Spain is one of the largest economies in Europe with a GDP over 1.3 trillion USD. They experienced an economic boom in the early 2000's as most industrialized nations did. However, with an increasing trade deficit, looming of the housing bubble about to burst and the worldwide financial crisis in 2008, Spain has seen catastrophic events take place and civil unrest that will require years to pull themselves out of and an increasing need for imminent change in the political system. Riots and protests span across Spain especially in the major cities such as Barcelona and Madrid. Violence often occurs at these events with items either being burned or fights breaking out. Flags of the Spanish Worker's Union, along with a different national flag (one that is purple, yellow, & red) to symbolize Spain without a king, can be seen throughout the squares where these events take place. Thousands of individuals come to protest the decisions made by Spanish government and many often see corruption as the root of the problem. In addition there are daily protests every day at noon where throughout the whole city, groups of individuals will walk onto a main street and block it for ½ hour to show their disgust with their government. These protests are legal and police often help to facilitate these.
Spain is one of many members of European Union, the Eurozone & the Schengen zone. With legendary football clubs such as FC Barcelona & Real Madrid & with Spain winning the World Cup and Euro Championship, football is the biggest sport in Spain. To fully understand a country's behavior is to fully understand their culture as well. With having siestas during the day it can be questioned how efficient their system is and how productive they are as compared with other nations. In addition, if watching a football match is more important than doing one's work, or productivity is slowed from individuals glued to the TV, these cultural differences can help when analyzing the root of issues and may give us insight to reasons why countries such as Spain, Italy and Greece have had huge economic downturns and why Germany is one of the most successful Euro zone nations. Spain is currently a member of the Euro Currency Union along with Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxemburg, Malta, The Netherlands, Portugal, Slovakia, & Slovenia.
[...] Spain is currently part of a currency union known as the Euro and has given up monetary autonomy to the European Central Bank. The main goal of the ECB's monetary policy is to maintain price stability and have an inflation rate of about 2%. During the 2008 global crisis they expanded the money supply and reduced interest rates to near zero levels. The ECB also gave enhanced credit support to the banking system in Europe. The first measure was unlimited liquidity provision to all Euro area banks at a fixed rate. [...]
[...] However, continued financial crises in Spain & Greece may lead to depreciation of the Euro. Similarly if Spain or Greece decide to leave the Euro zone and abandon the Euro currency that will likely have a significant effect on the exchange rate. Spain's current trade balance is - 36.2 billion USD. In addition, their current account balance is also negative at - 6.3 billion USD. This means that Spain has more exports than imports and that they are net debtor. [...]
[...] Works Cited http://www.bloomberg.com/news/ hthttp://www.economist.com/search/apachesolr_search/Spaintp://web.worldbank. [...]
[...] The dollar was fixed to the gold so they had no control over monetary policy and they tried to maintain a balanced budget so they did not use any fiscal policy to help get out of the recession. By getting off the gold standard and a dramatic increase in government spending by Franklin Roosevelt the US eventually rose out of the depression. In order for Spain to have a healthy economy again it is imperative that they leave the Euro and do not obey the treaty of Stability. [...]
[...] Not only are the companies in trouble of going bankrupt but the individuals who bought homes are also facing hardships. Bloomberg also estimates that 2015 house prices will fall by 50% from their peak in 2007. With such a dramatic downturn in prices and with prices expected to fall even further, no investors (both domestic and foreign) will put their money into the Spanish housing market. The root of this problem stems from the fact they built too many homes in such a short period of time. [...]
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