ECONOMIC BLUES

SPANISH Prime Minister Rodriguez Zapatero is facing the biggest fight of his political career and his adversaries are nothing less than the money market speculators. There is a feeling in the financial market, especially in Wall Street, that Spain could follow Greece and Ireland and need a major European Union bailout. Prime Minister Zapatero was forced yesterday to deny that Spain would need additional cash to balance the books but still the rumours continue. It is a nasty situation, it is like being surrounded by a pack of wolves who are ready to pounce at the slighest scent of blood. It wasn´t long ago that Spain was an economic powerhouse and there was talk of it replacing Canada in the G8. The credit crisis and the end of property boom severely damaged the Spanish economy and now Spain suffers. The biggest problem with the Spanish economy is that there are 4.5 million unemployment and this is a major drain on Spain´s limited economic resources. I believe that Zapatero will survive and that Spain will not need a bailout of enormous proportions. But if it does then the euro-zone is going to come under great pressure and Spain could enter a period of great economic uncertainty.