MADRID | Finance Minister Yuval Steinitz spoke on Sunday about the importance of budgetary discipline. “Should Israel find itself in Spain’s situation, no nation or organization will give it 100 billion euros in aid,” he said prior to the cabinet meeting. The European aid will protect Spain, the fourth largest economy in the Euro zone, if the Greek elections, scheduled for June 17, will cause a new round of turmoil in the financial markets.
According to the Bank of Israel, government spending in 2012 has already exceeded the budget by NIS 7 billion due to the defense budget and workers’ union contracts. Spain made at least four attempts to reform the banks after the housing market collapsed in 2008, which included tightening the provisions related to provisions and encouraging mergers. According to the IMF, gradual approach to reforms has allowed vulnerable banks to undermine the financial stability.
European leaders have failed to control the debt crisis that started in Greece in late 2009. Greece, Ireland and Portugal have already accumulated relief funds worth 386 billion euros from the EU and IMF, a situation in which these countries have been placed mainly because of the inside bad economics.