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Spain's economy in crisis

The French daily Les Echos comments on the economic crisis in Spain: "In economics all miracles come to an end and all models have their pitfalls. For too long, Spain was bolstered by the construction sector, which accounted for up to ten percent of the nation's wealth. ... Today the Spanish economy is revealing its weaknesses and proving those economists right who for years expressed concern. The cocktail of falling real estate prices and drying-up loans is particularly explosive for budgets because in Spain most mortgages are coupled to a variable interest rate. ... Dwindling growth and rising unemployment could ... soon put an end to generous public spending. [But] even if the situation deteriorates further we should keep things in perspective. A weak opposition and greater international clout should make it easier for Zapatero to steer the economy."

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