LINDA WERTHEIMER, HOST:
It's MORNING EDITION, from NPR News. I'm Linda Wertheimer.
STEVE INSKEEP, HOST:
And I'm Steve Inskeep. Good morning.
Wall Street is closed on this Thanksgiving, and that's a break that may be welcome.
WERTHEIMER: After plunging again yesterday, the Dow is down more than four-and-a-half percent this week. Investors were uneasy about dismal sales at an auction of German debt.
INSKEEP: As you know, several European nations have debt problems, but Germany has the continent's strongest economy. Trouble there means trouble everywhere.
WERTHEIMER: In a moment, we'll hear how bond sales help us track the European debt crisis.
INSKEEP: We begin in a country with more immediate trouble than Germany: Spain, where the election of a new prime minister is not yet calming the markets. Lauren Frayer reports.
LAUREN FRAYER, BYLINE: Two days before he was elected as Spain's next prime minister, Mariano Rajoy made the rounds to Spanish talk radio stations.
UNIDENTIFIED MAN: (Spanish spoken)
FRAYER: One host asked him whether he thinks he'll have enough time to take office before Spain needs a bailout.
MARIANO RAJOY: (Spanish spoken)
FRAYER: I hope so, he said, and continued with a joke about how much time he'll have. Whoever wins needs a margin of time, he said, more than a half an hour.
Now it feels like he didn't get even that. With confetti still littering the sidewalk outside Rajoy's office, the markets have turned on him. Stocks are down and Spain's borrowing costs are pushing levels that sent Greece, Ireland and Portugal into bailouts. The problem is the new prime minister won't be sworn in for another few weeks. Fernando Fernandez is an economist at Madrid's IE Business School, who met recently with Rajoy.
FERNANDO FERNANDEZ: Under normal circumstances, he would not say a word until December 20th. He cannot do that. He doesn't have that luxury this time.
FRAYER: Fernandez thinks Rajoy should name potential government ministers who will get to work even before they're officially sworn in. Otherwise, he says Rajoy might find himself talking to the IMF on his very first day on the job.
FERNANDEZ: The party themselves, and the population, is in for a rude awakening. You have one choice. You either do an IMF adjustment program, or the IMF will do it for you.
FRAYER: Rajoy was elected with a huge majority, but he's had no time to sit back and enjoy victory. He's got market pressure on one side and the Spanish people on the other. They've got limited appetite for much more austerity. School teachers have been on strike, and youth unemployment here is at 46 percent. And then there are the indignados, Spain's precursor to Occupy Wall Street.
(SOUNDBITE OF LAUGHTER)
FRAYER: Protest leaders are huddled in a squatters' hotel in downtown Madrid, ready to mobilize the moment Rajoy announces any major cuts. Indignados like Norma, who didn't want her last name used out of fear of arrest, are expecting confrontations with police.
NORMA: There are going to be more protests, and also the police are going to be strong. But we don't have fear.
FRAYER: Last week, Rajoy's deputy admitted she also expects street protests, once the public gets wind of the austerity measures Spain's new conservative leaders have in store. Those plans could calm financial markets for now, but probably not the Spanish people.
For NPR News, I'm Lauren Frayer in Madrid. Transcript provided by NPR, Copyright NPR.