The failure of the May 2010 troika strategy is evident. Its objectives, debt control and public deficit, are not being met, while it has accelerated the stagnation of European economies and unemployment. Strong shock therapy, the internal adjustment of the countries of southern Europe, would slow down prices and thereby increase productivity and thus improve conditions of competition. Two and a half years later, the International Monetary Fund (IMF), which is a member of the troika, has admitted such a corrupt belief. In fact, this body has found that with this strategy called fiscal consolidation every euro that has been deducted from public expenditure has led to a decrease in GDP of EUR 1.7. It is just as surprising as it is clear that the IMF has recognised that adjustment measures are part of the problem.

In this way, the Fund also modifies the Spanish State’s forecast for 2013, which points to a decline in GDP of 1.3%, twice that estimated six months ago. Despite the estimation, this fact makes compliance with the public deficit of the coming years impossible. The announcement of the recession has immediate consequences. Above all, the accumulation of debt will continue in the coming years, which will force the Government of Madrid to delve deeper into the path of adjustment, more into a vicious circle. Montoro’s impossible 2013 budgets provide for EUR 35 billion for interest payments on debt, which accounts for 12% of the budget. The share of the State’s financial expenditure is gaining increasing weight in the structure of the budget and in this way the absolute and relative amount of the social lines is considerably reduced. The increase in public debt over the last five years puts on the table the need to tackle this problem as soon as possible. Even faster, when the ECB’s timid intervention is unable to lower the high level of the risk premium.

The public debt of the Spanish State has soared rapidly in recent times. It was one of the lowest in the EU in 2007 (36% of GDP) and today accounts for 76% of production. The reasons for doubling public or sovereign debt are economic recession and the massive transfer of private debt to the public sector. The strategy of the last two governments of Madrid not to drop the bank has generated a huge transfer of public money to private money. Some estimates point to figures ranging from 350 to 420 billion euros when Spanish banks account for grants, guarantees, soft loans or prizes in the last five years. They are not fully compatible from the point of view of the computation method, but it is significant that this amount is equivalent to the increase in public debt to GDP over the last five years (i.e. 40%). This is undoubtedly the main cause of the rise in the State's public debt.

On the eve of a new rescue for the MEDE fund, the new aid will place an irreversible burden on the payment of the debt which has already become a black and financial hole. We are living in a situation similar to the South American debt problem of 1980 in southern Europe. There, after a lost decade, several debt settlement plans were processed (Brady, Baker...). They were neither fair nor adequate. However, for the end of the debt crisis, the cancellation of part of the debt was recognized as indispensable. In Europe, over time, the issue is in due course. The later the issue of settlement enters the branch of the State and the EU, the worse the social gravity of the Spanish State with the greatest social inequalities in Europe.