Eurozone Waits: Will Spain Need Bailed Out Too? European finance ministers have approved a package of emergency loans for Greece worth $145 billion. But Greece is not the only European state with shaky finances. There are worries that Greece's problems will spread to Spain -- which has an economy five times the size of Greece.
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Eurozone Waits: Will Spain Need Bailed Out Too?

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Eurozone Waits: Will Spain Need Bailed Out Too?

Eurozone Waits: Will Spain Need Bailed Out Too?

Eurozone Waits: Will Spain Need Bailed Out Too?

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  • <iframe src="https://www.npr.org/player/embed/126468790/126468807" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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European finance ministers have approved a package of emergency loans for Greece worth $145 billion. But Greece is not the only European state with shaky finances. There are worries that Greece's problems will spread to Spain — which has an economy five times the size of Greece.

STEVE INSKEEP, Host:

We will have reaction from Athens in a moment. But Greece is not the only European state with shaky finances. NPR's Tom Gjelten is reporting from one of the other countries that is troubled, Spain. He's in Madrid. Hi, Tom.

TOM GJELTEN: Good morning, Steve.

INSKEEP: And what is the situation in Spain?

GJELTEN: Now, the problem for all of Europe is that Spain is five times bigger in terms of its economy than Greece. So, you know, remember we talked about banks that were too big to fail? Well, Spain might be a country that's too big to bail.

INSKEEP: And we're talking now about the situation that explains why people are so concerned about Greece, even though it's a very small economy, because it could affect other countries and not just Spain, right?

GJELTEN: And when private investors look at this situation, whether it's in Greece or Spain, they have to make a bet on how likely it is that these governments will be able to meet their obligations. And they make the same kind of judgments across various countries. Countries that have problems, whether it's Greece or Spain or Portugal, you know, will end up having to pay more. That is the danger here. That is the contagion that people here fear.

INSKEEP: And let's talk about Greece, which is at the heart of the matter for now. We mentioned a $145 billion rescue package. There's also austerity measures being called for in Greece. Is this going to be enough, Tom?

GJELTEN: That's the question, because you need to reassure investors. And we have to wait and see the market reactions.

INSKEEP: Well, now, what's at stake for the United States here?

GJELTEN: Finally, the issues of debt sustainability are ones that apply to the United States, if not tomorrow then a couple of years down the road.

INSKEEP: Okay. NPR's Tom Gjelten is in Madrid. Tom, thanks very much.

GJELTEN: Thank you, Steve.

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