Issues with the euro along with increased unemployment rates have left Spain in a bind. The country's financial minister Luis de Guindos has cautioned that the euro is at stake as the weeks progress.
"I don't know if we are on the edge of a cliff, but we are in a very, very difficult position," de Guindos said to The Guardian. "The future of the euro is going to play out in the next few weeks in Spain and Italy."
Spain's budget minister Cristóbal Montoro Romero has also warned other European countries that if Spain is left to suffer a downturn due to continued inability to pay debts, that they too will suffer incredibly.
"Who holds our external debt?" Montoro asked. "You will understand that those who are most interested in things going well for Spain are the creditors. Or do you think they don't want to get their loans back? I can assure you that they do."
Spain's financial dilemma persists as they search for funds to save Bankia, a failed lender. They are also desperate to find finances to aid governments within the region that cannot raise their own funds.
UBS investment research recently found that the banking division within Spain may need even more aid. There is discussion about whether there is also a need for Spain's bailout funds to kick in.
Deficits faced by Spain are predicted to further increase unemployment rates in Europe.
Francois Cabau, an economist at Barclays Capital, told Reuters, "This 11 percent level is going to continue edging up in the coming months and probably until the end of the year. The economic activity situation tells you the story of the labor market. There's been basically no economic growth since the fourth quarter of last year."
At a recent event in Catalonia, Luis de Guindos suggested that the European Union form a solid banking union. He recommended that steps be taken as soon as the end of June.
