The economical crisis in January 2009 in Spain

During the month January of this year the number of unemployed people in Spain rose by nearly 200.000. It means that the unemployment number reach now 3.33 million and this is an increase of 47 percent since January 2008. Spain was hurt more than other European countries because it had created millions of low-skilled jobs during a long time of property boom. And it also failed to use the good times to retool its rigid labour market. The layoffs effected from the construction sector to services and manufacturing. Reasons therefore were that consumers spent less and also the credit remained scarce. The main part, two millions of the unemployed people are from the service industry and more then half a million from the construction sector.

But the government expect a further rise of unemployment by 16 percent and even more. One reason for the expected rise in unemployment is concerning to Jesús Barcenas, head of the confederation of small and medium enterprises, is that companies are not able to get a credit and are waiting months for payment from clients. And this leads in the area of small and medium enterprises, which employ about 80 percent of Spanish work force, even to bankruptcy of successful companies. One reason therefore is that they have to pay loans monthly but large clients take often six months to pay for their order and credits from banks to refinance loans are hard to get.

As a reaction of this behaviour of the banks José Luis Rodríguez Zapatero met with the heads of the six largest banks of Spain and pressed they to provide billions of euros in government-backed loans to companies.

Concerning to specialists there is a requirement of $ 23 billion which should be provided to increase the unemployment in short term. Some of business representatives mention even that the government should decrease corporate taxes and contributions to the social security system to improve the unemployment situation.

Source:

http://www.nytimes.com/2009/02/04/business/worldbusiness/04specon.html

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2 thoughts on “The economical crisis in January 2009 in Spain

  1. solving the financial crisis which was caused be excess of loans, with another loans? interesting.. but i think the experts and the government know what they´re doing.

    i would like to add, that i think Spain has such problems with unemployment from the time it opened its borders to immigrants.. millions of people came to live and work in spain. so it had to close the borders again.. but it was too late.

    and now the world´s crisis “helps” the crisis in Spain even more..

    Reply
  2. I agree with bikulka. Another loan would make the situation much worse. I also think that Spain’s main problem is imigration. They have to find a solution to solve this problem for long-term.

    Reply

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