Comment by hourago | Hacker News Reader

Comment by hourago | Hacker News Reader

> Messy and intrusive litigation will follow as creditors seize assets and obstruct access to capital markets. Spain’s creditworthiness will be downgraded and challenge any notion of Spain as a reliable destination for investment — echoing an historical pattern of confiscation that harkens back to Charles III(opens a new window).

So, for the Financial Times if Spain does put the needs of investors above the ones of the citizens it would collapse.

Except that Spain is expected to outgrow most of the rest of European countries in 2023 and 2024. Reality does not seem to fit this articles proposals. *

It seems that the Financial Times opinion is based in willful thinking. To think that maximizing foreign investors profits over taking care of the local economy is better for a country is naive or malice. Spain is a Democracy with a strong rule of law. If the Financial Times thinks that Spain and Venezuela are in the same situation they should flag their content as propaganda instead of news.

* https://economy-finance.ec.europa.eu/economic-surveillance-e...

FT Alphaville is “the FT markets and finance blog”, so this is essentially an opinion piece and the Financial Times is not presenting it as news.

Leaving aside that this article is written very much from one point of view, it's worth drawing comparisons with Argentina and things like the pari passu bond litigation. That statement is probably hyperbole, but there is a real premium to be paid if investors start thinking that there is more risk than expected to their investment.

On the other hand, the CJEU is basically right, in a sense of legal sovereignty that both the US and UK will recognize in their own ways: countries should not be beholden to foreign court decisions if they can at all help it. The EU has a court system, the CJEU is at the top of it, and its decisions should be final.

The real problem is the ability of countries to enter into agreements that promise some investor return that turns out to be against subsequent public policy or even entirely ruinous. The most egregious case was https://theconversation.com/when-even-winning-is-losing-the-...

(some more background, clearly translated from Spanish https://microsegur.com/en/spain-lost-four-international-arbi... )

Heck, I'm the beneficiary of such a scheme myself: I'm the holder of a legacy UK feed-in-tariff agreement that means I get paid about £0.15 for each unit of electricity I generate, regardless of whether I use or export it and regardless of market price. Until this year that was a substantial subsidy - as intended by the policy!

> worth drawing comparisons with Argentina and things like the pari passu bond litigation

Co-author of the op-ed worked for PE firm involved in Argentina bond litigation.

Good find. This is an incredibly "well they would say that wouldn't they" article.

As a counterpoint, please consider Spain is the only EU country to not have recovered the pre pandemic GDP in real terms. Growth in 2022 has been great, but mostly in the first semester, it was almost null in the second. It's the EU country with most unemployment. There is a lot of things to be happy about from Spain, but the economy is nothing to brag about.

Any up-to-date data you can share supporting that pre-pandemic GDP levels have not been recovered?

As I understand, this is not case of abstract money, but most cases about investments to clean energy, for which EU guaranteed payments.

Sure, this is extremely bad, because next time investors will NOT make investments, if this will no been resolved, and Europe will again become vulnerable to energy empires like Russia.

So citizens will have really troubles, because critical investments where not safe.

The economist: The phantom limb of a amputated globalized world flailing and wailing.

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