Spain Emerges as Leading Candidate for Next Eurozone “Domino”
The eurozone crisis may have been relegated to the backburner and the inside pages of newspapers worldwide, but concern about the state of affairs in Spain continues to mount. Once a model for growth in Europe – during its heyday, it created 1 out of every three eurozone jobs – Spain today appears mired in another recession and boasting the region’s highest unemployment rate. The yields on Spanish government bonds are climbing once more, after the European Central Bank’s LTRO program appeared to be helping keep them at lower levels, signaling that investors are demanding a higher premium for owning those securities. Pressure to create an austerity budget on the part of the strong members of the eurozone – notably Germany – are being resisted by politicians and protested by the public, all of whom fear that an overly-draconian package of spending cuts will simply propel Spain’s economy further into the doldrums. The following charts offer a snapshot of where Spain stands today, and the issues that it must confront.
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