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The Financial Crisis in Spain

In: Business and Management

Submitted By gravedoom
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Sample Article: The Financial Crisis in Spain
Unemployment in Spain has reached 17.4 percent, according to figures released April 24 by the National Statistics Institute. Even without the global recession, Spain's economy likely would be going through a rough patch now due to the country's overheated housing market; with the recession, it is also suffering from a banking crisis and an industrial slump.
Spain's unemployment rate rose from 13.9 percent in the fourth quarter of 2008 to 17.4 percent in the first quarter of 2009, increasing the ranks of the unemployed to more than 4 million, according to National Statistics Institute (INE) figures released on April 24. Spanish Economy Minister Elena Salgado said that the first quarter of 2009 will be the worst in terms of increasing unemployment. The International Monetary Fund (IMF) predicts that unemployment in Spain will reach 17.7 percent in 2009 and 19.3 percent in 2010, but the INE figures seem to indicate that unemployment could exceed 20 percent by the end of 2009.
Of all the European countries, Spain has in many ways been one of the most gravely affected by the global economic crisis. Even without the global recession, Spain would most likely be undergoing a correction this year due to its extremely overheated housing market. But it is facing a severe housing market correction, an industrial slump, and a banking crisis caused by the housing correction and the recession's overall effects -- simultaneously. These three ingredients make for one bitter stew.
As the first large Western European country to be severely tested by the crisis, Spain can serve as a case study for the other European economies, foreshadowing the troubled road ahead for much of Western Europe.
The Beginning: The Euro and the Housing Boom
Spain's trouble has its origins in one of the most fundamental challenges facing...

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