Euro Zone Crisis
The euro zone crisis was triggered in 2009 when Greece's debts, left by its previous government, reached a record 300 billion euros, leaving the southern European economy with debt levels more than four times higher as a proportion of gross domestic product than the official euro zone cap of 60 per cent of GDP. Since the original problems were uncovered, Greece has been bailed out twice, and lenders have also had to rescue Ireland and Portugal. In the latter half of 2012. Cyprus also required a bailout.
Spain slips out of recession as exports drive recovery
Spain escaped from a two-year recession in the third quarter of this year with growth of 0.1 per cent, though unemployment remained extremely high, official data showed on Wednesday.
Strengthening exports drove the recovery in the euro zone’s fourth-biggest economy despite weak internal demand, the National Statistics Institute said in a statement.
The growth figure meant a technical end to the recession as measured in terms of contraction in output.
But economists warn of continuing challenges to recovery and expect unemployment to remain painfully high for years.
The unemployment rate was 25.98 per cent, a slight decline from the previous quarter but still one of the highest in the eurozone, according to separate INE data released last week.
It was Spain’s second recession in five years, sparked by the collapse of a building boom in 2008 which last year made the country a focus of concern for the stability of the whole eurozone.
Wednesday’s figures -- preliminary data from the institute which are due to be confirmed on November 28 – confirmed last week’s estimate from Spain’s central bank.
“While economic prospects are considerably better than a year ago, particularly in the external sector, domestic weakness is like to hold back any recovery in the wider economy,” said a report on Wednesday’s data from analysis group Capital Economics.
“We expect the unemployment rate to remain around its current high levels for some time yet and public debt to continue to climb.”
The Spanish government expects an overall contraction of 1.3 per cent for this year – slightly better than the 1.6 per cent last year –before a return to timid growth of 0.7 per cent next year.