SPAIN is one of the few European Union countries which is still in recession and there are major fears that that state of the Spanish economy could even drag down the euro. France and Germany have already had to bail out Greece and there is a strong possibility that they may have to do the same with Spain. With four million unemployment and an enormous budget deficit Spain is in severe trouble and the economic policies of Prime Minister Rodriguez Zapatero has done little to revive the economy.
There is further bad news on the horizon because the Zapatero government has been forced to raise the VAT rate on all consumer products which could mean that the green shoots of recovery could be severely hit as public spending drops again. It is a major turn-around for Spain whose economy was once a powerhouse in Europe and it is now threatening to bring down the euro. Everywhere you turn there is bad news and at the moment there are no real signs of a revival in the construction or tourist industry. Opposition leader Mariano Rajoy is calling for the resignation of Prime Minister Zapatero because of the economic crisis. What is needed at the moment in Spain is all party support for an economic aid package.