The economic problems of Spain were put in strong relief after figures showed that unemployment is near 25 percent Friday.The figures showed that unemployment has spiked to 24.4 percent in the first quarter of 2012. Now people are afraid that France, the second-biggest eurozone economy, also could face a downgrade from S&P after the presidential elections.
A real big step was taken by the European Union Monday en route for structuring a strong financial firewall to prevent the spread of fiscal infectivity to major economies like Spain. The move came after Germany dropped its opposition to bringing the Continent’s total bailout capacity to more than 690 billion Euros.
All the 27 European leaders will also prepare the final sketch of another treaty that will look after sharply tightening fiscal discipline in the euro zone, called the fiscal compact that is designed to ensure another sovereign debt crisis does not happen in future. European leaders are in talks of signing off on both treaties on January 30, allowing the ESM to start operating from July.
Even as the economic depiction in the United States has brightened up recently with more positive employment figures, Europe remains held up in a slump. Most economists are estimating a recession for 2012, which will heighten the pressure faced by governments and financial institutions across the Continent.
After the European markets closing sharply high, the investors hope that the European Leaders will come to an agreement on a package with measures addressing the entire region’s debt crisis. They are meeting for a summit which is going to be held on the coming Wednesday. With DAX Germany rising to 3.6 percent, CAC France rising to 4.0 percent and FTSE MIB Italy rising 2.8 percent, it seems that the hope wave is catching speed.