Book of the Month

Europe's Crisis Spotlight Shifts to Spain

By Matthew Phelps, Bloomberg News, May 31, 2012

As Greece prepares for a June 17 election that may determine whether it exits the euro, the attention has shifted to Spain, where the problems are different—and much larger. Greece’s troubles stem from excessive government borrowing; Spain suffers from a property bust and its banks remain crippled by an estimated €184 billion ($230 billion) in troubled real estate assets. The government is struggling to devise a rescue plan as the country grapples with a deepening recession and 24 percent unemployment.

Prime Minister Mariano Rajoy insists his country doesn’t need a bailout, though investors say otherwise. The cost of insuring Spanish sovereign debt rose to a record high on May 30, and yields on Spain’s 10-year bonds climbed close to the 7 percent level that led Greece, Ireland, and Portugal to seek bailouts from the European Union and the International Monetary Fund. Considering that Spain’s economy is almost twice as big as those of Greece, Portugal, and Ireland combined, the country poses the biggest test for European authorities yet [....]

Also see:

Spain capital flight doubles as risk of European bailout rises
By Andrés Cala, Christian Science Monitor, June 1, 2012

Capital flight from Spain has doubled to a new record and the country has demanded the European Central Bank recapitalize its teetering financial system, warning that the alternative is a broader bailout that could rock the European economy [....]

and:

Bund, Treasury, Gilt Yields Drop to Records as Euro Crisis Grows
By David Goodman and Keith Jenkins, Bloomberg News, June 1, 2012

German, U.S. and U.K. yields fell to all-time lows after Spanish Economy Minister Luis de Guindos said the future of the euro is at stake, driving demand for the safest government securities [....]

Read the full article at http://www.businessweek.com/articles/2012-05-31/europes-crisis-spotlight-shifts-to-spain?r=read

Eurozone unemployment at record high 11%
By Chris Isidore @CNNMoney June 1, 2012: 8:57 AM ET

[....] There were 24.7 million unemployed in the EU in April, of whom 17.4 million were in the eurozone. Both figures are far above the 12.7 million unemployed in the United States, which has a population about 6% less than the eurozone. [....]

The U.S. May jobs report, also released Friday, showed that U.S. employers added 69,000 jobs, while unemployment ticked up to 8.2%. While both results were much worse than the forecasts of economists surveyed by CNNMoney, who had been expecting 150,000 new jobs to keep unemployment at 8.1%, it was far better than Europe's job picture.

While the unemployment rate in the United States has been falling steadily over the last seven months before Friday's report, it's been climbing across Europe. The unemployment rate for March for the 17 nations that use the euro was also raised to 11% in Friday's jobs report from the initial reading of 10.9%, while the March reading for the EU was 10.2% [....]

Uh, let's look at how much US employment has been "falling steadily" say since beginning of 2012. A bit of difference, but 8.5% back up to 8.2% in the last 5 months isn't such a descent

 

Latest Comments