Below are some key points from a New York Times article on some worse than expected problems in Spain:
Spain’s prime minister, Mariano Rajoy, already under pressure from his European counterparts to clean up Spain’s banks and public finances, failed on Thursday to ease what has recently turned into his biggest domestic political challenge — a separatist push by the nation’s most economically powerful region, Catalonia.
Just as Mr. Rajoy’s government finds itself on the front lines of the euro crisis, Catalonia, which accounts for almost a fifth of Spain’s economic output, has moved to the fore of Mr. Rajoy’s domestic challenges.
“The demands from Catalonia have developed a lot faster than anybody expected,” said Jordi Alberich, director general of the Cercle d’Economia, a Barcelona business organization. “A difficult crisis situation for Mr. Rajoy has just now got a lot more complex.”
Although Catalonia is not set to hold another regional election until 2014, the dispute with Mr. Rajoy is expected to convince Mr. Mas to call another election before the end of the year, in the hope that his Convergencia i Unió party could capitalize on recent opinion polls showing a rising majority in favor of independence.
The excerpt below is from a September 20 article in the Financial Times:
Spain has the fourth-biggest economy in the 17-nation eurozone, almost five times larger than that of Greece, and the 13th largest in the world. A failure on the part of European leaders to help Spain through its troubles, and a failure on Spain’s part to execute its ambitious economic reform plans, might wreck Europe’s monetary union and destabilize the global financial system.