Tha challenges of Spain
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Spain's story illustrates the fact that the eurozone's problems run far deeper than the issue of excessive borrowing by ill-disciplined governments.
1- After Spain joined the euro, the country experienced a long boom, underpinned by a housing bubble, financed by cheap loans to builders and homebuyers.
2- Spain's 17 regional governments collectively have large debts of their own.
They run and pay for most of their own services, including social services, health and education, with the central government in Madrid funding less than 20% of national spending.
3- Spain will be able to borrow up to 100bn euros. But it isn't a bailout or rescue, it insists.The help it gets will differ from the bailouts given to Greece, Portugal and Ireland in a number of ways.
4- Before the credit crunch, the banks had been thriving thanks to the rapid expansion of the property sector.
But its collapse caused a plunge in the value of the assets the loans were based on, and meant borrowers had trouble making repayments.
5- Although Prime Minister Mariano Rajoy has long insisted that Spain would not become the fourth eurozone country in recent years to ask for a full bailout, many commentators believe it is now only a matter of time before the government requests one.
1- After Spain joined the euro, the country experienced a long boom, underpinned by a housing bubble, financed by cheap loans to builders and homebuyers.
2- Spain's 17 regional governments collectively have large debts of their own.
They run and pay for most of their own services, including social services, health and education, with the central government in Madrid funding less than 20% of national spending.
3- Spain will be able to borrow up to 100bn euros. But it isn't a bailout or rescue, it insists.The help it gets will differ from the bailouts given to Greece, Portugal and Ireland in a number of ways.
4- Before the credit crunch, the banks had been thriving thanks to the rapid expansion of the property sector.
But its collapse caused a plunge in the value of the assets the loans were based on, and meant borrowers had trouble making repayments.
5- Although Prime Minister Mariano Rajoy has long insisted that Spain would not become the fourth eurozone country in recent years to ask for a full bailout, many commentators believe it is now only a matter of time before the government requests one.