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EU Economists predict that Spain's level of debt is about to double since the start of the sovereign debt crisis, which looks likely to put the country at risk of being affected by the bailout of Greece.
EU leaders met yesterday in an attempt to find a solution to save Greece from default
At the start of the crisis Spain held 40% of GDP in public debt, compared with an average 70% for the Eurozone as a whole. Estimates are that in 2013 the figure for Spain will rise to 78%, with the Eurozone average climbing to 91%. The figure for Italy alone is expected to top 119%.
In 2001 Moody's credit ratings agency gave Spain a rating of Aaa and Italy Aa3, but today both carry an A3 rating. By comparison, Malaysia and the Bahamas and South Africa are the only other countries carrying an A3 rating.
With the IMF expecting to see Spain slip into another recession in 2012, with the economy shrinking by 1.7%, making it almost impossible for the country to meet it's budget defecit goals of 8% for 2011, 6.8% for 2012 and 6.3% for 2013.
Spanish national debt is also expected to increase further still following the Government's offerto inject 175 billion euros into the banking system to help lenders make provisions against bad loans linked to real estate assets.
A meeting on the goals between Spain and its European partners has been scheduled following the publication of EU commission growth forecasts on Feb. 23, Economy Minister Luis de Guindos confirmed last week.
EU Economic and Monetary Affairs Commissioner Olli Rehn last week called upon Spain to confirm the exact austerity measures it will take further to the 15 billion euros of tax increases and spending cuts announced at the end of last year.