ELDRIDGE FINANCIAL BLOG Spain economic next level from boom to bailout

MADRID (AP) – Global economic cards have shown Spain into the deep financial crisis which is basically far from the growth they stained over the past decade. From the year 1999, Spain became one of the 12 countries that joined the single European currency. Spain’s membership in this powerful bloc gave it access to lower interest rate loans than it would have gotten on its own. The financial crisis has broadened because of the cheap money in which many of the families and property developers borrowed heavily. In addition, the unemployment rate jumped up to the next level from the previous volume and counting. The jobless rate, which stood at 8.3 percent in 2007, jumped to 18 percent in 2009. It is now almost 25 percent. Many protesters were young- the jobless rate for those between 16 and 24 has reached 52 percent. The huge numbers of unsold properties in Spain caused prices to drop. Furthermore, Spain’s facing problems become more acute due to the Eurozone debt crisis which is said likely worsened including Greece, Ireland and well as Portugal. In view of the fact that the financial sector was sitting on €445 billion ($553.49 billion) worth of property-related loans by 2009, Regional governments also turned out to drop in debts as income linked to new construction licenses and taxes dried up.

Moreover, Eldridge Financial  Press released controversial hikes in the retirement age ranging 65 to 67 years old in 2010 which was publicized by the Socialist Prime Minister Jose Luis Zapatero.Also, sales taxes get handle on the size of government debt and mollify markets.Since the Zapateros measures failed to stop the country’s slide into recession,he was then forced to call early elections in 2011. Rajoy has had to nationalize eight lenders facing bankruptcy as Spain fell into a double-dip recession. But investors and markets have continued to focus on the financial sector’s €180 billion in toxic real estate assets and the financial health of the wider Eurozone. This has sent Spain’s borrowing costs on the international debt markets to worryingly high levels. Rajoy and his team have been unwavering that the Spanish banking sector would not need a bailout. On May 28, he said: “There will be no rescue of the Spanish banking sector. “While, economy Minister Luis de Guindos said on Saturday “Spain will ask for a bailout after European finance ministers authorized a rescue amount of up to €100 billion ($125 billion). “