Spain’s Economic Condition Continues to Worsen Since Great Recession of 2008
Spain’s economic condition continues to worsen since Great Recession of 2008
Spain, after enjoying two decades of economic growth from joining the European Union, is still suffering from the global rescission in 2008. Spain experienced a long boom fueled by low interest rates that created a real estate bubble. When this bubble burst in 2008, as part of the global recession, Spain was hit hard with soaring unemployment (especially those under 25), weak banks, a budget deficit and growing debt. Spain has been unsuccessful in managing its financial crisis since the Great Recession of 2008. Spain has taken measures to try and right the ship and get the country’s economy back on track but most of these actions taken have failed to make any significant improvements. One of the methods Spain has attempted is through austerity. Although many would argue that if a country is to stick to the polices of austerity they will began to regain solvency, this has not been the case in Spain where the social cost of austerity is taking its toll at the same time as foreign investors unload their Spanish bond holdings (Thomas Jr. 2012). Although the government is spending less of its budget it is cutting jobs, salaries, pensions and benefits. If Spain sticks to this policy it should help less the deficit but Spain has continued to miss its deficit lowing goals and now Spanish bond ratings are being slashed (Thomas Jr. 2012). While the government cuts back on public spending the deficit increases and Spanish bonds are becoming less attractive to foreign investors, meanwhile the unemployment rate continues to rise to euro zone highs. Unemployment in Spain is a major issue and is reaching near 25% and there seems to be no end in sight that these numbers have reached a peak. While the problem of unemployment is growing the government is doing little to nothing to help or try and combat these alarmingly growing numbers, in fact through austerity policies are actually helping to
Spain, after enjoying two decades of economic growth from joining the European Union, is still suffering from the global rescission in 2008. Spain experienced a long boom fueled by low interest rates that created a real estate bubble. When this bubble burst in 2008, as part of the global recession, Spain was hit hard with soaring unemployment (especially those under 25), weak banks, a budget deficit and growing debt. Spain has been unsuccessful in managing its financial crisis since the Great Recession of 2008. Spain has taken measures to try and right the ship and get the country’s economy back on track but most of these actions taken have failed to make any significant improvements. One of the methods Spain has attempted is through austerity. Although many would argue that if a country is to stick to the polices of austerity they will began to regain solvency, this has not been the case in Spain where the social cost of austerity is taking its toll at the same time as foreign investors unload their Spanish bond holdings (Thomas Jr. 2012). Although the government is spending less of its budget it is cutting jobs, salaries, pensions and benefits. If Spain sticks to this policy it should help less the deficit but Spain has continued to miss its deficit lowing goals and now Spanish bond ratings are being slashed (Thomas Jr. 2012). While the government cuts back on public spending the deficit increases and Spanish bonds are becoming less attractive to foreign investors, meanwhile the unemployment rate continues to rise to euro zone highs. Unemployment in Spain is a major issue and is reaching near 25% and there seems to be no end in sight that these numbers have reached a peak. While the problem of unemployment is growing the government is doing little to nothing to help or try and combat these alarmingly growing numbers, in fact through austerity policies are actually helping to
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