Spain announced on Monday that, for the second time in three years, its economy has fallen into a recession.
The National Statistics Institute said the economy shrank 0.4 percent compared to the first quarter of 2011. Meanwhile, unemployment has climbed to more than 24 percent, with youth unemployment soaring at 50 percent.
At the same time, property prices are plunging at a staggering 7.2 percent annual rate.
Standard & Poor’s rating agency recently downgraded Spanish debt by two full notches, and borrowing rates have surged above 6 percent for the Spanish government. With the economy officially in shambles, rioting is now becoming common.
Spain looks to be on the fast track to crisis, following in the footsteps of Greece. At this juncture in the ongoing euro crisis, any bailout is essentially a German move. Other national economies are too strained to contribute their share. To understand how Spain’s deteriorating economy could become a landmark catalyst to Germany’s rise, read “Will Germany Ride to Europe’s Rescue?” ▪