2009- With 4 million people unemployed, marks the beginning of the Spanish Recession
Previously, Spain’s economy was booming, seeing growth in the tourist and automobile industries; they had not let their borrowing budget get out of hand as other Eurozone countries had. They were also experiencing a rise in the housing market around the same time they adopted the Euro; both factors aided their economic prosperity.
During the economic rise, regional governments spent freely, but when the recession hit and the housing market crashed in 2009, they were forced to ask for aid from the central government in Madrid. However the recession was not only effecting different regions, but Spain as a whole. Spain was forced to borrow and request aid, but still Madrid pushed the regions to reduce spending and refinance to help themselves. New plans to were introduced to cut back spending in efforts to not accept a large bailout and follow in other European countries footsteps.
Banks also were quite liberal with their funds, using internationally borrowed funds as means to support loans they gave to those in the housing market. However, when the market plummeted, citizens were unable to pay back their debts, leaving the banks also struggling. Corruption among officials weakened Spain’s ability to recover quickly and because they had not been focused on what was beneficial to all of Spain’s citizens. The amount of aid they could receive from Eurozone would total to 100 billion euros, but Spain was trying desperately avoid this as to not receive a “full bailout” (BBC News). In 2010, workers protested the government’s plans to raise the unemployment rate and cut the public deficit. The country was really struggling to hold itself together as other sectors began to suffer as well, such as their education industry.
In 2012, the central government gathered an 18 billion euro loan that they would allocate to hurting regions such as Catalonia. This aid set up increased public trust in the Spanish government again however unemployment still continued to rise.
In 2013 the country finally accepted aid as their government was struggling as people were losing trust in their leaders and the monarchy. Unemployment was at a record high of over 25 percent, leaving young Spaniards with little hope for the future. Through efforts to cut spending and work out borrowing plans and loans from Eurozone, Spain finally sees a rise in their economy near the end of 2013. This officially lifts them out of the recession, but they are still recovering today.
In December 2014 Princess Cristina de Bourbon became the first member of a royal family to be charged on tax fraud, displaying Spain’s efforts to reestablish good terms with the public.
Spain’s economy has since seen their largest economic growth rate since before the recession and seem to be moving forward. They have recently approved a budget for the following year that includes aims to improve their education and health systems as well.