Bracing for Bailouts Which EU Problem Child Will Be Next?

First came Greece, then there was Ireland. The EU is gaining experience in helping out their member states' failed economies. But how long can that last? SPIEGEL ONLINE takes a country-by-country look at the nations on the brink.

A general strike in Spain in September: Will the euro rescue package be enough in the end?

A general strike in Spain in September: Will the euro rescue package be enough in the end?

By Ferry Batzoglou, Michael Braun, , , and

Fear is spreading in Europe. How many countries are going to need bailouts -- and how many billions of euros will that take? And is the entire euro alliance at risk?

After Greece had to be rescued with a spectacular aid action earlier this year and then Ireland earlier this week, it is no longer a quest of if another country will require a bailout, but when. Most experts are in agreement that Portugal will be the next country to require assistance, despite denials from Lisbon.

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Photo Gallery: Who Will Get Europe's Next Bailout?
But what scares those who deal with euro policy the most is the situation in Spain. The €750 billion program set up by the European Union and the International Monetary Fund for dealing with the euro crisis may be enough to cover Greece, Ireland and Portugal without problems, but there could be problems if a bailout is needed for Spain, which is Europe's fourth-largest economy.

On Wednesday, Spain's government took pains again to assuage fears. "An abyss separates Ireland from us," Deputy Finance Minister Jose Manuel Campa told the Spanish daily El Pais. However, his comments didn't seem to move the financial markets. Interest yields on 10-year Spanish government bonds rose to over 5 percent for the first time since 2002. Speculators fear the risk of bankruptcy in the country has increased.

But how dramatic is the situation? What differentiates Spain from Ireland? And everyone knows about the risks, but haven't there also been reform successes this year? An overview of Europe's five crisis countries:

Discuss this issue with other readers!
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Trojan Horace 11/28/2010
1. Bailouts
Agree with the analysis - plus talking the Euro down helps Germany's exports to the US - which need help while the US is printing an extra $60 billion every month... But if the domino effect spreads to Spain and joke will wear a bit thin. Spain is worth a great deal more of the EU's GDP than Ireland or Greece. It might be more prudent to stop the rot now
Norberto_Tyr 11/28/2010
2. The problem is not the kids but the kindergarten, ...
The problem is not the kids but the kindergarten, namely that abstract entity called European Union or Eurogarten. According to the Maastrich treaty, Eurogarten should be providing a strict diet of veggies, milk, fruit and meat to raise the kids under its care healthy and happy, but in practice the diet is full of lollies, sugar, chocolate and air stuffed ice-cream (courtesy of Margaret Thatcher to prevent melting away). I do not envy Merkel's position, even though I have confidence on her skills and analysis, this is a time to think strategically, not time to rush, the great opportunity of our times lies in a wonderful and uncommon situation, namely the chance to choose your friends. France and the UK already chose to go together as per the XX century, and it is not surprising, they are both in the slippery down path albeit with nuclear capabilities, nevertheless, how important this would be in the future is to be seen. On my part I see fresh water and food the key commodities of the XXI century in the same way oil was in the previous one; thus some ubiquitous characters have been positioning themselves accordingly since some time ago even though undetected by untrained eyes. But I am optimistic, there is a solution lying on two principles: 1- sovereignty; and 2- jurisdiction, the very principles trampled systematically for the last 50 years by the follies of the UN, IMF, World Bank, European Union, international financial system, and so forth. For instance, if I need to lend my hose to a neighbor because his house is in flames, this very act do not mean that we have to live in a communal association for the rest of our lives. With this puerile excuse we ended up with the concept of 'global village' without even noticing, even more, it is as if that concept were the result of natural evolution and not deliberate social engineering. The fact that the slogan is more greener and apparently milder now: 'global village' and not 'proletarios del mundo: unios !' is rather irrelevant, a mere historical accident, after all the plan is about universal government and universal jurisdiction, and the Eurogarten is a long step in that direction. There are other alternatives, take for instance South America, we are all Catholic countries (nominally), we all speak Spanish or Portuguese, but the carnival and the currency, and the music and art, and infinite different ways and styles of life are abysmally different in Argentina and Brazil, for instance, which does not diminish the will of the two countries to form a strong and mature regional alliance based on the two principles: sovereignty; and jurisdiction. In my view, the major evil of the XX century was the imposition of a universal pseudo culture by the most uncultured and ignorant of all nations riding a technology they were utterly incapable to develop themselves. We must avoid that at all cost. Norberto
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