Spain holds Europe's fate in its hands in 2011, say analysts - Channel NewsAsia: "For financial markets the doomsday scenario in 2011 starts with Spain buckling under its debt and unleashing a Europe-wide crisis that dwarfs anything seen so far in Greece or Ireland.
Financial analysts disagree on the likelihood of such a Spanish sovereign debt crisis but they agree the risk is real and that existing European and international rescue mechanisms would be unable to cope.
In part to avert just such an outcome, Prime Minister Jose Luis Rodriguez Zapatero's Socialist government is slashing spending to lower the public deficit from 11.1 per cent in 2009 to 3.0 per cent in 2013.
He vowed in an end-of-year address Thursday to meet his targets. And many in the markets believe the plan is credible, especially coupled with announced sales of big stakes in the national lottery and airport operator.
Spain's government has repeatedly stressed that the accumulated public debt is below the European Union limit of 60 per cent of annual output, or gross domestic product. It rose to 57.7 per cent of GDP at the end of September from 53.2 per cent at the end of 2009."
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