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.–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]



Spurred by Pope, Spanish Catholic Church Confronts Sexual Abuse Reply

Priestly contrition Granada, Madrid (AFP) — Spain’s Catholic Church, which has long been accused of silencing cases of priests sexually abusing children, is starting to take a hard line against offenders, spurred by Pope Francis. A judge in the southern city of Granada on Tuesday charged 10 priests and two Catholic lay workers with sexually abusing altar boys in their care, or being complicit in such acts, from 2004 to 2007. It is the biggest and most serious paedophilia case involving members of the Catholic Church known so far in Spain.

The case was brought to light by a former altar boy, now 25 and a member of the Catholic institution Opus Dei, who wrote to the pontiff to say he had been molested. Pope Francis called the unidentified man to offer the Church’s apology and in November the pontiff said he had ordered a church investigation into the case, saying it had caused him “great pain”. The young man who wrote to the pope “never imagined the issue would take on the significance that it did,” his lawyer, Jorge Aguilera Gonzalez, told AFP. “If it wasn’t for the pope’s intervention, it would still have been an important issue, but just one of many.”


Spanish Premier Accused of Knowing about Slush Fund Payoffs Reply

Mariano Rajoy Spain

Spanish premier Mariano Rajoy, accused of slush-fund knowledge, MADRID (AP) — The former finance chief for Spain’s ruling political party has accused Prime Minister Mariano Rajoy of having full knowledge about a slush fund that allegedly financed payoffs for party members. Luis Barcenas made the declarations to reporters who mobbed his every public movement after his release on bail from a prison. He was jailed when the scandal surrounding the scheme erupted in 2013.

Barcenas said Friday that Rajoy knew about the scheme “from the beginning” and that party officials received regular payoffs. Rajoy and his Popular Party have denied the claims. Deputy Prime Minister Soraya Saenz de Santamaria declined comment on the latest declarations by Barcenas, noting he faces fraud and money laundering charges.


What is Going On in Spain? Reply

Politicos culpables Spain

Vicente Navarro writes for–Something is happening in Spain. A party that did not exist one year ago, Podemos, with a clear left-wing program, would win a sufficient number of votes to gain a majority in Spanish Parliament if an election were held today. Meanwhile, the leaders of the group G-20 attending their annual meeting in Australia were congratulating the president of the Spanish conservative-neoliberal government, Mr. Mariano Rajoy, for the policies that his government had imposed. (I use the term “imposed” because none of these policies were written in its electoral program.)

These included: (1) the largest cuts in public social expenditures(dismantling the underfunded Spanish welfare state) ever seen since democracy was established in Spain in 1978 and (2) the toughest labor reforms, which have substantially deteriorated labor market conditions. Salaries have declined by 10% since the Great Recession started in 2007, and unemployment has hit an all-time record of 26% (52% among the youth). The percentage of what the trade unions defined as “shit work” (temporary, precarious work) has increased, becoming the majority of new contracts in the labor market (more than 52% of all contracts), and 66% of unemployed people do not have any form of unemployment insurance or public assistance.


Spain’s Judges Working on Corruption Cases Involving 2,000 People Reply

Princess Cristina lawyers

Lawyers of Spain’s Infanta Cristina attend to media after she testified in front of judge Jose Castro over tax fraud and money-laundering charges in Palma de Mallorca February 8, 2014. They later accused the judge of “corruptela.”

Damien Sharkov writes for–Spanish judges will begin 2015 by dealing with a backlog of corruption cases left unresolved from last year, totalling at 150 according to Spanish daily newspaper El Pais which called the upcoming court proceedings “an inheritance from the past”. Several of these cases involve high profile persons and groups of defendants with European news agency Europa Press estimating the eventual verdicts will determine the fates of more than 2,000 people facing corruption charges.

Among these cases is the infamous ‘Gurtel’ case against Spanish businessman Francisco Correa which allegedly implicates Spain’s ruling Partido Popular (PP) in bribery, tax evasion and money laundering. The total amount of public funds allegedly lost is estimated at no less than €120 million.

Also implicated in corruption charges and awaiting trial are Spain’s Princess Cristina, sister of King Felipe VI, alongside her husband Iñaki Urdangarin. Throughout 2014 issues of corruption at the highest level of Spanish authority became a leading issue in the country, causing widespread disenchantment with politics and public institutions and  being reflected in the meteoric rise of grassroots, anti-establishment party Podemos, which is currently ahead the polls, despite being less than a year old.


