News / Europe

    New Eurozone Focus: Spain's Debt, Economy

    Civil servants hold up placards as they protest against government austerity measures in Madrid, July 23, 2012.Civil servants hold up placards as they protest against government austerity measures in Madrid, July 23, 2012.
    x
    Civil servants hold up placards as they protest against government austerity measures in Madrid, July 23, 2012.
    Civil servants hold up placards as they protest against government austerity measures in Madrid, July 23, 2012.
    VOA News
    The debt-ridden Spanish government and the country's troubled economy are the newest face of the European debt crisis.

    Stock markets across Asia, Europe and the United States plunged on Monday on fears that Madrid will need an international bailout after the country's borrowing costs soared above the level at which Greece, Ireland and Portugal all were forced to secure rescue packages.

    Economy minister Luis de Guindos denied that Spain would need help beyond the $122 billion package Europe has already sanctioned for the ailing Spanish banking system.

    But as Spain's autonomous regions sought new assistance from the central government for their own debt woes, interest rates on Spanish debt jumped to more than 7.5 percent, the country's highest level in the 13-year history of the euro currency union. The interest rate is well above the seven percent level that pushed the Greek, Irish and Portuguese governments into bailouts.

    Spain's stock market fell sharply Monday for the second straight day of trading. Officials attempted to curb the freefall, banning the practice of short-selling of financial stocks for three months, on the theory that it contributes to a declining market. In short-selling, investors bet that the price of stocks will fall, borrowing stock from a broker, selling it, and then attempting to buy it back at a cheaper price, to pocket the difference.

    Spain has imposed sharp austerity measures, cutting government spending and increasing taxes. Thousands of workers have taken to the streets in recent days in protest, but the government says the changes are necessary to rein in the government's deficit.

    The underlying problem for Spain is its weak economy. Spain has the fourth largest economy in the 17-nation eurozone, but about a fourth of its workers are unemployed.

    Its economy also is contracting, not growing. In a new report, the central bank said the country's economy shrunk four-tenths of a percent in the April-to-June period, with the government predicting that the decline will continue into next year.

    Additionally, there is renewed eurozone attention on Greece and Italy.

    Auditors from the European Union, the European Central Bank and the International Monetary Fund are gathering in Athens to take a new look at the government's efforts to impose budget cuts so it can receive more money from the country's second bailout in two years.

    Greek Prime Minister Antonis Samaras on Sunday compared the financial woes of his country to that of the United States during its Great Depression in the 1930s.

    Italy, another country with burgeoning debt, also is facing an increase in its borrowing costs.

    Economics professor Nicola Borri said the Spanish economic upheaval has directly affected the interest rate Rome is paying on its debt.

    "So it is not clear right now, if the 100 billion euros that Europe has pledged to save Spanish banks will be able to stop the banking crisis that is right now happening in Spain, and it is not clear yet which is the real trouble in the Spanish provinces. So I think that this uncertainty at the Spanish level is definitely affecting our market as well," said Borri.

    You May Like

    US Internet Giants, EU Reach Deal to Combat Online Hate Speech

    Facebook, Twitter, Google and Microsoft commit to ‘quickly and efficiently’ act to clamp down on use of social media to incite violence, terror

    Video Tunisia’s Ennahda Party Begins a New Political Chapter

    Party now moves to separate its political and religious activities; change described by party members as pragmatic response to political and economic challenges facing Tunisia today

    Virtual Reality Fine-tuned at Asia Tech Show

    Microchip designers hope to improve resolution for users of systems that can turn your bedroom into the ocean floor

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Tech Startups Showcase Wares at Amsterdam Conferencei
    X
    Serginho Roosblad
    May 30, 2016 5:11 PM
    More than 20,000 tech enthusiasts, entrepreneurs and lovers of digital technology came together in Amsterdam recently at the Next Web Conference to discuss the latest developments in digital technology, look to the future and, of course, to connect. In recent years, there has been an explosion of so-called startup businesses that have created devices and applications that have changed the way we live; but, as Serginho Roosblad reports for VOA, there are pitfalls for such startups as well.
    Video

