Economics

Some euro zone countries face the dual problem of a lack of competitiveness and unsustainable debt, says IESE's Alfredo Pastor. Spain, one of the worst countries affected, would need to devalue by 20-30 percent while also generating a primary surplus of 1-3 percent of GDP for up to 20 years, an almost impossible task. The only solution is for these debts to be either restructured or guaranteed by fellow euro zone members.