HOW THAT SITUATION BEGAN ...
The creation of the EU and when Spain entered in :
The idea of the European Union came after the Second World War (1939-1945) because of a desire ti create a peaceful and prosperous Europe after the destruction of two World Wars and after a long time of antogonism and mutual distrust between the european powers. At the begining six principals countries : West germany, France, Belguim, The Netherlands, Luxembourg and Italy signed the treaty of Rome and formed the European Economic Community ( EEC). At that moment, Britain could joined them but it distanced itself from that European Union because it regarded itself as a commercial pomer and did not wanted to be restricted by the European relationships.
It was in 1973 that Britain , Denmark and Republic of Ireland.
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In 1981 Greece,
and in 1986 Spain and Portugal.
The EEC was based initially on economic concerns and instituted harmonization programmes such as common coal, steel, agricultural and fisheries policies, aboliton of trade tarrifs between member states and aid to development to depressed areas within its borders. Some britain regions have benefited considerably from regional funds.
In 1986, when Spain and Portugal entered in the EU, the member-states formed an internal or Single European Market, in which goods, services, people and capital could move freely across national frontiers within that was called then called the European Community. In 1992 The Maastrict treaty was a step in the process as a result of which the European community became the European Union (EU). The treaty provided for the introduction of a common European currency the Euro, a European bank and common defence, foreign and social policies.
But, the European Community which is called now the European Union in not what it was at that time. Of course we will talk about the begining of the crisis.
THE MAIN PROBLEM...
The European Crisis and the effect on Spain :
Since the financial crisis hit in 2008, a wave of debt crises have
swept the European Union, threatening various countries
and putting the future of the euro in danger. Many countries are affected but I will just focus on Spain.
Because
of the higher increase in construction of new homes and the long time
between the beginning and end of a construction project, "by the time
the demand for housing had slowed in 2007, available housing was
reaching its peak. By this time, construction accounted for 13 percent
of total employment in Spain." When prices began falling and housing
demand halted, unemployment jumped up 10 percent. In 2008, Spain
fell into an economic downturn, due to the collapse of his
housing market. that situation worsened the economic conditions as a result, the country expenses unregulated savings banks were in the real
estate market. the decision of increase the public benefits caused higher government
spending and the government debt skyrocketed. In that case, investors became more reluctant to invest and
Spain’s economy further declined. Banks have therefore begun to lend big money to households, which when the market became ill could not repay.Result households got into debt and could no longer give the money back and the banks too had overleveraged to allow these strong borrowings. This is the main reason of that crisis in Spain.
THE SOLUTONS TAKEN...
The measures taken to try to save Spain :
Spain has seen record borrowing costs recently, forcing its
government to adopt numerous austerity measures to get its finances
under control.
The housing boom turned to bust, leaving the country's banks loaded with
bad debt and the highest unemployment rate in the eurozone.So the governement decided to take austerity measures. Spain experienced a real estate bubble leading up to the crisis, which hurt its growth despite the country’s unusually safe financial sector. Facing higher than expected deficits, Spain adopted austerity measures in May 2010. In March, Spain announced it had met its deficit reduction target for the previous year. Borrowing costs for Spain have spiked, spurring fears that it may require a bailout that other European governments cannot afford. Spanish leaders say they are considering more austerity measures.
To sum up
We can notice that the European crisis had a really bad effect on many countries of the Eu especially Spain and now whether with austerity measures or something, Spain does not succed to go out of this situation.We just hope that within a few years, direageants of these countries heavily affected by the crisis such as Spain finally find solutions that will help these countries get back to this crisis, which for now is just destroying them.
Principal sources:
- Documents gaven in class
Secondary sources:
Well done, Natacha, you have done a lot of research on this topic.
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