Spain Facing A Financial Catastrophe

The escalating economic woes in Spain have led to demands for Brussels to reduce Madrid's deficit targets. Analysts argued that the European Commission should use its economic strategies, due to be unveiled today, to extend Spain's debt reduction timetable and re-focus on growth. Photo: Bloomberg News

Spain In A State Of 'Total Emergency' -- The Telegraph

Spain is in a state of 'total emergency', the country’s former prime minister has warned, with Madrid facing punitive borrowing costs and the prospect of needing a Greek-style bail-out.

Felipe González, the country’s elder statesman, said: “We’re in a situation of total emergency, the worst crisis we have ever lived through.”

Global financial markets lurched yesterday at the spectre of the eurozone’s fourth biggest economy being locked out of international capital markets and being unable to fund itself.

Spanish borrowing costs soared, while the Madrid stock market fell 2.6 per cent, the euro sank to a 22-month low against the dollar and the price of Brent crude dropped 2 per cent.

Meanwhile, global investors fled to “safe havens” sending UK bonds to another low. The FTSE 100, however, dropped 1.7 per cent, along with European and American stockmarkets.

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More News On Spain's Financial/Debt Crisis

Investors flee Spain as financial crisis spirals -- AFP
Europe Fears Bailout of Spain Would Strain Its Resources -- New York Times
Europe Fears Bailout of Spain Would Strain Its Resources -- CNBC
Spain bank fears send bond yields to euro-era high -- Bloomberg Businessweek
Spain cries for help: is Berlin listening ? -- Reuters
Spain banking crisis – German U-turn on eurozone bailout pot seems a fair bet -- The Guardian
FAQ: Why is Spain now in crisis? And can it be fixed? -- Washington Post
Spain: When will the crisis bottom out? -- RT

My Comment: This is what happens when a government just borrows and borrows money until the day comes when the lenders say enough is enough .... now is the time to pay us. This is where Spain is at this moment ..... and with the banks reserves and regional governments budget projections collapsing .... I just cannot see them paying off their debts. Unfortunately for all of us .... if Spain does financially collapse ..... they will not only destroy the euro .... but they would also produce a financial crisis that would make the 2008 Lehman collapse pale and insignificant in comparison.