To understand the severity of the ongoing economic crisis in Europe, we have to look at the previous recessions and crises and put them into context. Viewed that way, Spain's 20.5 unemployment rate is suddenly not astounding; it is actually quite comparable to the unemployment rate Spain experienced following the 1993-1994 recession (24.12 percent). Meanwhile, the 1980s and 1970s recessions were exemplified by double-digit inflation that crushed the European consumer under high prices. This does not mean that the austerity measures being enacted will not have considerable social and political effects; they will. However, the probability that 2011 will see severe political instability that leads to regime change, as opposed to merely political change, is low. This year could bring political and social fissures that could ultimately lead to such change, which is why STRATFOR will be observing European political evolution carefully.
