Over the weekend, terms were reached for Spain to receive $125 billion in Euro supported bailout funds. The funds are designated to help the country's ailing banks. This appears to be a firewall attempt in case the Greek elections go bad on June 17th and cause further stress in the markets.
As Forbes reported, the bailout terms are largely unknown, but Spain certainly is going to need austerity soon. The country's debt to GDP ratio is projected to jump from 68% to over 80% this year and even more borrowing than before may be needed as the country's recession appears to be deepening.
The Wall Street Journal has good charts that describe how bad the economic issues are in Spain. They truly have not emerged from recession since 2008 (although they had under 1% growth in 2010 and 2011). The unemployment rate is at 25% which is the highest of the EuroZone (yes, that even tops Greece).
Spain's situation is beyond dire and it could be argued that Spain, like Greece is already in a depression. While markets will hail the news today, we need to be cautious. We've all heard this song and dance before.
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