The head of the German Bundesbank Jens Weidemann holds Spain to introduce fundamental reforms in the banking sector. The reason for this, he said, is the fact that the balance sheets of banks also always reflect the health of the economy as a whole.
There is an enormous need for action in this sector and one must act quickly now to get the economy back on track. Further procrastination threatens to increase unemployment and further deterioration in financing. Many investors would also be pleased to see a change in this regard.
The head of the Bundesbank also commented on the current situation in Italy. Here Jens Weidemann sees no need for the euro bailout fund. If Italy continues to follow its course, it is on the right track.
In view of the critical budget situation, the Spanish Prime Minister has already presented extensive austerity plans. Madrid has already taken the first measures, mainly as a result of pressure from the financial market. From 01.09. the value added tax will be increased in Spain. Also concerning the pensions it is to give a reform, which is probably announced soon to the public.
It remains to be seen how Spain frees itself from the crisis, however, one seems to have recognized the seriousness of the situation in Madrid and to act quickly and concretely.