Spanish Economy Minister Luis de Guindos ruled out seeking a bailout hours before Standard & Poor’s cut the country’s credit rating to three levels above junk and a report showed unemployment jumped close to a record.
“Nobody has asked Spain, either officially or unofficially” to turn to Europe’s bailout mechanisms, he said in an interview in Madrid late yesterday. “We don’t need it.”
From Reuters:
Spain's unemployment rate shot up to 24 percent in the first quarter, the highest level since the early 1990s and one of the worst jobless figures in the world. Retail sales slumped for the twenty-first consecutive month.
Spain has slipped into its second recession in 3 years putting it back in the center of the Euro Zone debt crisis storm.
Official unemployment is at 24% (meaning that true unemployment is worse) and youth unemployment is at 52% (you know, the people that do the rioting). Austerity measures are putting more and more Spaniards out of work. I've never lived in Spain, but believe that when you're unemployed in Spain, you spend less than when you're employed. And when people spend less, businesses earn less and require less employees to work. You see where this is headed.
The US housing market crash devastated its economy. Ireland's housing market devastated its economy. Spain's housing market boom was bigger than both. It has yet to crash in all its glory. This is bad news for Spanish banks, which are connected to Eurozone banks, which are connected to US banks, which are all connected to the economies of their countries.
Spain doesn't need a bailout? Just wait.
Source: http://www.bloomberg.com/news/2012-04-27/spain-not-under-pressure-to-seek-bank-bailout-de-guindos-says.html
Source: http://www.msnbc.msn.com/id/47204596/ns/business-stocks_and_economy/#.T5uDG7POVLc
Source: http://www.economist.com/blogs/dailychart/2011/11/global-house-prices
Source: http://www.zerohedge.com/news/spanish-economy-crumbles-unemployment-nearly-25
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