FXstreet.com (London) - In the last several weeks the strength of the Eurozone has been severely rocked, leading the market to question the sovereign debt risks of numerous EU states. Ratings agencies last week downgraded their views on Greece and Spain, judging both economies as more likely to default than previously represented, and questioning the ability of the respective governments to put things right in a timely fashion.

Throughout the last decade Spain has been riding the wave of bulging tourism and demand for property. So highly leveraged in property was the Spanish economy that when the credit crisis hit, unemployment topped out at a staggering 24%.

Unemployment in Spain currently stands around 19% but is largely expected to rise over 20% in 2010. Prime minister, Jose Zapatero, has made clear his recognition of the problem, pledging to reduce budget deficit as a matter of priority above other economic goals.

A massive level of unemployment has knock-on effects for consumer spending, which is expected to drop year-on-year over the Christmas period.

Should a central economy into Europe fall to a similar fate as Greece (currently in political, social and economical distress), Italy or Spain for instance, fingers may begin to point to a failing on the Euro and an ill-functioning currency.

EUR/USD currently trades at 1.4637/9 midway through the Asian session. The pair hit 1.4586 lows last week as markets started to wonder what other states might have bad debts hidden under the carpet.