Spains Financial Crisis - 2845 Words

CASE 1 Spain’s in trouble Spain started facing economic troubles since 2008 global crisis. Financial crisis caused a huge crash in the property market and significant losses at its banks. These days Spain’s citizens take part in polls in Galicia and Basque regions. Galicia’s PM Mariano Rajoy lost part of national support due to his austerity measures. Basque country’s Socialist Party met opposite influence from Basque Nationalist Party. Unemployment rate in Spain grew to 25% in some regions like Galicia since the crisis began. Spain has already asked for some contribution from Swiss banks. They received 100 billion euro for covering its financial sector. (2012, SPANISH PM MARIANO RAJOY FACES KEY VOTE IN GALICIA) Spain’s economy grew†¦show more content†¦By 2015, this figure could reach 1.6%. These data were included in a report on the process of financial sector reforms in Spain and confirm the governments projections, which put the figure at 1.2 % and 1.9% respectively. IMF calls the current situation difficult. According to representatives of the organization, it could trigger a reduction of 1.3% of GDP in 2013. However, they said, since last summer, the situation has improved - especially in the area of reform of the financial system and because of the actions of the European Central Bank. Among the disadvantages faced by the country, the IMF calls the collapse of the bubble in the housing market, high debt levels in the population, the tightening of credit conditions, fiscal consolidation and the uncertainty caused by the banking and debt crisis. The reduction of GDP in 2013 due to a decrease in domestic demand was only partially offset by export - explains the IMF. Also, as expected, in 2013 unemployment will peak at 25.1% and will gradually decline to 24.1% in 2014 and to 23.2% in 2015. (2012, SPANISH RECESSION TO LAST UNTIL 2014, IMF WARNS) The head of the Bank of Spain, Luis Maria Linda said that the beginning of e conomic recovery will occur in 2013, provided that the country fulfills its promise in theShow MoreRelatedSpains Financial Crisis : A Case Study893 Words   |  4 Pageslikely to lead the debtors to claim bankruptcy. As a result, it is more vulnerable to the uncertainty and panic in the financial market. Amidst the ongoing recession and soaring unemployment rates, the damaging austerity policies have proven to be costly to the healthy sectors, making it difficult to cope with the collapse of the economy. This has slowed down the pace of Spain’s economic recovery. Therefore, acting as a shield, GLBs could protect the economy from the risk of facing higher interestRead MoreSpanish Financial Crisis1063 Words   |  5 PagesSpanish financial crisis Introduction (source: Wikipedia) The 2008–2010 Spanish financial crisis is part of the world economic crisis of 2008. In Spain, the crisis was generated by long term loans (commonly issued for 40 years), the building market crash which included the bankruptcy of major companies, and a particularly severe increase in unemployment, which rose to 13.9% in February 2009. Spain continued the path of economic growth when the ruling party changed in 2004, keeping robust GDPRead MoreThe Economic Economy Of 2.real Estate Sector Essay1584 Words   |  7 PagesOTHER COUNTRIES In 2009, the world economy was marked by a very small recovery following the world crisis, the inflation, a slowing economic growth, a high unemployment rate, and the shrinking of the foreign direct investments, not only in the US, Europe but in other developed countries as well. In 2009, the real estate market was in state of equilibration after the shock caused by the financial crisis and the explosion of the housing bulb, which were the consequence of a careless banking system, asRead MoreSpain Sub Prime Crisis7850 Words   |  32 PagesSubprime Crisis, a small problem of U.S. ï ¬ nancial markets, aï ¬â‚¬ect the entire global banking system? The aim of this paper is to analyze the effect of the subprime crisis on the banking sector in Europe, with a close attention on the case of Spain. Spain is currently facing the worst crisis ever experienced in its financial history, so it would be interesting to analyze what is the real situation of the banking sector and what will be the reforms that could lead to a consolidation of the financial systemsRead MoreThe Great Recession Is The Second Event That Sparked The Global Financial Crisis1280 Words   |  6 PagesThe Great Recession is the second event that sparked the global financial crisis. According to the IMF, recession is sad to exist if there is a decline in the real per-capita world gross domestic product, and this great recession did not disappoint (Davis, 2009). US banking systems were vulnerable to bank run, thanks to loose regulatory supervision (Andrews, 2008). The collapse of Lehman Brothers caused established commercial and investment banks in the US and Europe t o suffer huge losses, and suchRead MoreThe Objectives Of Financial Accounting Standards Board3137 Words   |  13 Pagesfast-growing economic globalisation and inter-dependent financial markets ´ institutions, accounting plays an essential role in business environment. Among the general reasons that make accounting a vital component of financial services industry is the fact that practices of accounting are profoundly implicated in the current financial crisis and in proposals for recapitalizing financial institutions and reestablishing stability to the global financial system. First of all, accountability for an individualRead MoreSpain s Participation Of The European Union1671 Words   |  7 Pageseconomic crisis the world has seen in years. After an economic boom fueled by loose credit lending, many countries are left with massive amounts of sovereign debt following the financial meltdown of 2008. The contagion sent waves of economic turbulence across the European Union. Spai n was dealing with a housing-market bubble which burst while the EU dealt with a widespread financial meltdown. With the economy in shambles and thousands of Spanish citizens unemployed, many are questioning if Spain’s membershipRead MoreThe European Debt Crisis : A Financial Phenomenon That Affected Multiple Countries Around The World1633 Words   |  7 PagesThe European debt crisis was a financial phenomenon that affected multiple countries around the world and the shockwave almost collapse the global market. One of the countries that were greatly impacted by the crisis was Spain. Some of the implications of the event caused unemployment to skyrocket, debating the role of the European Union and the state Catalonia is seeking their independence. Ultimately, the Euro Crisis showed the weakness of the European Union and debate if it would last into theRead MoreThe Debt Problem For Spain Essay1710 Words   |  7 Pagesand non-financial corporations, which together with non-p rofit organizations (negligible) make up the total value of the private sector debt. We have already analyzed the reason why the household sector accumulated debt, mainly through the real estate crash after the crisis in the first section. On the other hand, the non-financial corporations, represent the local companies that are part of the export and import business, trade with foreign companies or access financing from larger financial banksRead MoreEconomic Crisis In Spain755 Words   |  4 Pages Spain After experiencing a prolonged recession due the global financial crisis that began in 2008, Spain started to experience a positive economic growth in 2013 that contributed to the end of the financial crisis that the country was submerged in. Spain GDP (per capita) started growing slowly from a $31,992.8 in 2012 to a $36,443.2 in 2016, almost a 0.9% increase (Refer to table for details). In 2013, the year following the crisis, the government successfully shored up struggling banks; and, in