Spanish Princess Cristina to Face Tax Fraud Trial Reply

Princess Cristina Urdangarin

The Spanish king’s sister, Princess Cristina, is to face a tax fraud trial over alleged links to her husband’s business dealings.

It is the first time for modern Spain to put a royal in the dock to face trial. Her husband Inaki Urdangarin is accused of embezzling millions in public funds with a former business partner. The couple deny wrongdoing. Prosecutors in Palma, Majorca, say Mr Urdangarin’s sports foundation misused public money. It is alleged that €5.6m (£4.6m; $7.5m) of public money went missing from the Noos Institute, a charitable sports foundation, when Mr Urdangarin was in charge of it.

Princess Cristina, 49, is under suspicion over €2.6m of that money. She is the sister of King Felipe VI, and youngest daughter of the former king, Juan Carlos. The allegations relate to business affairs in 2007-2008.

The affair has cast a long shadow over the Spanish royal family since the investigation was launched in 2010. Mr Urdangarin and his then business partner, Diego Torres, allegedly used the Noos Institute to organise events for the regional governments of Valencia and the Balearic Islands at hugely inflated prices.


Spanish Political Corruption: A Lot of Bad Apples Reply

Francisco Granados indicted

A wave of arrests upends the political establishment–José Angel Fernández Villa led the biggest miners’ union in northern Asturias. Francisco Granados was a key minister in the Madrid region. Jordi Pujol was president of Catalonia for 23 years. The three men have one thing in common: they all allegedly hid large sums of money in secret foreign bank accounts. The accounts, unveiled during a rash of recent arrests and investigations, are the tip of an iceberg of corruption that now threatens to sink the Spanish political establishment. Until this week the prime minister, Mariano Rajoy, and other mainstream Spanish politicians were sailing blithely towards it. Now they are scrambling for the lifeboats.

Mr Granados was one of 51 people arrested on charges of bribery and embezzlement on October 27th, including six sitting mayors. Most, like Mr Granados, belong to Mr Rajoy’s centre-right Popular Party (PP). But the main opposition party, the Socialists, faces corruption scandals too. So do the governing coalition in the region of Catalonia and the country’s two largest trade unions, the Unión General de Trabajadores and the Comisiones Obreras. The PP is the worst sinner. A former interior minister, Angel Acebes, is being probed for his role in a funding scandal that has already sent the party’s treasurer, Luis Bárcenas, to jail. Rodrigo Rato, a former finance minister and head of the IMF, allegedly used company credit cards to top up his salary…


Spanish Authorities Arrest 51 Politicians in Anti-Corruption Sweep Reply

Anti-corruption protesters Madrid

A day after PM Mariano Rajoy played down scale of corruption in Spain, members of his party were among those arrested

Ashifa Kassam in Madrid writes for The–Dozens of public officials, bureaucrats and business leaders have been arrested across Spain as part of a wide-ranging corruption investigation, just a day after the prime minister, Mariano Rajoy, downplayed the scale of graft in the country. Speaking on Sunday, Rajoy sought to depict the issue as a case of a few bad apples and one that must not define Spain. Noting that the justice system was doing its job, he said, “a few small incidents isn’t the same thing as 46 million people nor all of Spain”. Less than 24 hours later, 51 people – including top members of Rajoy’s ruling People’s party (PP) – were arrested as part of an investigation into “a network of corruption” that involved contracts worth roughly €250m (£197m), the country’s anti-corruption prosecutor’s office said on Monday.


Catalan Politician’s Tax Fraud Overshadows Independence Campaign Reply

Jordi Pujol conman

Irish–The revelation that the self-styled godfather of Catalan nationalism, Jordi Pujol, hid a fortune (two billion euros at last estimation) in tax havens for decades has thrown the region’s governing party into turmoil and threatened to undermine its campaign for independence from Spain. Pujol (84), who governed Catalonia for 23 years as leader of the Convergència Democràtica de Catalunya party, issued a statement on July 25th in which he admitted he had only just declared to tax authorities an inheritance he received in 1980. “I admit all this with much pain, due to what it means for me and my family,” Mr Pujol said, adding that media speculation about his finances had prompted the move.