    Video Tech Startups Showcase Wares at Amsterdam Conference

    More than 20,000 tech enthusiasts, entrepreneurs and lovers of digital technology came together in Amsterdam recently at the Next Web Conference to discuss the latest developments in digital technology, look to the future and, of course, to connect. In recent years, there has been an explosion of so-called startup businesses that have created devices and applications that have changed the way we live; but, as Serginho Roosblad reports for VOA, there are pitfalls for such startups as well.
    Video

    Video US Military's Fallen Honored With Flags

    Memorial Day is a long weekend for most Americans. For some, it is the unofficial start of summer -- local swimming pools open and outdoor grilling season begins. But Memorial Day remains true to its origins -- a day to remember the U.S. military's fallen.
    Video

    Video Rolling Thunder Rolls Into Washington

    The Rolling Thunder caravan of motorcycles rolled into Washington Sunday, to support the U.S. military on the country's Memorial Day weekend
    Video

    Video A New Reading Program Pairs Kids with Dogs

    Dogs, it is said, are man's best friend. What some researchers have discovered is that they can also be a friend to a struggling reader. A group called Intermountain Therapy Animals trains dogs to help all kinds of kids with reading problems — from those with special needs to those for whom English is a second language. Faiza Elmasry has more on the New York chapter of R.E.A.D., or Reading Education Assistance Dogs, in this piece narrated by Faith Lapidus.
    Video

    Video Fan Base Grows for Fictional Wyoming Sheriff Longmire

    Around the world, the most enduring symbol of the U.S. is that of the cowboy. A very small percentage of Americans live in Western rural areas, and fewer still are cowboys. But the fascination with the American West is kept alive by such cultural offerings as “Longmire,” a series of books and TV episodes about a fictional Wyoming sheriff. VOA’s Greg Flakus recently spoke with Longmire’s creator, Craig Johnson, and filed this report from Houston.
    Video

    Video Chinese-Americans Heart Trump, Bucking National Trend

    A new study conducted by three Asian-American organizations shows there are three times as many Democrats as there are Republicans among Asian-American voters, and they favor Hillary Clinton over Donald Trump. But one group, called Chinese-Americans For Trump, is going against the tide and strongly supports the business tycoon. VOA’s Elizabeth Lee caught up with them at a Trump rally and reports from Anaheim, California.
    Video

    Video Reactions to Trump's Success Polarized Abroad

    What seemed impossible less than a year ago is now almost a certainty. New York real estate mogul Donald Trump has won the number of delegates needed to secure the Republican presidential nomination. The prospect has sparked as much controversy abroad as it has in the United States. Zlatica Hoke has more.
    Video

    Video Drawings by Children in Hiroshima Show Hope and Peace

    On Friday, President Barack Obama will visit Hiroshima, Japan, the first American president to do so while in office. In August 1945, the United States dropped an atomic bomb on the city to force Japan's surrender in World War II. Although their city lay in ruins, some Hiroshima schoolchildren drew pictures of hope and peace. The former students and their drawings are now part of a documentary called “Pictures from a Hiroshima Schoolyard.” VOA's Deborah Block has the story.
    Video

    Video Vietnamese Rapper Performs for Obama

    A prominent young Vietnamese artist told President Obama said she faced roadblocks as a woman rapper, and asked the president about government support for the arts. He asked her to rap, and he even offered to provide a base beat for her. Watch what happened.
    Video

    Video Roots Run Deep for Tunisia's Dwindling Jewish Community

    This week, hundreds of Jewish pilgrims are defying terrorist threats to celebrate an ancient religious festival on the Tunisian island of Djerba. The festivities cast a spotlight on North Africa's once-vibrant Jewish population that has all but died out in recent decades. Despite rising threats of militant Islam and the country's battered economy, one of the Arab world's last Jewish communities is staying put and nurturing a new generation. VOA’s Lisa Bryant reports.

    Special Report

    Adrift The Invisible African Diaspora