Sunday, May 20, 2012

First Greece, Now Spain

Don't worry, the Spanish government is saying all is well. (Seems I've heard that before...) Spain reeling over financial fears: 'Will my money be safe?' ask customers in Madrid banks - Telegraph
The central bank announced late that evening that the level of bad loans on the books of Spanish banks was at an 18-year high, fuelling concerns about the financial sector in the eurozone's fourth-largest economy.

Then the finance ministry said late on Friday that the deficit could reach 8.9 percent of GDP after four of its 17 regions overshot their expected budgets.

And with Greece looking ever more likely to drop off the cliff and exit the eurozone, it is now Spain which has the unwelcome distinction of being in the centre of the euro firestorm.
None of this is helped by the fact that Spain, like Greece, is in recession. Well, not quite. One quarter of contraction doesn't make a recession, but that is the direction things are headed.

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