Spain ready to ask for bailout?
Spain may be finally prepared to bite the bullet and request a Euro zone bailout. Spain will possibly request a euro zone bailout for its public finances as early as next weekend but Germany has signalled that it should hold off, recommending the Iberian country to hold out for any external aid. The latest twist in the eurozone’s three-year-old sovereign debt crisis comes as financial markets and some other European partners are pressuring Madrid to seek a rescue programme that would trigger European Central Bank buying of its bonds.
Unemployment in the eurozone hit a fresh high of 18.2 million in August, the EU statistics agency has said. The number out of work rose by 34,000, meaning the unemployment rate remained at a record high of 11.4%. The highest unemployment rate was recorded in Spain, where 25.1% of the workforce is out of a job, and the lowest of 4.5% was recorded in Austria. Youth unemployment remains a particular concern, with the rate among under-25s hitting 22.8% across the eurozone, and 52.9% in Spain and 50% in Greece. The eurozone as a whole is also struggling to generate the economic growth needed to stimulate employment. Its economy shrank by 0.2% between April and June, with Italy and Spain stuck in recession and France registering no growth for the past three quarters.
The quarterly survey by the British Chambers of Commerce (BCC) showed that domestic and export demand slowed as the government’s austerity drive and the euro zone debt crisis weighed, another sign that a meaningful economic recovery remains elusive. Most economists reckon official data will show that Britain posted some economic growth in the third quarter, rebounding after an extra national holiday in the previous quarter and helped by sales of tickets for the London Olympics. But a vigorous return to health is seen as unlikely despite the Bank of England’s efforts to boost the economy with a total of 375 billion pounds worth of asset purchases.
In the US, manufacturing activity gained after three months of contraction, according to the ISM’s monthly survey. The index gained to 51.5 last month, from 49.6 in August, driven by a jump in new orders (a reading above 50 signals growth).The data came as other surveys showed weak manufacturing readings for Europe, the UK and China
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