Spain Is the Big Story

I know everyone’s focused on Greece, but today’s big story really is Spain.  For the first time, the interest rate on its ten-year bonds went over the magic number, 7%.  That’s the point at which Greece, Ireland, and Portugal had to get bailouts.  Spain’s economy is bigger than those three combined, so bailing out Spain would be a huge deal.

Italy’s interest rate went over 6% today.  Bailing out Italy, whose economy is bigger than Spain’s, would probably be impossible.  Italy is the third largest economy in Europe, after Germany and France.

3 comments on “Spain Is the Big Story

  1. Roni Jordan says:

    So I have a better credit rating than most of Europe, with fixed interest rates of 2.99-4.99% on credit cards.

  2. momshieb says:

    I don’t have much of an economics background, but this is very scary.

    • It is very scary — and very bad for Obama. It’s actually more about psychology than economics now. It’s about panic and doing too little too late to staunch it. Spain had a housing bubble, but they don’t have the daunting structural weaknesses of Greece. Spain actually makes stuff!

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