March 24, 2012- Most financial analysts still do not think Spain reached the level of financial crisis that Greece had. However, they feel that Spain has financial problems ahead of them. Mariano Rajoy, Spain’s Prime Minister said the country would not make its financial goals it had agreed to with the European Commission.
The country had agreed with the Commission to reduces is deficit to 4.4% of the gross domestic product of the country. Nevertheless, Rajoy said his country could only reduce its deficit to 5.8% of their GDP.
Rajoy is also putting together a budget for Spain that will rely on the economy in the country shrinking by 1.7% during 2012. Citigroup however, recently announced that the economy in Spain would shrink 2.7 % in 2012 and 1.2% the following year.
Unemployment in the country is dangerously high at 25%. Over 5.3 million people are without work. Over 1.6 million families in Spain spent the entire year of 2011 without any member of the family working an official job.
Analysts say the math does not add up and Spain will require some sort of bailout in the future. Personal economic problems abound in the country, but it is even more important that the government in Spain remains solvent.
Just on Friday, the cost of the government borrowing jumped from 5% to 5.5% due to the yields on its 10-year bonds. Cheap loans from the Central Bank of Europe have helped some Spain banks to stay afloat.