The Economy of Spain: World's Greatest Bubble? #Spain #travel

The Spanish Economy is one of extremes. At one point a focus of the Eurozone Crisis, at another the largest contributor of growth, and more recently, suffering the greatest economic hit of any Advanced Economy in 2020.

Spain’s Economic problems are often confused. In the years leading up to the Great Recession it posted consistent budget surpluses.
However, a huge real estate bubble was lying in wait.

The question… is why?
Why did Spain go from a seemingly safe level of debt to one larger than its Economy?
How was the housing bubble encouraged?
And since then, has Spain’s Economy ever truly recovered? Or in what ways?

#Spain #SpanishEconomy #Economics

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  1. Spain has a big cultural issue which politicians, mainly from the left, feed. A large part of the population is government employed, around 16% and there are around 9 Million pensionists, these 2 sectors are the only ones whose salaries stay the same or increase every year with Members of the Parlament as well obviously, from them is where PSOE gets most of its voters so their policies focus on having this people well fed increasing massively the amount of population dependant from government and the Public expenditure. 16.5% of the population is unemployed, with Prevision of increasing up to 20% as the crisis starts affecting more businesses, youth unemployment is a HUGE 44%….Out of 47 Million habitants, only 15 million work in the private sector, making 1/3 of the population sustain the salary of the other 2/3, something simply unsustainable. The affiliated per pensionist went down from 2.40 to 1.90, our pension system is only standing by issuing public debt. To put you into context I had to explain all this technical stuff, now imagine sustaining all this with one of the highest tax efforts in Europe. Self employed have so many impediments and high quotas here, Corporation tax is also very high, having no tax incentives for foreign investments. Is just a tax and bureaucracy hell. Personally I am 19 and I decided to study engineering outside of Spain and I’m planing to work outside Spain at least for many years, the brain drain is real so many engineers and other very qualified people are leaving!!! It’s quite a disaster, we need a radical change and stop maintaining the wellbeing of our politicians.

  2. It is wrong to isolate economic analysis from social and political environments. This been unidimensional, I suggest to understand Spain economy more focus on the migratory movements in Spain and the political development (Parties and federal governments).
    Other than that, spot on mate !

  3. fundamentally right, but the big lockdown had major issues that i will explain.
    After big housing crisis, the next big wave of growing was tourism and gastronomy. Around 10% of the employment of spain was directly through hotels and restaurants, while 15% was on retail that became highly dependant as well on tourists on major places. It was the fastest growing sector, a full generation of young employees were mentalized and prepares to work in those service industry, even with the low wages and bad schedules.
    spain lacks major companies that produce high end things. cheaper production can be done in eastern europe or asia, and high tech manufacturing is often done in germany or france.
    spaniards saw in tourism and services a way to grow and create employment, similar to the housing market. the problem is that tourism doesnt export, nor it escalates so good to create well paying jobs. and then, the lockdown, that ruined both hotels and restaurants.
    The good thing is spain always finds a way to recover, there are plenty of opportunities, of course with some issues:
    – solar energy generation: now spain is kind of an energetic isle, but is the european country with more solar hours, plus is quite big. not only it can generate power but could develop a network of products and services that wouod position key players in the global market.
    -water management: spain is quite dry, hence the need to manage water resources. investing in this area could lead to position major players in worlds market.
    -latam: spain connections with latam.are huge, capacity of doing business with latam countries and being the key to those markets could help reshape the role of spain in europe.
    -digital: spanish employees are quite cheap, and recent generations reasonably educated. digital hubs should compite with those in poland, with the attractiveness of being in a sunny, safe, country with beaches and good food. Also remote workers see in spain a good place to relocate.
    – health market: spain has somehow a quite decent health system, with one of the longest life expectancy in the world. many people from europe relocates to spain for retirement, and there are ways to capitalize their health needs with specialized jobs.
    – agriculture and farming: being the second largest country in the european union, surrounded by the sea and with lots of sun shaped of spain as one of the largest european farms. also the recognition of certain foods (such as jamon) helps the brand to export. a modernization in agriculture and farming techniques should lead to becoming a great player in direct sales of food and technology related, helping position spanish techfood companies.

    There are opportunities, now is only a question of wether or not spain will make the most of them.

  4. Socialism and Communism holds almost 1/2 of the Congress as of 2020. THE REAL ISSUE IS: public opinion and foremost public education backstabs ECONOMIC LIBERALISM and INDIVIDUAL ECONOMIC FREEDOM. Could you imagine that in the Netherlands? Nope, more like Venezuela, political parties acting exchanging jobs (money) for votes, funded by high fiscal pressure to the productive actors of the economy. PS: Very deceptive header, admin. Viva España y Viva el Rey.

  5. After the 2007 crisis in Spain ruled socialists, and started expending a lot of public money on useless proyects, if in spain governed People like in ireland we wouldnt be such as bad as we are. Its my opinión and i am from Spain.

  6. I’m an economy student from Spain and I have to say that everything is correct apart from the “Fiscal decentralization” it basically doesn’t exist. There is only one region who has fiscal independence (Swiss model) and the rest have the same taxes, risen a little bit by the regional governments. One of our biggest problems is that there is no tax competition in order to attract companies. Cheers.

  7. I wouldn't consider the labor costs to be significantly higher than usual. Spain's labor legislation has a tendency to confront high unemployement with favouring cheaper layoffs and temporary contracts, which in turn fragment and dissolve the labor market even more, not allowing for significant job stability and stable financial lifestyles.

