If Spain’s crisis deepens Europe’s recession, it could tip the entire world economy into a stubborn slump. The ramifications would be enormous, including: reduced odds of Barack Obama’s reelection, assuming a weaker U.S. recovery; less political cohesion and more social unrest in Europe (even now, the European Union’s unemployment rate is 10.2 percent); and growing pressures in many countries for economic nationalism and protectionism.
Spain is suffering a hangover from what economist Desmond Lachman of the American Enterprise Institute calls “the mother of all housing booms.”
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Filed under: * Culture-Watch Globalization * Economics, Politics Economy Consumer/consumer spending Corporations/Corporate Life Credit Markets Currency Markets Euro European Central Bank Housing/Real Estate Market Labor/Labor Unions/Labor Market The Banking System/Sector The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- * International News & Commentary Europe --European Sovereign Debt Crisis of 2010 France Germany Greece Italy Spain
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