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News Summary: Why is Spain in economic trouble?

Associated Press
Protesters demonstrate against the country's near 25 percent unemployment rate and stinging austerity measures introduced by the government, in Madrid, Spain, Saturday, July 21, 2012. (AP Photo/Andres Kudacki)
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COMPLEX PROBLEM: Spain's financial crisis is a lot like peeling an onion: remove one troubled layer and you expose another. Repeated efforts since 2009 by successive governments to fix the country's problems have managed to undermine confidence in the fourth-largest economy among the 17 nations that use the euro.

THE BACKGROUND: A recession is deepening in Spain and a growing number of its regional governments are seeking financial lifelines. The government is struggling to prop up its banking system. Spain's main IBEX stock index has lost 3 percent over the last three days. The government's borrowing costs are at their highest since the country joined the euro in 1999.

NOTHING SEEMS TO HELP: Spain finally got approval from the other 16 members of the eurozone to access loans to prop up its banks. But interest rates have kept rising. Instead of easing off, investors panicked again.

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