture

that's why they call it a hypothesis

Thu, 04/18/2013 - 09:36 | 3466021 THE DORK OF CORK
THE DORK OF CORK's picture

The debt is a illusion.

Debt is a instrument.

The IMF wishes to push Spanish resource burn into the arms of real goods deficit US , UK  & to a lesser extent France.


Like all wars this is a battle for real goods ............real wealth.


Spanish austerity = British real goods trade deficit with Spain.

Ask yourself ? who benefits

British trade deficit with Spain (£ millions)

Y2010 : – 460
Y2011 : – 2,078
Y2012 : – 3,044

We live in a world with no final settlement.
Euro austerity transfers real resources to the UK , however inefficiently.

Europe is not what it seems.

Thu, 04/18/2013 - 09:45 | 3466087 reload
reload's picture

I don`t quite follow - just looks like the UK is an increasingly important export market for Spain.

They get paid for the goods, whatever they are. Meanwhile UK exports elderly expats and lets the Spanish fishing fleet empty the Britsh Isles fishery.

Joking apart, I would like to understand your point more fully if you care to fill it out a little....  

Thu, 04/18/2013 - 10:03 | 3466146 THE DORK OF CORK
THE DORK OF CORK's picture

Money they can't spend..................

No final settlement.

The UK gets £106 billion more real goods then it exports.................i.e. free goods.


Indeed expats burning scarce resources in Spain adds to British real goods burn.


Thu, 04/18/2013 - 10:07 | 3466166 LawsofPhysics
LawsofPhysics's picture

The UK is trying their hardest to become one big gated community.  Let them.  Let's see how long those supply lines hold.  We have been here before.  At least with the kings of old you new exactly what to expect.

Thu, 04/18/2013 - 09:50 | 3466119 LawsofPhysics
LawsofPhysics's picture

No shit.  The earth's debt, and more importantly, available energy for comsumption relative to the human population is not sustainable.

Everyone with a lick of common sense recognizes this.  Humanity isn't simply another ponzi, it's the ponzi.

You keep your fucking paper, we will keep the resources and physical assets of real fucking value.  Eat your fucking paper, we will eat the produce from our farms and the farms of our countrymen.  The world has been here before (for europe, not that long ago really).  History is pretty clear on where this is heading.

Thu, 04/18/2013 - 10:10 | 3466185 GCT
GCT's picture

LOP spot on.  The time to cull the sheeple is getting closer by the day.

Thu, 04/18/2013 - 10:15 | 3466202 new game
new game's picture

long darwin with a Fibonacci retrace of the human population...

do we over shoot...

o-2000 ad retrace-hmmm

Thu, 04/18/2013 - 10:26 | 3466242 DaveyJones
DaveyJones's picture

History is clear. Is that why these bastards are so fuzzy?

Thu, 04/18/2013 - 11:41 | 3466677 disabledvet
disabledvet's picture

Well I would agree "no matter how much food you feed these humans they're still lacking in energy." plus wherewithal, know how, morality, meaning, ethos, humor, God, "breeding", enlightenment, reason, compassion, empathy, sex appeal, vibes, a nice know "the usual shit."

Thu, 04/18/2013 - 10:37 | 3466314 DaveyJones
DaveyJones's picture

great post Dork. It's really quite simple. They just want you to think otherwise.

Thu, 04/18/2013 - 09:32 | 3466026 venturen
venturen's picture

KRUGMAN SAID DEFICIT DON'T MATTER!... Or was it Bernanke said..."I can print that". Well, its one of those two!

Thu, 04/18/2013 - 10:27 | 3466246 Non Passaran
Non Passaran's picture

Good, cause I thought that came from a RepubliCon such as Cheney

Thu, 04/18/2013 - 09:32 | 3466028 Sheeple Shepard
Sheeple Shepard's picture

*sigh* give me a shove when the I.M.F pionts out that America's $17,000,000,000,000 and counting debt and that they "will need to undertake unprecedented fiscal efforts to bring their debt ratios to traditional norms....". Thats when the party gon' start.

Thu, 04/18/2013 - 09:33 | 3466029 theorist
theorist's picture

Spain should just default, leave the Euro and get on with the business of recovering rather than to continue with this ever worsening and depression prolonging approach of trying to remain in the Euro

Thu, 04/18/2013 - 09:35 | 3466044 d edwards
d edwards's picture

Message to Spainish people: prepare for a bank account haircut.

Thu, 04/18/2013 - 09:38 | 3466066 Sheeple Shepard
Sheeple Shepard's picture

Oh, i think they are aware of that. Thats another reason why P.M's getting kicked around with increased fervour, exept its all going tits up because the hombres(and everyone else with a brain) be buying anyway. 

Thu, 04/18/2013 - 10:48 | 3466393 debtor of last ...
debtor of last resort's picture

Yes. 97% of state pensions is already in the Spanish bond sinkhole.

Thu, 04/18/2013 - 16:04 | 3467805 Omen IV
Omen IV's picture

that was the obvious answer in the "beginning" of this drama in 2008 - the "only" honest politicians were in Iceland - they put it to a referendum and left the debts for the banks and their creditors - everyone else absorbed them on to state balance sheets - Why?

it is obvious that you could create a national bank overnite - capitalize it with state funds and pick up the mortgages and assets for .10 to .25 cents on the dollar and given the spanish & irish people a huge break on their mortgages - 50%+ and fuck the banks correspondents and everyone above 100,000 in deposits - but - the politicians were paid to do what they were told by the EEC managment and whoever controls them

this will be the worst debacle in history simultaneously for many many countries and their peoplefor decades - all of whom could have fucked the banks and walked

it is really about democracy being a chirade nothing more nothing less.......everywhere!

Thu, 04/18/2013 - 09:33 | 3466036 sumo
sumo's picture

"debt restructuring is more likely and will "entail substantial and long-lasting economic and social costs."

Therefore, we must steal all bank accounts over 100k, and we must steal all bank accounts not over 100k.

People of Spain, we regret this action but ECB-held Bank Debt is sacred. All kneel. Let us pray.

Thu, 04/18/2013 - 09:36 | 3466046 Shevva
Shevva's picture

IMF? Internatinal Money Fudgers - couldn't run a monopoly bank.

Thu, 04/18/2013 - 10:00 | 3466155 sumo
sumo's picture

International Money Fluffers - the anti-deflation experts.

Thu, 04/18/2013 - 11:22 | 3466580 Stuntgirl
Stuntgirl's picture


Thu, 04/18/2013 - 09:37 | 3466052 stopcpdotcom
stopcpdotcom's picture

This is Professor Jeffrey Sachs of Columbia University speaking at the "Fixing the Banking System for Good" conference held at the Philadelphia Federal Reserve on April 17, 2013. This audio is absolutely EXPLOSIVE!

By Bill Still


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