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European sovereign debt crisis. Crisis in Spain. The presentation was performed By the pupils of 11”C” form Khanyan Artiom Lefterov Savva, Teacher of Economics Rafalskaya Irina European sovereign-debt crisis • The European sovereign debt crisis (often referred to as the Eurozone crisis) is an ongoing financial crisis that has made it difficult or impossible for some countries of euro zone to repay or refinance their government debt without the assistance of third parties European sovereign debt crisis • Causes of the crisis varied by country. European Sovereign debt crisis • Concerns intensified in early 2010 and thereafter, leading European nations to implement a series of financial support measures such as the European Financial Stability Facility (EFSF) and European Stability Mechanism. European Central Bank • European Central Bank (ECB) has also took part by lowering interest rates and providing cheap loans of more than one trillion Euros to maintain money flows between European banks. Crisis in Spain • Spain had a comparatively low debt level among advanced economies prior to the crisis. Crisis in Spain • The bank bailouts and the economic downturn increased the country's deficit and debt levels and led to a substantial downgrading of its credit rating. Crisis in Spain • Nevertheless, in June 2012, Spain became a prime concern for the Euro zone when interest on Spanish 10-year bonds reached the 7% level and it faced difficulty in accessing bond markets. Crisis in Spain • As on October 2012, the Troika (EC, ECB and IMF) is indeed in negotiations with Spain to establish an economic recovery program, which is required if the a bailout package for the sovereign state from ESM. Reportedly Spain, in addition to the €100bn "bank recapitalization" package arranged for in June 2012, now also seeks sovereign financial support from a "Precautionary Conditioned Credit Line" (PCCL) package. Crisis in Spain According to the latest debt sustainability analysis published by the European Commission in October 2012 nation debt rate amounted to 85,3% GDP.