  8. Spain is a Top country in Europe in all the good senses….Those talking about corruption, check what countries like Switzerland, Luxemburg, Holland, England, Ireland have been doing…

  9. The populist policies of the government right now is one of the biggest issues to get out of this crisis, in my opinion.
    More taxes, zero cuts and more expenses (a lot of them probably useless). A big debt crisis is looming. And add to this the problem of the unsustainability of the pension system. Painful reforms have to be made but politicians don´t have the courage.

  10. to be honest was there last 6 months tried 4 cities and looked for place to live. in many cases their mentality is so backwards that you can not even lead discussion and find solution with people. coming from 8 year of living in uk there is major in problem solving approach. is very controversial country for me now due to is very modern and in the same time very underdeveloped. examples are across whole living there. like one of the biggest producer of food in the europe with france and italy and still you have problem to find cheap tomatoes and other stuff like pineapple juice is more likely to be just 50% diluted. but not just this. there is a lot of was surprising me on daily basis. but i realized one thing and that those problems are there because people in general do not take systematic approach to sort out problems and as such problems accumulate and then you finish in mixture you can not just simply see where all problems began, what causing them and situation seems to be like rubicon. otherwise is one of my favorite country i ever visited. been there twice last year (which surpass to this year) and two years ago.

  11. You have described the situation as good as any foreing person from here. But you have forgotten one thing, until the crisis, here we had a special kind of bank: the saving box (cajas de ahorro). The particularity of this kind of bank is that some of their administration members was putted by politicians. In the most of the regions there were at least one or more of this kind of banks. As the administration members was put by politicians, they did what politicians said them to do. The politicians wantted everybody has his own house, so they asked his "ceos" to let everybody get loans and mortage for buying house, which obviusly allowed to encoure the bubble. (More mortages, more construcction, more employees on construction and similar, more salaries to ask more loans and mortages, ….)

  12. Spain has one of the lowest public investment in Europe. Energy costs are high. Spain privatized its energy sector and guess who bought some these energy companies – the Italian government. During COVID energy price went up by upto 30%. Spanish economy is too much into construction and tourism. A country with lots of sun the home owner cannot put up solar panels for personal use he has to sell the generated energy to power companies and buy it back at a higher price. From being a leading solar energy R&D country 10 years ago it is now way down the list.
    Spain still has not shed its dictator ship past fully in the economy. It is very much a divided country between the rich and poor

  13. I live in Spain and here is my opinion:
    The government is really big and inefficient creating an enormous cost to tax payers, costs the country isn't in position of paying in the running times. Moreover, the biggest expense are retirements, Spain has been called out by the European Union several times about this and the need for a reformed system.

    With such high expenses, it is obvious you need to collect lots of money. The logical path would be to generate more jobs and incentive investment, well… Guess what the government is doing: Raising the minimum wage, raising taxes (which are already high, and I could develop way more the point about taxes with the youtubers going to Andorra or the new tax for big american corporations, which only will affect the small business…), and making political campaign during the pandemic, with public founds, of course. Anyone with just a little sense of economics knows this is a terrible idea! Instead you should lower taxes, create employment, and reduce unnecessary costs!

    I tried my best not to include any political message here. If you think otherwise, I can only tell you that everything I've said here is true and can be easily justified, and by any means I'm saying other political party would have done better, I'm saying this administration has done, and is doing EVERYTHING wrong.

  14. a country in which each region has such a high amount of competences delegated on them, starting by different education systems (at least content wise) will never achieve a common goal as a nation. No matter what spaniards choose every 4 years to rule the country as, most likely the typical regional government, probably ruled by a different political party administration than the national/central one, will try to put barriers to any reform well intended by the national administration (or viceversa). It’s become more than evident that, the psychological or moral wounds from the Civil War (1936-1939) are still far from being healed, when not even now with a pandemic, central and regional administrations have been able to agree on the most basic things, lives.

    Of course, I’m not saying that decentralization is bad in all cases, as it can be good in many local/regional aspects to which the central government can’t reach out but, I think many things such as the education system (where for example exams and contents taught to access Uni are easier or harder depending on the region), taxation systems are different and the overwhelming high amount of unnecessary job-posts offers (many of them don’t add any value to the GDP) depending on the region…should rely more on a common policy carried out by the central administration (whatever political party it is) having the chance to either succeed or fail but, at least, having a real opportunity without constant local/regional barriers during 4 years.

  15. Well, I really don’t know how but Spain stills have a beautiful and wealthy kind of living. Spaniards enjoys freedom, wellbeing and health like no other country in Europe. We have not so much worries because we have a strong network of relationships with family, friends, neighbourgs and so many more. The government isn’t the best we could deserve but we keep up appearances so good we can. I don’t believe English, Swedish, Norwegians, French and Germans are much happier than us. And please, excuse my bad English.

  16. Some of the Spanish bank still going for merger; domestic production, more budget allocation from European board and use for urgent needed infrastructure with in Spain policy can cope Spain unemployment crisis and stand up even in bad time least for next 3.5 years. European Union has still big bag though a dream horizon once realize by Hitler in his painting

  17. Really good video and very reliable information. I'm Spaniard and sometimes it is good to know a foreign sight, although but well informed, not stereotypical.

    We are very cainite. Not everybody because now Spain is a diverse country, but because of political polarisation we lose the sense of prospect.

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