Spain is also experiencing an economic downturn, but according to financial experts, the situation is not as bad as it is in Greece.
Although Spain was once one of the biggest sources for jobs in Europe, its unemployment rate of 20.05% in 2010 is now the highest in the euro zone, and is a major problem for the country. This high percentage of jobless people is an obstacle for the government to cope with the economic stagnation.
According to Fernando Fernandez Mendez de Andes, a professor of economics at the IE Business School, the situation in the country is not as critical as that in Greece. As much as this fact is encouraging, Spain still must show growth to the financial markets in order to gain back its credibility, explained Fernandez (news.bbc.co.uk).
“I am concerned, that I see little movement and speed in this direction, so I am afraid that we may see a long period of economic stagnation in Spain, which will provoke a rather difficult social situation,” he added.
To help out the budget crisis, the Prime Minister Jose Luis Rodriguez Zapatero has a plan to cut the public sector salaries by 5%, and reduce pensions and regional government funding. According to him, this would save the country 15 billion euros for two years. He also said that “his own salary and those of senior cabinet members would be cut by 15%,” per news.bbc.co.uk.