Spain’s Great Recession 2008-2014 Reply

youth unemployment protest

Curious about the Spanish economic crisis? This Wikipedia article will bring you quickly up to date. One of the most egregious consequences of the recession is the 50% youth unemployment rate.

Wikipedia.org–The Great Recession in Spain[1][2] began in 2008 during the world financial crisis of 2007–08. In 2012 it made Spain a late participant in the European sovereign debt crisis when the country was unable to bailout its financial sector and had to apply for a €100 billion rescue package provided by the European Stability Mechanism (ESM). The main cause of Spain’s crisis was its enormous housing bubble and the accompanying artificial and unsustainably high GDP growth rate. One side effect was that ballooning tax revenues (from the artificially high GDP growth rate) concealed the Spanish government’s expenditures, which were unsustainably high, until 2007.[3] The Spanish government supported the critical development by relaxing supervision of the financial sector and thereby allowing the banks to violate International Accounting Standards Board standards. So the banks in Spain were able to hide losses and earnings volatility, mislead regulators, analysts, and investors, and thereby finance the Spanish real estate bubble.[4] The results of the crisis were devastating for Spain, including a strong economic downturn, a severe increase in unemployment, and bankruptcies of major companies.[5]

Even though some fundamental problems in the Spanish economy were already evident far ahead of the crisis Spain continued the path of unsustainable growth when the ruling party changed in 2004. In these early times Spain had already a huge trade deficit,[6] a loss of competitiveness against its main trading partners, an above-average inflation rate, house price increases, and a growing family indebtedness.[7]

Read more on Wikipedia.com: Spain’s Great Recession 2008-2014

Spanish unemployed youth

The sign translates, “No house, no work, no pension, no fear.”

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s