|
Spain's grinding economic misery will get worse this year despitethe country's request for a European financial lifeline of up to€100bn to save its banks, Prime Minister Mariano Rajoy forecast yesterday. A day after the country conceded it needed outside help followingmonths of denying it would seek assistance, Mr Rajoy said moreSpaniards would lose their jobs in a country where one out of everyfour is already unemployed. "This year is going to be a bad one," Mr Rajoy said in his firstcomments about the rescue since it was announced. The conservative prime minister added that the economy, stuck inits second recession in three years, would still contract the previously predicted1.7pc even with the help. Small businesses and families starving for credit would geteventually relief as the funding propped up banks and theyincreased lending, but Mr Rajoy did not offer guidance on when. Spain became the fourth, and largest, of the 17 eurozone countriesto request a bailout -- a big blow to a nation that a few years agotook pride as the continent's economic superstar only to see itbecome the hot spot in the eurozone debt crisis. Its economy is the eurozone's fourth largest after Germany, Franceand Italy. Across the country, Spaniards reacted with a mixture of anger andrelief at the news. The amount of the rescue fund, if all is tapped, amounts to€21,000 of new debt for each person in the nation of 47million, where the average annual salary for those with work isabout the same amount, and the unemployment rate for those under age 25 is 52pc. The country is already reeling from deep austerity cuts that MrRajoy has imposed over the past six months that have raised taxes,made it easier to hire and fire workers, and cut deep intocherished government programmes, including education and nationalhealth care. Cuts "It's obviously a shame," civil servant Luisa Saraguren (44) said."But this bailout was fully predictable, and the consequences ofthis help are going to be a lot bigger compared to the cuts we'vebeen living with already." Mr Rajoy took pains to avoid the word bailout yesterday, sayingSpain's rescue package was a line of credit that its most troubledbanks would be able to tap with no outside control over governmentmacroeconomic policy like that imposed on Greece, Ireland andPortugal when their public finances were bailed out. He said interest rates on the loans would be considerably lowerthan the rate near 7pc that Spain had been forced to pay recentlyon the international debt markets. Spain would regain the economic credibility it has lost by shoringup its banks, which would result in credit being restored sobusinesses and individuals shut off from loans could startborrowing and the economy would grow again, Mr Rajoy insisted. Europe's widening recession and financial crisis has hurt companiesand investors around the world. Providing a financial lifeline toSpanish banks is likely to relieve anxiety on the Spanish economy,which is five times larger than Greece's, and on markets concernedabout the country's ability to pay its way. Spain's financial problems are not due to Greek-style governmentoverspending. The country's banks, particularly its savings banks or "cajas", gotcaught up in the collapse of a property bubble in 2008 that gotworse over the past four years. However, as Spain's leaders have struggled for a solution to theirbanking crisis, the country's borrowing costs have soared close tothe level that forced the governments of Greece, Portugal andIreland to seek rescues. - Alan Glendenning in Madrid Irish Independent. I am an expert from custom-popdisplays.com, while we provides the quality product, such as Cardboard Pallet Box Manufacturer , China Wooden Display Stands, Cardboard Counter Displays,and more.
Related Articles -
Cardboard Pallet Box Manufacturer, China Wooden Display Stands,
|
