News / Europe

Spain Hesitates Over Bailout Request

Markets Wait as Spain Hesitates Over Bail-Out Requesti
|| 0:00:00
X
October 05, 2012 11:06 PM
The Spanish government is deciding whether or not it needs emergency loans to help pay government debts, according to Deputy Economy Minister Fernando Jimenez. But as Selah Hennessy reports from London, most euro leaders and the financial markets hope the request will come soon.

Markets Wait as Spain Hesitates Over Bail-Out Request

Selah Hennessy
The Spanish government is analyzing its options before deciding on whether it needs a bailout, the Deputy Economy Minister Fernando Jimenez said Friday. But, most European leaders and the financial markets, are hoping the request will come sooner rather than later.  

This time last year all eyes were on Greece as Europe's economic weak link. But now the attention has shifted to Spain, the European Union's fourth largest economy. Many fear the country could default on its debts unless it gets a bailout from its euro neighbors.

The European Central Bank has offered to help struggling European economies by buying debt in the secondary sovereign bond markets.

That could help lower Spain's borrowing costs and might assure wary markets of stability among nations that use the euro currency. But first, Spain has to decide it wants to get the help.

Speaking in London, Spain's economy minister Luis de Guindos, admitted that Spain is in trouble.

"You are fully aware that we have a soaring debt crisis. Spain is the focus of attention about many of the problems that the eurozone is suffering. I would say even that the future of the battle of the euro is going to be waged in Spain," said de Guindos.

But de Guindos denied that his country needs a bailout. Many wonder if he is right.

Spain's economy plummeted when the local housing market bubble burst - leaving Spanish banks with over a billion dollars in bad loans.  

Now concerns are high that Spain is unable to keep the banks afloat while a gap in its national budget grows and the economic recession deepens.  Almost five million people are unemployed: One in four Spaniards out of work, the highest rate in the European Union.

But Iain Begg from the London School of Economics says Spain has reasons to avoid taking a bailout.

"Spain doesn't want to be put in a position of being told by Brussels how to run its economy so it's on a knife edge at the moment about whether it will seek a formal bail out," said Begg.

To make matters worse for the Spanish government, it is also facing internal dissent. The northern province of Catalonia, which represents one-fifth of the Spanish economy, is calling for independence after Spain rejected a demand to grant the region special fiscal powers.

Police clash with protestors during a demonstration against austerity measures announced by the Spanish government, at the parliament in Madrid, Spain, September 26, 2012.Police clash with protestors during a demonstration against austerity measures announced by the Spanish government, at the parliament in Madrid, Spain, September 26, 2012.
x
Police clash with protestors during a demonstration against austerity measures announced by the Spanish government, at the parliament in Madrid, Spain, September 26, 2012.
Police clash with protestors during a demonstration against austerity measures announced by the Spanish government, at the parliament in Madrid, Spain, September 26, 2012.
And in the capital, Madrid, mounting discontent over the stagnating economy and tough austerity has brought Spaniards out onto the streets in protest - with sometimes violent results. More demonstrations are expected in coming weeks.

Costas Lapavitsas from London's School of Oriental and African Studies recently wrote a book called "Crisis in the Eurozone," arguing that cash-strapped states should quit the euro. He says if Spain asks for a bailout it will be forced by Brussels to impose stringent austerity.

But Spain, he says, is already reeling from tough austerity and more of it will not do anything to improve the stagnating economy.

"Spain needs root and branch change. It needs a major investment strategy. It needs to do something about its productivity growth. It needs to do something about new sectors of the economy. It needs major economic transformation. It's not going about it the right way and not within the monetary union I'm afraid," said Lapavitsas.

With plenty of unknowns on the horizon, the European Council is set to meet later this month, when many hope some conclusive decisions will be made.

You May Like

Video Migrants Caught in No-Man's Land In French Port

The deaths of hundreds of migrants in the Mediterranean this week has only recast the spotlight on the perils of reaching 'Fortress Europe' More

Video Westgate Mall Attack Survivors Confront Painful Memories

On anniversary of terror attack, survivors discuss how they have coped with trauma they experienced that day More

New Hints That Dark Matter Exists

New evidence from International Space Station hints at existence of dark matter and dark energy More

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.
Migrants Caught in No-Man's Land Called Calaisi
X
Lisa Bryant
September 19, 2014 5:04 PM
The deaths of hundreds of migrants in the Mediterranean this week has only recast the spotlight on the perils of reaching Europe. And for those forunate enough to reach a place like Calais, France, only find that their problems aren't over. Lisa Bryant has the story.
Video

