Are Spanish leaders really independent?
Spain's leaders are not really independent, for example, they can cut away in health, in
education, etc. But the European leaders tells them the money they have to obtain to pay
the debts of the country, or if we should he rescued, the money that we would have to
return. Definitively, they are only independent to organize from where they are going to
obtain the money: cutting away in education or health or ...
Why did the crisis occurs?
The crisis happened because in countries like Spain, the urbanizable areas increased and
businessmen started to constructing a lot of houses. In that the businessmen saw a great
business, in what one reduced the workable rights, the businessmen will invest more
in personally and like that the unemployment would reduce more. The demand of the
houses increased the price of the houses increased, which caused that the price of the
ground was increasing since it was appraised depending on the potential benefits and
the price of the houses went off and in 2005 the bubble already was untied and Spain
was building more houses in one year than Germany, France and Italy together.
That produces that the banks reduce their demands for give credits to people with low
money. So with low money, you could have a good live.
In 2007 families, business and administration had amazing debts with banks and banks
had great debts with other identities finance companies.
In other words, our wealth creation wasn't bringing our growth, it was our growth wich
was bringing our wealth creation, but growth existed thanks to the debt.
When the crisis burst in 2008, the banks didn’t give credits, investor people didn't buy
debt, as nobody lent money, it produced a domino effect: the consumption reduced the
economy contract, the businessmen stated to dismiss in mass and families without work
were expeled from their houses for unpaid.
There is a video in Spanish that explain that with comedy:
http://www.youtube.com/watch?feature=player_embedded&v=xWrbAmtZuGc#!
http://www.youtube.com/watch?v=x9KhyEjDMR0&feature=endscreen&NR=1
Why is Spain in crisis now?
It all started with a housing bubble. During the 2000s, thanks to low interest rates and
an influx of foreign capital, Spain had a furious boom in housing construction. In 2007,
the bubble finally burst. And Spain still isn’t anywhere close to recovering. Economists
have estimated that housing prices have fallen 26 percent, but that’s still only about half
of the total decline that will ultimately need to happen.
So that’s why Bankia’s in trouble?
Yes. During the housing bubble, it was Spain’s regional banks, or cajas, that threw the
most money at property developers. The entity that’s getting all the headlines now,
Bankia, was formed after a 2010 merger of seven cajas that were too weak to stand on
their own. But after receiving $5.6 billion in government aid earlier this month, Bankia
recently announced that it actually needed about $23.5 billion in aid. And the housing
bubble hasn’t even finished bursting yet.
What’s the problem with that?
Spain doesn’t have that sort of cash readily lying around. Investors are already nervous
about lending more money to Spain, whose deficits have spiked ever since its housing
market collapsed. And Spain’s economy is now in shambles. Before the crisis, one-
seventh of its workers were employed in the housing sector. Since the bubble popped,
unemployment has soared to 25 percent. The retail sector has collapsed. Even the
country’s once-bright export and auto sectors have started sinking in recent months.
How does Spain get its economy growing again without its banks?
That’s the problem. Spain can’t really grow if its banks aren’t lending to businesses.
And its banks aren’t lending to small and medium-sized businesses, because they’re
facing massive losses and shrinking balance sheets. Plus, plenty of Spanish depositors
are taking their euros out of Spanish banks and sending them to Germany because
they’re afraid that Spain might leave the euro. That’s made Spain’s bank problems even
worse.
Is there any other way Spain can save its banks?
The government also is trying to get creative in propping up Bankia.
So far, it’s unclear whether the European Central Bank is willing to go along with that
plan.
Basically, it’s still uncertain just how rickety Spain’s financial sector is. The Spanish
government has so far ordered the country’s banks to set aside around $115 billion in
capital, all told, to prepare for further losses in the property sector, but housing prices
are falling so steeply and the economy’s so terrible that it’s unclear whether that cushion
is big enough.
If Spain can’t patch up its banks, can’t it get aid from other European
countries? Isn’t that what happened in Ireland?
The alternative is for wealthier European countries — mainly France and Germany —
to bail out Spain with lots of money. That’s what they did for Portugal and Ireland. But
Spain is much, much bigger and much, much more expensive. To put this in context,
Ireland has received about $105 billion in aid, and its housing market has mostly
stabilized. And Spanish Prime Minister Mariano Rajoy, for his part, has said he won’t
accept an international rescue.
Is democracy in crisis?
It's in crysis because money corrupts everything and also the politicians, who promise things
that they don't do. They're lying and they do everything they can to make more and more
money. An example is the recent privatization of health.
The spanish actual government (PP) blames the government that had the power before them
(PSOE). They say that PSOE did very badly.
Education
A democratic party would enrich their own opinion and make a law be forever. It's a craze that in
Spain there are many educational laws in the E.S.O.
Spain spent less than other countries in education and after the crysis, there's less money.
Because of this, the future of Spain is going worse. Students aren't prepared as they were
before and there isn't so much money for paying the teachers like it used to be.
Conclusion
We have learned that the crisis of Spain started with a housing bubble. During the 2000s,
thanks to low interest rates and an influx of foreign capital, Spain had a furious boom in
housign construction. In 2007, the bubble finally burst. So that’s Bankia’s in trouble. The entity
that’s getting all the headlines now, Bankia, was formed after a 2010 merger of seven cajas
that were too weak to stand on their own. But after receiving $ 5.6 billion in goverment aid
earlier this month, Bankia recently announced that it actually needed about $ 23.5 billion in aid.
But Spain doesn’t have that sort of cash readily lying around. Investors are already nervous
about lending more money to Spain, whose deficits have spicked ever since its housing market
collapsed. And Spain’s economy is now in shambles. The problem is that Spain can’t really
grow if its banks aren’t lending for businesses. And its banks aren’t lending small and medium-
sized businesses, because they’re afraid massive losses and shrinking balance sheets. Plus,
plenty of Spain depositors are taking their euros out of Spainish banks and sending them to
Geramany because thet’re afraid thatSpain might leave the euro. That’s made Spain’s bank
problems even worse. The alternative is for wealthier European countries - mainly France and
Germany – to bail out spain with lots of money. That’s what they did for portugal and Ireland.
But Spain is much bigger and much more expensive. And Mariano Rajoy, for his part, has said
he won’t accept an international rescue.
We know that Spain has a great economical crisis, but the Spanish goverment isn’t doing well to
try finishing it.
We also know that decisions of Spain goverment are influenced by the goverment of countries
like Germany that have a great economy.
The proble with Catalonia isn’t good for our country and for Catalonia is bad too because of this,
Spain have more problems apart from the crisis.
Our group think that some things in Spain are bad, like that only PP and PSOE are the parties
to win elections. We think taht other political parties have to have the opportunity to win and to
propose more ideas and things to choose no only PP and PSOE.
