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Spanish: Crisis

The document summarizes the Spanish financial crisis that began in 2008. It discusses how Spain enjoyed an economic boom after joining the eurozone but then faced a recession in 2008 that sent unemployment soaring. A property bubble from 1996-2007 also contributed to issues, as home prices rose 200% and families took on large mortgages. The crisis has hurt regional governments, led to weak growth prospects with over 50% youth unemployment, caused bank bailout worries as the fifth largest bank needed billions, increased debt dependency on domestic holders of government bonds, and led to growing public anger over austerity measures.

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Jaime Forero
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48 views15 pages

Spanish: Crisis

The document summarizes the Spanish financial crisis that began in 2008. It discusses how Spain enjoyed an economic boom after joining the eurozone but then faced a recession in 2008 that sent unemployment soaring. A property bubble from 1996-2007 also contributed to issues, as home prices rose 200% and families took on large mortgages. The crisis has hurt regional governments, led to weak growth prospects with over 50% youth unemployment, caused bank bailout worries as the fifth largest bank needed billions, increased debt dependency on domestic holders of government bonds, and led to growing public anger over austerity measures.

Uploaded by

Jaime Forero
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Spanish Crisis

Jaime Forero C.
“ "España puede salir de la crisis,
no hay una maldición bíblica."
José María Aznar
1.
Intro
A picture is worth a
thousand words
•Spain enjoyed a long
boom after joining the
euro zone -highest rate
of homeownership

•Spain continued the


path of economic
growth when the ruling
party changed in 2004,
despite some obvious
fundamental problems
in the economy
Origins

•The recession in 2008 sent Spain’s unemployment rate


soaring

•The 2008–2012 Spanish financial crisis began as part of


the world Late-2000s financial crisis and continued as part
of the European sovereign debt crisis According to the
Financial Times - Spain's huge trade deficit , the "loss of
competitiveness against its main trading partners" and, also
an inflation rate which had been traditionally higher than
those of its European partners
Property bubble
The residential real estate bubble
saw real estate prices rise 200%
from 1996 to 2007.
issues

€651 billion is the current House ownership in Spain is


mortgage debt (second quarter above 80%. The desire to own
2005) of Spanish families (this one's own home was
debt continues to grow at 25% encouraged by governments in
per year – 2001 through 2005, the 60s and 70s, and has thus
with 97% of mortgages at become part of the Spanish
variable rate interest) psyche.
5
reasons
for
spain's
financial
crisis
Hurting regional
goverments

During Spain's property boom, the


country's 17 semi-autonomous
regions raked in unprecedented
revenues from building permits and
fees. They windfall to finance
infrastructure projects and the ranks
or public employees swelled. Across
Spain, highways, parks, public
swimming pools, gleaming
government buildings and airports
sprung up.
Weak growth
prospects

While one out of every four


Spaniards are unemployed, the rate
for job-seekers under 25 stands at
52 percent. Emigration by young
adults is on the rise, and companies
are taking advantage of new labor
reforms that make it cheaper to fire
workers.
Bank bailout worries

The concerns circling


Spain's shaky banks
intensified in May
when Bankia, the
country's fifth-largest
lender, unexpectedly
announced it would
need (EURO)19 billion
to cover its toxic
property loans and
assets.
Debt dependency

The bank bailout has


only made investors
more worried about
Spain's financial
position. Two-thirds of
Spain's government
bonds are held by the
country's banks,
pension funds and
insurance companies -
that's 50 percent
higher than last year.
Growing public anger
Since beating former
Socialist Prime
Minister Jose Luis
Rodriguez Zapatero in
the polls late last year,
Prime Minister
Mariano Rajoy has
been introducing
successive rounds of
austerity measures
aimed at preventing
the country from being
forced into a public
finance bailout.
1,137,852,716.00 €
In 2016, public debt reached 101% of GDP.

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