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Spain’s problems add pressure on Europe’s leaders to accelerate crisis response

Spain’s economic problems are deepening, pushing the country closer to an international bailout that U.S. and European officials worry could destabilize the global economy.

The risk that the euro zone’s fourth-largest country may need a massive dose of outside help is forcing the region’s leaders to accelerate weighty decisions they had expected to consider over time. These include deciding whether the euro-zone countries should begin issuing bonds that they all jointly back, a step that would be aimed at reassuring investors skittish about lending money to troubled governments such as Spain’s.

Spain's borrowing costs are increasing.

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Spain’s borrowing costs are increasing.

But extended debate may fast become a luxury as economic activity in Spain slows, the cost of a banking-sector rescue rises and the euro zone’s uncertain future scares off investors.
The release Tuesday of discouraging figures on Spain’s retail sales and exports further contributed to the sense of the country’s fragility. And the resignation of Spain’s central bank head, a month ahead of schedule, highlighted the struggle to fix long-standing problems in the country’s financial sector.  Read More

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Posted on May 29, 2012, in #business news and tagged , , , , , , . Bookmark the permalink. Leave a comment.

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