Spanish Prime Minister Mariano Rajoy recently heaped a new round of harsh austerity measures on his country, announcing sweeping cuts and tax increases totaling €65bn in order to appease the troika enough for it to release another series of bailout packages to Spain. Previous austerity measures have crippled the Spanish economy and plunged it further into recession.
Unemployment is at 25 percent and Spain's economic crisis has been dragging on four five years. Perhaps more alarming is that it shows no signs of slowing down.
According to Reuters and Axesor, a record 2,564 Spanish companies filed for bankruptcy in the first quarter of 2013. This represents a 45% Y/Y increase in bankruptcy filings! Overall, almost 28,000 Spanish companies have filed for bankruptcy.
Austerity's effects on a demand-sapped economy is taking its toll by taking more demand out of the equation while also cutting aid to those hurt by the weakening demand. Let's hope Rajoy changes course soon.