LOS ANGELES, CA (Catholic Online) - Pressed into severe austerity measures in order to stay afloat, massive crowds have taken to the streets to protest conservative Spanish Prime Minister Mariano Rajoy's budget cuts and emergency measures. In Madrid, the country's capitol, thousands have demonstrated against education and health care spending cuts in Madrid.

Hopes are fading that the government will be able to cut its budget deficit as predicted. That nation raises the specter that the country might be locked into an ever downward financial spiral.

Suffering from 24.4 percent unemployment and a deficit of 8.5 percent as of the end of 2011, Spain must reduce to 3 percent in 2013.

Investors fear that Spain will not be able to support its banks, which already suffer from massive amounts of bad loans from an imploded property market. Rescuing Spain, the fourth-largest economy in the 17-country eurozone, may exceed the reach of the continent's bailout funds. The Spanish crisis may actually have some people longing for the days of the Greek crisis.

Standard & Poor lowered its rating for 11 Spanish banks, already loaded with bad debt from a collapsed housing market.

The Spanish people, however, have cast off the notions of austerity which many consider to be the only option out of certain economic ruin. Thousands of Spaniards poured out into the street to protest Germany's proposed emergency reforms.

"With Spain's largest unions leading marches involving thousands of protesters in 55 cities yesterday, Prime Minister Mariano Rajoy's government battled to prevent Spain from becoming the next country to seek a bailout," Bloomberg reports.

 "Watching Spain now is exactly like watching Ireland around October 2010 before Ireland was forced into its bailout," Megan Greene, a senior economist at Roubini Global Economics LLC, told Bloomberg Television's "Street Smart."

"The government can't win no matter what it does," she adds.

German Chancellor Angela Merkel is standing firm. She declares she is not backing down from EU's "fiscal pact."

"There will be no new negotiations on the fiscal pact," Merkel told the Leipziger Volkszeitung in an interview published last month. Merkel has long maintained that the eurozone financial crisis can't be solved without cutting debt.

Many analysts expect the EU's anti-austerity protests to grow much larger in the coming months.

© 2012, Distributed by NEWS CONSORTIUM.