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JOB OPENINGS
2009
2008
2007
SPAINISH
FINANCIAL CRISIS
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INTRODUCTION
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The Maastricht Treaty
budget deficits as large as 6.5% of GDP
Treaty called for Spain to reduce its long-term interest
rates
The construction market flourished
population grew from 40 million to 45 million during
2000-2008
From 1999 until 2007 the Spanish economy created more than
one-third of allemployment generated in the Eurozone
Prices of houses increased dramatically
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The demand for housing had slowed in 2007
By this time, construction accounted for 13 percent of total
employment in Spain
Unemployment jumped up 10 percent
As unemployment skyrocketed, so did unemployment benefits
Reduction in the Spanish governments tax revenue
Deficit of almost 4 percent of GDP
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Spanish regional savings and loan banks
Around 24,000 branches of cajas
usually regional politicians control the cajas
Nondisclosure prevented from understanding cajas financial
situations
The cajas continued to lend heavily
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By 2009, cajas owned 56 percent of the countrys mortgages, and
loan payments
Housing market crashed in 2009
The cajas were paralyzed by a lack of income
Loan exposure was around 180.8 billion in mid-2010
Government bailouts kept the banks from going bankrupt
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U.S. loans are non-recourse
Spanish loans are typically recourse loans
Feb 2011, unemployment hovers around 20 % of the labor force
(4.3 Million)
Estimated that 70% of the jobs lost after 2008 related to the
construction sector
Spains public debt as of 2010 was estimated to be 63.4 percent
of GDP
There are 1.5 million vacant homes in Spain
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Eurozone countries had the same monetary policy but different
fiscal policies.
Members were able to maintain their own spending and taxing
policies
Inability to devalue the currency
Integrating Europe, it has become a major hindrance in the
Spanish crisis
Lack of regulation of Spanish lending institutions and the real
estate market
Cajas made too many loans to individuals and corporations
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IMPACT OF CRISIS ON SPAIN
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GDP
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GOVERNMENT DEBT
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UNEMPLOYMENT RATE
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INTEREST RATE
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STOCK MARKET
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Spain Leaves the Eurozone
Spain Toughs It Out
Second Euro
EMU BailoutOr Not
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New law requiring that cajas reinforce their capital by Sept
2011
Risk-weighted assets
Created the Fund for Orderly Bank Restructuring (FROB) in Jun
2009
Implemented austerity measures
EU created the European Financial Stability Facility (EFSF) in
2010
European Commission has also adopted a legislative package
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