News / Europe

    Spain Hesitates Over Bailout 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 Democrats Clinton, Kaine Offer 'Very Different Vision' Than Trump

    Party's presumptive presidential nominee, her vice presidential pick deliver optimistic message in Florida as they campaign for first time together

    Turkey Wants Pakistan to Close Down institutions, Businesses Linked to Gulen

    Thousands of Pakistani students are enrolled in Gulen's commercial network of around two dozen institutions operating in Pakistan for over two decades

    AU Passport A Work in Progress

    Who will get the passport and what the benefits are still need to be worked out

    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.
    In State of Emergency, Turkey’s Erdogan Focuses on Spiritual Movementi
    X
    July 22, 2016 11:49 AM
    The state of emergency that Turkish President Recep Tayyip Erdogan has declared is giving him even more power to expand a purge that has seen an estimated 60,000 people either arrested or suspended from their jobs. VOA Europe correspondent Luis Ramirez reports from Istanbul.
    Video

    Video In State of Emergency, Turkey’s Erdogan Focuses on Spiritual Movement

    The state of emergency that Turkish President Recep Tayyip Erdogan has declared is giving him even more power to expand a purge that has seen an estimated 60,000 people either arrested or suspended from their jobs. VOA Europe correspondent Luis Ramirez reports from Istanbul.
    Video

    Video Scientists in Poland Race to Save Honeybees

    Honeybees are in danger worldwide. Causes of what's known as colony collapse disorder range from pesticides and loss of habitat to infections. But scientists in Poland say they are on track to finding a cure for one of the diseases. VOA’s George Putic reports.
    Video

    Video Wall Already Runs Along Parts of US-Mexico Border

    The Republican Party’s presidential nominee, Donald Trump, gained the support of many voters by saying he would build a wall to keep undocumented immigrants and drugs from coming across the border from Mexico. Critics have called his idea impractical and offensive to Mexico, while supporters say such a bold approach is needed to control the border. VOA’s Greg Flakus has more from the border town of Nogales, Arizona.
    Video

    Video New HIV Tests Emphasize Rapid Results

    As the global fight against AIDS intensifies, activists have placed increasing importance on getting people to know their HIV status. Some companies are developing new HIV testing methods designed to be quick, easy and accurate. Thuso Khumalo looks at the latest methods, presented at the International AIDS conference in Durban, South Africa.
    Video

    Video African Youth with HIV Urge More Support

    HIV, the virus that causes AIDS, is the top killer of teens in sub-Saharan Africa. But many youths say their experience with the virus is unique and needs to be addressed differently than the adult epidemic. VOA South African Correspondent Anita Powell reports.
    Video

    Video Poor Residents in Cleveland Not Feeling High Hopes of Republican Convention

    With the Republican Party's National Convention underway in Cleveland, Ohio, delegates and visitors are gathered in the host city's downtown - waiting to hear from the party's presidential candidate, Donald Trump. But a few kilometers from the convention's venue, Cleveland's poorest residents are not convinced Trump or his policies will make a difference in their lives. VOA's Ramon Taylor spoke with some of these residents as well as some of the Republican delegates and filed this report.
    Video

    Video Pop-Up Art Comes to Your Living Room, Backyard and Elsewhere

    Around the world, independent artists and musicians wrestle with a common problem: where to exhibit or perform? Traditional spaces such as museums and galleries are reserved for bigger names, and renting a space is not feasible for many. Enter ArtsUp, which connects artists with venue owners. Whether it’s a living room, restaurant, office or even a boat, pop-up events are bringing music and art to unexpected places. Tina Trinh has more.
    Video

    Video With Yosemite as Backdrop, Obama Praises National Parks

    Last month, President Barack Obama and his family visited some of the most beautiful national parks in the U.S. Using the majestic backdrop of a towering waterfall in California's Yosemite National Park, Obama praised the national park system which celebrates its 100th anniversary this year. He talked about the importance of America’s “national treasures” and the need to protect them from climate change and other threats. VOA’s Julie Taboh reports.
    Video

    Video Counter-Islamic State Coalition Plots Next Steps

    As momentum shifts against Islamic State in Iraq, discussions are taking place about the next steps for driving the terrorist group from its final strongholds. Secretary of State John Kerry is hosting a counter-IS meeting at the State Department, a day after defense ministers from more than 30 countries reviewed and agreed upon a course of action. VOA Pentagon correspondent Carla Babb reports.
    Video

    Video Russia's Participation at Brazil Olympic Games Still In Question

    The International Olympic Committee has delayed a decision on whether to ban all Russian teams from competing in next month's Olympic Games in Brazil over allegations of an elaborate doping scheme. The World Anti-Doping Agency recently released an independent report alleging widespread doping by Russian athletes at the 2014 Winter Olympics in Sochi. So far, only Russian track and field athletes have been barred from the Summer Games in Brazil. VOA's Zlatica Hoke has more.
    Video

    Video Scotland’s Booming Whisky Industry Fears Brexit Hangover

    After Britain’s vote to leave the European Union, Scotland’s government wants to break away from the United Kingdom – fearing the nation’s exports are at risk. Among the biggest of these is whisky. Henry Ridgwell reports on a time of turmoil for those involved in the ancient art of distilling Scotland’s most famous product.
    Video

    Video Millennials Could Determine Who Wins Race to White House

    With only four months to go until Americans elect a new president, one group of voters is getting a lot more attention these days: those ages 18 to 35, a generation known as millennials. It’s a demographic that some analysts say could have the power to decide the 2016 election. But a lot depends on whether they actually turn out to vote. VOA’s Alexa Lamanna reports.

    Special Report

    Adrift The Invisible African Diaspora