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While the Spanish government is perhaps successfully lowering the debt, fresh news about the debt of the regional and local authorities weighs on the Euro. And despite the high unemployment rate, negotiations with the unions collapsed. EUR/USD is moving lower.

A new report about the total debt of the regional governments (communities) in Spain, and the local municipalities, has shown a rise of 2.4% in 2010. It already reaches a total of 3.3% of the GDP.  

This comes as the Spanish government, shaken by the recent regional elections, has vowed that the debt to GDP ratio will be under 6%.

Is this part of the Spanish hidden debt?

In addition, negotiations between the socialist government and the unions have collapsed. The government wants more flexible laws. The unions feel they have more power now, with the protests and camp outs continuing in Madrid’s Puerta Del Sol, in Barcelona’s Plaça Catalunya and in many other Spanish cities.

EUR/USD is down under the 1.4450 line once again, now 1.4410. Support is at 1.4375. For more lines, see the euro to dollar forecast.

Yesterday, around the same hours, it was the downgrade for Greece from Moody’s that sent the pair down. Today in Greece, some of the ruling party’s members are opposing the new austerity measures from the government. This isn’t good news for those that hoped for another quick and temporary resolution.

 

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