Why Spain Is Officially Europe’s Biggest Crisis

(Reuters)By Matthew O’Brien – Spain has a problem. It’s running out of money.

More precisely, it’s running out of euros. It can’t print them. It can’t borrow them, except at ruinous rates.

A bit of background. Spain was, as Paul Krugman colorfully put it, the Florida of Europe. It had a prodigious housing bubble that has subsequently gone into reverse. But that’s where the similarities end. Spain is on its own. Florida isn’t. Remember, Florida doesn’t pay for its social insurance spending or bank bailouts. The federal government does. Social Security checks keep coming and the FDIC keeps taking over failing banks regardless of the state of Florida’s finances. Spain doesn’t have that safety net. That’s how you get 25 percent overall unemployment and over 50 percent youth unemployment. more> http://tinyurl.com/7on9xk3


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