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BARCLAYS ECONOMIST PHILIPPE GUDIN TALKS SPAIN ON BLOOMBERG TV
JANUARY 30, 2013
SPEAKERS: PHILIPPE GUDIN, CHIEF EUROPEAN ECONOMIST, BARCLAYS CAPITAL
GUY JOHNSON, BLOOMBERG NEWS
FRANCINE LACQUA, BLOOMBERG NEWS
(This is not a legal transcript. Bloomberg LP cannot guarantee its accuracy.)
04:19
GUY JOHNSON, HOST, BLOOMBERG NEWS: Even as Spain's economy struggles to stem the contraction, is the worst over? Philippe Gudin says there are reasons to be optimistic. He's chief European economist at Barclays, and he joins us now. Philippe, we seem to have a divergence between what the financial markets are saying and what the data are telling us about what's happening on peripheral economies. Is the data going to improve? Is the market simply just front running an improving economic story? Because at the moment, it doesn't feel like it.
PHILIPPE GUDIN, CHIEF EUROPEAN ECONOMIST, BARCLAYS: Yeah. Thank you very much. Actually for Spain, I think the story is a bit different. We've probably avoided the worst with the action of the ECB last year, but the Spanish economy still has to adjust. There are (inaudible) macroeconomic imbalances. The budget deficit is still very large. And I think it's going to take some time before the Spanish economy is able to grow again.
So we expect the Spanish economy to contract further in 2013, and it's only probably at the end of the year or beginning of next year that the Spanish economy could possibly start to grow again. But the adjustment (inaudible) take a long time actually.
FRANCINE LACQUA, HOST, BLOOMBERG NEWS: And so Philippe, does it mean that Spain will have to ask for a bailout? Can it fund itself on its own or will it have to get some European help?
GUDIN: I think - I think the prime minister tries to avoid a bailout. Clearly, it would be a - a very difficult decision to take for the government. Given the situation right now, we don't think that the protection (ph) program is necessary anymore. I think the ECB's preventive action with the threat of the OMT for now is sufficient to (inaudible) financial markets to bet against Spain. But I don't - I think there could be an accident...