Spain is no longer in a recession. They've gone straight into Depression with levels of distress not seen since shortly after the end of their civil war.
The primary source of Spain's economic problems is a housing bubble that, on a relative scale, was even bigger than America's.
The Madrid research group RR de Acuña & Asociados said the collapse of Spain's building industry will cause the economy to contract for the next three years, with a peak to trough loss of over 11pc of GDP....
RR de Acuña said the overhang of unsold properties on the market, or still being built, has reached 1,623,000 . This dwarfs annual demand of 218,000, and will take six or seven years to clear. The group said Spain's unemployment will peak at around 25pc, comparable to the worst chapter of the Great Depression.
Youth unemployment is at 38%.
Skyrocketing unemployment payments have added 3% of GDP to a total budget deficit of 8.1%. That's a huge problem, and not just because Spain's credit rating was cut in January, but also 3% is the peak deficit allowed in the European Union.
Combined private and corporate debt reached 230pc of GDP, funded by French and German savings.
This violation of the deficit limit has forced Spain to raise value-added taxes and taxes on savings despite a collapsing economy.
The collapsing economy and massive debt overhang is already causing prices to fall at 1.2% a year.
Falling prices, high unemployment and rising deficits look a lot like a Depression, but the clincher is this item:
Local communities have started to issue scrip currency known as "moneda social", based on reflation experiments tried by Austrian cantons in 1932 and more recently by Argentina.