Economic Implications of Spain - Economic Implications of...

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Economic Implications of Spain’s Financial Crisis April 6, 2015April 6, 2015 whitneywelshgibbs Economics Economic Implications of Spain’s Financial Crisis The financial crisis in Spain has illuminated the growing economic catastrophe world-wide over the past six years. Astonishingly, in 2014, Spain’s economy seemed to be reaching a positive turning point and slowing making its way out of the disastrous recession. 1 However, the national unemployment within the county remained agonizingly high. 2 On April 26, 2014, The Guardian published an article entitled “Spain’s Borrowing Costs are Down – But the Unemployment Rate Isn’t,” which illustrated the long term affects the financial downfall. In the article written by Phillip Inman, the author acknowledges that after more than four years of continuous economic ruin, the Spanish government borrowed under half of what had been previously borrowed by them during the pinnacle of the European crisis. 3 Mr. Inman also highlights the decrease in the loan rates for small and medium firms; possibly due to increased stability of the Spanish banking system which will being printing money within a few short months. 4 The Spanish government has contributed these leaps and bounds within their economy to the strength of their “business-friendly” approach within the country. 5 Yet, through all the positive growth of Spain’s economy, the national unemployment rate remains at 25.3%. 6 Economist are stating that the cause of the continually high unemployment rate is “austerity.” 7 Austerity can be defined as government policies that create economic reform in order to reduce the national debt. 8 Often times, these government policies can include a push to cut wages with the country as well, with the hope of creating economic accountability and prosperity.

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