A recent article in the Guardian unveils how Spain may be facing some serious issues in the years ahead.
“Spain might break the EU limit on national budget deficits for years after launching over 50 billion euros in fiscal and economic stimulus measures to fight recession, Economy Minister Pedro Solbes said on Friday.” The actual limit being 3 per cent of GDP. Are countries likeTurkey suddenly not looking like such poor candidates anymore, Mr. EU?
The facts are clear, 40,000 new unemployed every week (October figures) hitting a jobless rate of 12.8%. To combat unemployment as well as other spiraling problems the government is spending – to such an extent that it exceeds what it actually can spend – resulting in the inevitable deficit. The situation is not a nice one:
“There is nothing worse than having a scenario of economic recession combined with a very high public deficit,” Bank of Spain head of research Jose Luis Malo de Molina told reporters.”
And politicians are preparing the public as well. Zapatero confirmed on Friday: “The cost of the stimulus measures is a deficit that could rise as high as 4.2 percent of GDP, Zapatero said last week.” Are the golden years over for Spain?