A few months after Greece gave the world a scare with its debt crisis, the worst it seems is NOT over. After Greece, it seems that Spain will now follow its EU neighbor in asking for a bailout.
Reports out of Madrid say that members of the International Monetary Fund (IMF) are in Spain after the Spanish government asked for a bailout. When Greece got into trouble, a lot of people said that some other members of the E.U. were in the same position as Greece. Unfortunately, it seems the doomsayers were right.
However, it’s not all doom and gloom for Spain. The Spanish government seems to know the position it’s in and reports said that the government are willing to enforce reforms on its rigid job market to revive their economy.
Frankly I’m not sure if that’s the way to go because Spain’s problems are more due to the collapse of its property market than anything else. Their unemployment rate may be more than 20%, but it was actually holding steady till the property collapse. Once the property market collapsed, the unemployment rate shot up.
The underlying problem for Spain is in their property market. Still, at least the government is going something. Here’s hoping what they are doing will work.