The foreign minister, who was speaking as Spain’s long-term borrowing costs hit an unsustainable 7%, warned that other European countries would suffer dreadfully if they let Spain fall. ”If the Titanic sinks, it takes everyone with it, even those travelling in first class,” he said, in a warning clearly aimed at Germany and other eurozone countries.
Brinkmanship or is impending doom just round the corner? Maybe this is a reaction to Spain’s 100 billion no strings bank bailout, a mere bagatelle according to this Economist article “It is a plaster, not a cure.”
More than half of Spain’s youth under 25-years-old are unemployed and almost five million of the country’s citizens are now on unemployment benefits. But, while private depositors and investors have withdrawn more $100bn from Spanish banks in the last two months, the government insists that it is not on the verge of insolvency and does not need an international bailout.
Al Jazeera’s Jonah Hull reports from Madrid.
Unemployment is the Main Problem of the Spanish Economy
More in the news:
Spain’s unemployment rate hits 22.9%
The number of people claiming unemployment benefit in Spain rose by 112,269 in January, taking the overall figure to 4.7 million.
What happens when debt-fueled false prosperity disappears? Just look at Spain.
22 Signs That The Collapsing Spanish Economy Is Heading Into A Great Depression
Can Spain learn from Irish crisis?
One key difference between Ireland’s and Spain’s banking crises is that real estate loans peaked at 77% of the Irish economy versus 29% in Spain. The Spanish bailout is also 9% of their economy versus €63bn (or 43%) in Ireland. Yet the core issues are the same, say Irish analysts…
Is Iceland a role model?
Iceland is certainly an interesting example of how to handle a financial crisis, and there may even be some lessons there for the rest of us. But I’d be pretty cautious about those lessons. What worked for Iceland doesn’t necessarily scale up to work for the rest of the world.
Nigel Farage: Euro Break-Up Inevitable, Just a Question of How