EU socialist economies in trouble?
The decline of Spain is bad news for the Obama administration because that country has embraced more state control of the economy as well as the green energy business. They have delivered much of what Obama wants and it has made things worse. The evils of socialism are coming home to roost, Obama's former minister might say.
Angela Merkel moved to halt the deepening crisis in the euro yesterday by pledging German support for a controversial Greek bailout package.
Despite her actions, fears that the shockwaves from Greece's debt crisis were spreading to the continent's other ailing economies grew after the credit rating agency Standard and Poor's downgraded Spain's rating. The risk of a wholesale collapse in the value of government bonds issued by the weaker eurozone nations is now becoming more real, and threatening the fragile recovery across the EU.
The German Chancellor promised support for Athens after an urgent crisis summit in Berlin with the heads of the International Monetary Fund and the European Central Bank – the two key architects needed for any Greek rescue deal – as markets tried to recover from a dramatic slide sparked by the Greek debt.
The decision on Spain reflects concern that is potentially far more significant than the warnings about Greece and Portugal, both comparatively small Eurozone economies. Spain, by contrast, is the fourth-largest zone's economy behind Germany, France and Italy.