Video Migrants Caught in No-Man's Land Called Calais

The deaths of hundreds of migrants in the Mediterranean this week has only recast the spotlight on the perils of reaching Europe. And for those forunate enough to reach a place like Calais, France, only find that their problems aren't over. Lisa Bryant has the story.
Video

Video Westgate Siege Anniversary Brings Back Painful Memories

One year after it happened, the survivors of the terror attack on Nairobi's Westgate Shopping Mall still cannot shake the images of that tragic incident. For VOA, Mohammed Yusuf tells the story of victims still waiting for the answer to the question 'how could this happen?'
Video

Video Militant Assault in Syria Displaces Thousands of Kurds

A major assault by Islamic State militants on Kurds in Syria has sent a wave of new refugees to the Turkish border, where they were stopped by Turkish border security. Turkey is already hosting about 700,000 Syrian refugees who fled the civil war between the government and the opposition. But the government in Ankara has a history of strained relations with Turkey's Kurdish minority. Zlatica Hoke reports Turkey is asking for international help.
Video

Video CERN Accelerator Back in Business

The long upgrade of the Large Hadron Collider is over. The scientific instrument responsible for the discovery of the Higgs boson -- the so-called "God particle" -- is being brought up to speed in time for this month's 60th anniversary of the European Organization for Nuclear Research, known by its French acronym CERN. Physicists hope the accelerator will help them uncover more secrets about the origins of the universe. VOA’s George Putic reports.
Video

Video Whaling Summit Votes to Uphold Ban on Japan Whale Hunt

The International Whaling Commission, meeting in Slovenia, has voted to uphold a court ruling banning Japan from hunting whales in the Antarctic Ocean. Conservationists hailed the ruling as a victory, but Tokyo says it will submit revised plans for a whale hunt in 2015. Henry Ridgwell reports from London.
Video

Video Russian Economy Reeling After New Western Sanctions

A new wave of Western sanctions is hitting Russia’s economy hard. State-owned energy firms continue to bleed profits and Russia’s national currency plunged to a new low this week after the U.S. and the European Union announced new sanctions to punish Russia's aggressive stance in eastern Ukraine. But as Mil Arcega reports, the sanctions could also prove costly for European and American companies.
Video

Video Belgian Researchers Discover Way to Block Cancer Metastasis

Cancer remains one of the deadliest diseases, despite many new methods to combat it. Modern medicine has treatments to prevent the growth of primary tumor cells. But most cancer deaths are caused by metastasis, the stage when primary tumor cells change and move to other parts of the body. A team of Belgian scientists says it has found a way to prevent that process. Zlatica Hoke has more.
Video

Video Mogadishu's Flood of Foreign Workers Leaves Somalis Out of Work

Unemployment and conflict has forced many young Somalians out of the country in search of a better life. But a newfound stability in the once-lawless nation has created hope — and jobs — which, some say, are too often being filled by foreigners. Abdulaziz Billow reports from Mogadishu.
Video

Video A Dinosaur Fit for Land and Water

Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Video

Video Iraqi Kurdistan Church Helps Christian Children Cope find shelter in churches in the Kurdish capital, Irbil

In the past six weeks, tens of thousands of Iraqi Christians have been forced to flee their homes by Islamic State militants and find shelter in churches in the Kurdish capital, Irbil. Despite U.S. airstrikes in the region, the prospect of people returning home is still very low and concerns are starting to grow over the impact this is having on the displaced youth. Sebastian Meyer reports from Irbil on how one church is coping.
Video

Video NASA Picks Boeing, SpaceX to Carry Astronauts Into Space

The U.S. space agency, NASA, has chosen Boeing and SpaceX companies to build the next generation of spacecraft that will carry U.S. astronauts to the International Space Station by the year 2017. The deal with private industry enables NASA to end its dependence on Russia to send space crews into low Earth orbit and back. Zlatica Hoke has more.
Video

Video Future of Ukrainian Former President's Estate Uncertain

More than six months after Ukraine's former President Viktor Yanukovych fled revolution to Russia, authorities have yet to gain control of his palatial estate. Protesters occupy the grounds and opened it to tourists but they are also refusing to turn it over to the state. VOA's Daniel Schearf reports from Mezhigirya, just north of Kyiv.


Carnage and mayhem are part of daily life in northern Nigeria, the result of a terror campaign by the Islamist group Boko Haram. Fears are growing that Nigeria’s government may not know how to counter it, and may be making things worse. More

AppleAndroid