The pain is Spain – it’s the Banks who are to blame (3)

Over the weekend the Spanish Economy Minister announced that Spain would seek a cash injection of 100 billion Euros to bail out its beleaguered banking system.

In the past 3 years this is the fourth member of the EU (following Greece, Ireland and Portugal) who have had to go cap in hand seeking financial support.

The ill conceived strategy by the Spanish banks of putting all their energies into fuelling a speculative property boom has come home to roost.

However as with any “club” the action of its members can have far reaching consequences. The UK Chancellor George Osborne has been quick to point out the dangers faced by Britain by the ongoing Eurozone crisis. He commented “our recovery already facing powerful headwinds from high oil prices and the debt burden left behind by the boom years – is being killed off by the crisis on our doorstep.”

These ongoing developments will make it increasingly hard for companies to get funding support from the banks. Never has there been a greater need for good housekeeping. Debtors must be strictly monitored whilst stock holding is kept to a minimum.

Expect greater scrutiny from Auditors as more and more people are nervous about signing off any accounts. These challenging times require a robust approach from management to each and every element of the business.