After Greece and Portugal, Spain has now emerged as one of the problematic nations in terms of debt crisis with growing bailout requests for banks in its financial system. Though the European Central Bank (ECB) is assumed to fix the ongoing crisis, analysts believe that there is not sufficient fund in the system to actually prevent the debt ridden regions via bail outs and actually prevent the possible defaults. At this point of economic downturn, all the monetary authorities like ECB, International Monetary Fund and Federal Reserve are having extreme concerns about the consequences of possible default, “what if, if it actually happens”?

Economists warn that the consequences of sovereign default may actually devastate the entire global economy and critically injure the international financial system as a whole. Regarding ongoing issues related with actual debt default, the effect and correlation of lenders or suppliers of funds with the economic growth and recession are being scrutinized at minute level, with some even pointing out on the applicability of single currency, i.e. not putting all eggs in the same basket, because each member countries in the ‘single currency nation’ are performing at different capacities.

It is anticipated that the ongoing crisis will eventually affect the credibility and structure of the Euro. At this moment, as the nations face acute crisis vis-a-vis Spain, are more focusing on austerity measures, the measures is actually not being supported by ‘the people’ and are coming against these reforms with series of protests, eventually hurting the sentiments of the economy and national credibility at an international arena. As countries like Spain, Portugal and Greece, the core members of Euro-zone, are coming up with different economic measures to prevent further degradation, commodities market, interest rate regimes, and stock indices and most importantly exchange rate movements are the areas to be affected along with further economic events in these nations. At this point of time, the entire world market is just predicting the possible path of entire Euro-zone and its competitiveness at the international market.