Spain: Somebody Turn Down The Heat

The euro zone's one-size-fits-all monetary policy is proving to be too loose for Spain, the euro bloc's fourth-largest and second-fastest-growing economy. Because fiscal policy is not sufficiently tight to offset the stimulus from the European Central Bank's 2.5% policy rate, which was cut in April from 3%, Spain is in danger of overheating.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.