Eurozone Crisis Spreads, USD Gains
Many European Investors believe the Euro crisis are about to spread to Spain and Portugal, after Greece took a hard hit in the beginning of the month. The Euro have taken a hard hit and lost over 6 % against the Euro the last weeks. Are Europe just in the beginning of the crisis, while US are on their way out?
Spain deny lost budget control
“We have control of the ship, we have a plan,” said María Teresa Fernández de la Vega, Spain’s deputy premier. Earlier the same day, the prime minister José Luis Rodríguez Zapatero, visited Washington
where he was confident about his home country: “Spain has a strong and solid financial system.”
Well, all are not as confident. Both Madrid and Lisbon ran up their budget deficits to dampen the effects of the economic crisis and partly because of fears for eurozone cohesion.
Spain has over 19 % unemployment rate at the moment, and there are many doubts about the Spanish economy. The Spanish shrank 0.1 per cent in the fourth quarter of last year, the seventh successive quarter of contraction.
“In a country with such high unemployment, how will it be possible to reduce the public deficit?” asked Prof Toribio. “Spain does not have clear sources of economic recovery, which has to come from either internal or external demand.”