In Spain, a Bailout May Not Be Enough
The ECB bond-buying plan does little to right the economy
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European Central Bank President Mario Draghi’s plan to save the euro is about to have a test run. Spanish Prime Minister Mariano Rajoy appears ready to accept—not immediately, but soon—Draghi’s offer of a deal in which the bank would buy up Spanish debt in exchange for austerity and economic reforms.
It’s becoming clear, though, that Europe’s fourth-largest economy is in worse shape than people previously thought—and ECB bond buying won’t fix it. On Oct. 2, Madrid reported that unemployment rose in September for a second month, to 24.6 percent, despite earlier government assurances that joblessness had peaked.