Euskal Herria fact of the day

The Basque government, which collects its own taxes, now has a credit rating higher than that of Spain.

There is more here (FT).


Good argument for independence or at least further decentralization (let regions collect their own taxes).

But would the region keep that credit rating if it was no longer part of Spain?

Probably, so long as they paid their debts.

Euskal Herria was unaffected by the construction boom.

Connecticut, which collects its own taxes, is also rated higher by the S&P than the US. To my mind that just undermines the credibility of the S&P (I did not fact check this but it was definitely true this time last year).

When the markets say one thing (via interest rates) and the agencies say something else, I know which one I believe.

Governmental interest rates have nothing to do with markets nowadays. The plurality of the federal debt is being bought up by the federal reserve. This means that the rate on federal debt is not a market rate.

It's still a batter market than the guys at S&P sitting around at lunch and trying to come up with some three letter code.

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