The president of the bank employers (AEB), Miguel Martin, said today that a break in the euro zone is not only possible but “even probable.”
Speaking at a course on the euro crisis in the International University Menéndez Pelayo (UIMP), Martin has argued that Europe’s problem is the lack of competitiveness and that “we are content to have a mild recession.”
Michael Martin has held that the sovereign debt crisis comes from the fear that a default occurs, as happened in Greece, making bondholders, who are mainly banks, treating such titles as “risky assets” .
He criticized the injections of liquidity by the Central Bank (ECB), because “it is a false solution”, which gives money to banks to invest in sovereign debt and become increasingly vulnerable.
So, has insisted that “the problem is that Spain’s economy is not competitive,” so you need an “internal devaluation” to sell cheap, especially to Germany, but with respect to social cohesion.
At the same time, has supported fiscal consolidation in order to become less dependent on markets because “we are going to take a hard”.
In that regard, he added that European aid money must use it “wise” to be more solid and solvent entities because, otherwise, it could even be a negative measure.
To avoid breaking the euro, Martin has chosen to create a rescue fund that can take direct stakes in banks and issuing “some kind of common sovereign” and start the path to a banking union.
He also noted that the employer does not want public money to clean up the banking costs not borne by the taxpayer and has recognized that although the problem of Spain are not banks, “there are other banks that have created a problem.”
Regarding the preferred stock, has suggested that each entity is “responsible” for their emissions, but that if an entity has problems and “is not responsible for itself” nor shall bear the titles.