This article describes the debt problem in Spain. Private debt is a bigger problem than government debt. The article uses the example of ACS, which is one of the world's largest construction services company, to illustrate the private debt problems in Spain. ACS is a euro 28 billion business that is being forced to sell off assets in order to service its debt. Some of its debt is the result of acquisitions, but half of its revenue comes from Spanish projects. Those projects are in trouble because 70% of the revenue had come from government projects which have been imperiled by the imposition of austerity. Investors are shorting ACS's stock and its equity has dropped substantially. Obviously, ACS and other large firms in Spain with debt problems, are not investing in new projects. Unemployment is over 20% and tax revenues are falling faster than cuts in government spending. Spain's debt to GDP ratio is more likely to increase than to fall.
Spain's total private and public debt relative to GDP, along with that of Ireland which also suffers from the bust in the real estate bubble is the highest in the eurozone. Japan and the UK are the only countries in the world with higher total debt to GDP ratios.
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