Spain and yes, even Greece, are at it again. They are both testing the European Central Bank’s (ECB) patience. Spain is doing so by extending unemployment benefits for another six months for those who have been out of work for two years or longer.
Greece is pushing for more time to meet the strict austerity mandates in its ECB bailout package.
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Spain’s Prime Minister Rajoy extended the unemployment benefits out of fears of an uprising. Three years of severe recession and unemployment have Spanish citizens on edge. In an effort to meet mandates by the ECB, Rajoy implemented austerity measures even as his country’s economy worsened.
He and his party have lost popularity as a result. Rajoy has no choice but to ask the ECB for more help but this means he will also have to implement more austerity measures
, a condition the ECB has imposed for further assistance.
Greece, on the other hand, is trying to convince the ECB that it is fully capable of carrying out the stringent mandates imposed with its aid package, it just needs more time to do so. Greece’s failure to implement the mandated cuts is already yielding calls for Greece to leave the euro
The recession in Greece is the most severe and of the longest duration since World War II. So far, Greek agreement to austerity mandates in exchange for funding has been mostly talk and little action.