Spain: 100 bln just a beginning
The situation in Spain is far from stable despite negotiations about a bail-out of around 100 Billion EURO. With more than 150 bln in debts, the regions add to the overall debt crisis. Millions of households aren’t able to pay back private debts. The credit crunch and rapidly growing social challenges add to the situation.
The proposed European fiscal union might become unprecedentedly challenged by the volume and the socio-economic dynamics in Spain. There are doubts that the Spanish economic and social challenges can be handled by European fiscal institutions and there is no political commitment of the Spanish government to quit fiscal sourveignity.
The basic systemic problems expressed by impressive export growth figures on the one hand and unemployment rates of more than 25% (in some regions up to 60%) on the other hand, show that the paradigms of the country’s crisis are very different to those of Greece.
There is no doubt that rapid reforms might help Spain to keep its standards as an industrialized society. But it is not sure how significant gaps in regional development, existing separatist movements, youth unemployment of 50% and the empty pockets of the public sector could be overcome to initiate recovery.
Like many other measures in the recent past the temporary ease provided by the European bail-out for Spain won’t give an answer to these questions. There are hardly doubts that more austerity might become explosive in Spain as frustration is already at the brink to explode.
On the other hand, a much different handling of the Spanish crisis than the one in Greece might bring new tensions in a Europe that is obviously out of balance.
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