SPAIN: Hard Times

On top of the stark warning by Commerce Minister Alberto Ullastres that something drastic must be done to save the Spanish economy (TIME, June 15), 50 small and medium-sized factories in hard-hit Barcelona announced a “suspension of payments,” a legal state just this side of actual bankruptcy that defers debt payments and allows a company to lay off help (otherwise forbidden by law). In a land where newspapers print no unpleasant news, word spread that the big (3,000 employees) Euskalduna shipyard and the Basconia steel mill in Bilbao were also about to lay off their work forces, and so was Madrid’s leading steel company.

The U.S. last week gave Spain another $22.6 million in aid. But it was a loan long in the works and earmarked mostly for Spain’s ailing railroads, and it was a mere drop in a leaky bucket.