Spain’s Economy Minister Luis de Guindos told Frankfurter Allegemeine Zeitung that his nation will be able to make its budget targets. His government has already implemented huge austerity measures, most of them which have angered Spain’s powerful labor unions. The ability of the government to fulfill its promises to its neighbors will depend to a large extent on labor cooperation. Unemployment in Spain is over 22%, and among the young it is closer to 50%.
de Guindos claims that his government will also not require any outside aid. This is actually unlikely. A recession has swept over the nations, many of its states are in severe financial trouble, as are most of the large banks.
Recently, Spain has had to pay high yields on its bonds, due to skepticism among capital markets investors about the nation’s finances. The yield on 10 year notes at a recent auction was 5.81%, the highest level since December. Spain cannot sustain this level and hope to bring down its deficits as well.
de Guindos is dreaming if he things Spain will not need to tap emergency bailout funds