Nobel laureate Christopher Pissarides claims that the European Union doesn’t have enough financial resources to help Spain in case the nation follows Greek pattern and collapses.

The single currency, in its turn, won’t be able to survive such outcome. In his view, stronger European nations, Germany in particular, won’t be able or want to accumulate provide Spain with bailout. As a result, policymakers may need to seek a more fundamental solution, such as Spain temporarily reverting to the peseta.

Pissarides won Nobel Prize in economics in 2010 for research into the difficulties of matching supply and demand, particularly in the labor market sharing the award with Dale Mortensen and Peter Diamond.

Spain plans to auction debt tomorrow selling bonds that due in 2016. The country plans to draw 3 billion euro of financing.

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