The Spanish economy shrank by 0.1% in the last quarter of 2009 making it the last major economy in recession.
Spain, Europe’s fifth largest economy, has the highest rate of unemployment in the eurozone with 44% of under 25’s out of work and total unemployment of nearly 20%.
Although the Spanish government is predicting a return to growth in the second half of 2010 but many financial analysts are sceptical and the International Monetary Fund predicts a shrinkage of 0.6% in 2010, at odds with the Spanish government’s prediction and in contrast to predicted growth in the eurozone of 1%.
Attempts by the Spanish government to introduce polices based on supporting domestic demand have basically failed and unemployment continues to rise.
There are many who feel that once the Greek situation has been resolved, Spain will be the next to cause financial concern within the community.
The troubled and heavily indebted nations of the European Community are known by the acronym PIGS – Portugal, Ireland, Greece and Spain.