Why do people stare in Spain
The debtor countries: Spain
The initial situation: Spain's problems can hardly be compared with those of Greece, Portugal or Ireland. In 2011 the country only had to cope with a national debt of 69 percent of the gross domestic product - and yet Spain is in the worst economic crisis in decades and is being watched with hawk eyes by the financial markets. The reason for this is that the country owed its exceptionally long upswing from the mid-1990s to 2007 to a large extent to private housing construction financed on credit. When the real estate bubble burst in the wake of the financial crisis, the banks were left with bad loans, hundreds of thousands of Spaniards lost their houses, the construction industry collapsed and the unemployment rate rose from around 8 percent in 2007 to more than 25 percent (2012). Because the rate among the up to 25-year-olds is around 50 percent, the young people in Madrid, Barcelona and other cities protested for months against the austerity policies of the socialist Prime Minister Zapatero in 2011. He therefore called early elections in November 2011 - and lost his post after a significant defeat (minus 15 percent) to the conservative Mariano Rajoy.
Spain is facing major reforms of its economic structure. The country has to reorganize its labor market, modernize its education and training system and, above all, reform its financial system, because too many Spanish banks have one-sidedly and negligently aligned their business model to the real estate business and are now facing existential problems. In July 2012, the difficulties had become so great that the euro countries decided at their summit in Brussels an aid package of 100 billion euros for the Spanish banks. Because Spain itself had to give its banks a helping hand, the national debt rose within a year by 15 percentage points to 84 percent of GDP.
The situation in summer 2013: In April 2013, for the first time in Spanish history, more than six million people were unemployed, namely 6.2 million, which corresponds to an unemployment rate of 27 percent. As in other southern European countries, the young generation is particularly hard hit: at around 55 percent, Spain has the second highest youth unemployment rate in the EU after Greece. The already tense situation in the country is exacerbated by the fact that Spain slipped into a recession in 2012 that, according to EU forecasts, will continue in 2013. At the same time, according to EU forecasts, national debt will increase by another 12 percentage points. Between January and March 2013, the debt had already risen to a record value of 923 billion euros.
The current situation: Spain - like Portugal and Ireland - is no longer dependent on the help of the European rescue fund, so it is financially on its own two feet again.
The Spaniards had to use the money from the rescue package to support their banks in particular, because the credit institutions were sitting on a huge mountain of bad loans after the Spanish real estate bubble burst. The restructuring of the banking sector is now well advanced; The aim is to overcome the one-sided focus on the real estate business.
Spanish economic growth was also - after four difficult years - in the black again in 2014 at 1.4 percent and the current forecasts for 2015 and 2016 even promise twice as high growth rates. Behind this are very good foreign trade figures due to the improved price competitiveness.
Unemployment remains extremely high, which is a particular problem. Last year almost 25 percent of the labor force were unemployed, and of the 15 to 24-year-old Spaniards even more than half were unemployed at the end of the year. These high rates were and are not only a consequence of the financial and debt crisis, but are also due to the rigid labor market and the Spanish training system, which is in need of reform.
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