Spain's debt level has increased to 922 billion euros from 850 billion euros at the end of last year. Perma bulls will be quick to point out that Spain's debt to GDP ratio is better than the US at 68%...so where's the debt problem? This is just the market overreacting again! According to other analysis, Spain's REAL debt levels are much higher when you account for things like Spain's commitments to various "rescue" programs, other regional debt not recognized currently at the national level, and the very real liabilities it owes to other countries within the European banking system. When you take those factors into consideration, Spain's debt to GDP ratio looks more like 133 percent!
It appears that Spain still needs to raise about 68 billion euros through the end of this year and about 143 billion euros in 2013. Notice how a majority of 2012 refunding was done, but just pushed out one more year. The amounts in the first table below for 2012 looks eerily similar to the 2013 line in the second table below. Spain is indeed getting shut out of financial markets, slowly. Also notice that in the span of seven months, Spain's total debt level has gone up by 72 billion euros.
Here comes the cries for more QE and Euro-bonds. I just love how the "street" thinks this will solve all problems. If only it were that simple....
Spain's maturity schedule at the end of 2011
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| Source: Bloomberg |
Spain's maturity schedule at the end of July 2012
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| Source: Bloomberg |