THE REAL ESTATE BUBBLE
M.B. The government of Spain said that the economic crisis is due to the mortgages in the United States. The crisis of the United States was a real estate bubble that collapsed and was the cause of some of the problems in Spain. The term real estate bubble refers to the existence of a speculative bubble in the real estate market of Spain. Now, this real estate bubble is forcing the banks to sell the houses for half the price. Ten percent of the loans are not performing now and the banks need to sell the houses, but only if the houses are sold with low prices. However, the economic crisis is the result of many other problems and not only the mortgages in the United States. In addition, there are many other causes, such as a construction bubble, the unemployment problem, and the productivity in Spain. M.B.
M.B. This video was created at the beginning of Spain's economic downfall. It talks about some of the main issues and causes and the effects. M.B.
THE SOLUTIONS
M.B. There are many solutions to the Spanish economic crisis. One solution is the creation of a new productivity model that promotes economic growth. Therefore, the unemployment problem will be fixed. Another solution of the unemployment problem is a better education system because many people work hard in school, but do not obtain jobs. Additionally, another solution is to control the deficit and debt so that Spain will achieve some financial stability. A reform of the financial system is necessary as well, especially with the banks in order for the economy to grow. A very important problem is that Spain does not have many natural resources. A solution to this problem is the creation of new forms of energy that are inexpensive. Other solutions that are not as large include a tax reform, the promotion of entrepreneurs, the creation of alliances with powerful countries, and the increase of civic commitment. All of these solutions are necessary in the betterment of the Spanish economy. M.B.
C. S. This map shows the economic situation in each part of the country. The places where the economy is very bad are in the south. Therefore, it is necessary to wonder whether the weather affects economic conditions? Maybe high temperatures contribute to the crisis. C. S.
C.S. Spain is a part of the European Union. All members of this organization use the same form of currency, the Euro. One euro is worth $ 1.35. Is it bad that Spain is in the Union because their currency is linked to the rest of Europe and so Spain's problem is Europe's problem. The Spanish needs a bailout from Europe; it can not solve its problems alone. If Spain helps its own banks, it will create inflation in all European countries. Therefore, Spain is dependent on the European Union and does not have many options. C. S.
Here's and interesting video about Spain and its connection to the Euro: |
M.B. This graph represents the productivity of Spain, Germany, and the United States in the years of 2008-2012. The productivities of Spain and The U.S. had increased, and the productivity of Germany had decreased. The first bar represents the productivity of all the countries in 2008, the second bar represents the productivity in 2010, and the third bar represents the productivity in 2012. M.B.
Causes
C. S. The country of Spain is in an economic crisis. This crisis has many causes; a housing bubble in Spain has decreased foreign trade because of a trade deficit because the Spanish import resources such as water and oil, but other countries do not want to buy anything from Spain , and the most important sectors in Spain like the automotive industry and tourism are suffering . One cause of the economic crisis is Spain's dependence on the construction industry . Before the crisis , the construction contributed 12 percent of gross domestic product in Spain . Also, this sector employed 13 percent of the population. Between 1996 and 2007 , there was a housing bubble, in other words, the real estate market was successful and the property prices increased more than 200 percent. However, this bubble burst in 2008 and the construction industry began to suffer . Nobody wanted to buy houses nor other buildings because people could not afford such high interest rates , but because of these interest rates , people needed to sell their homes because they were becoming so expensive . Subsequently , the construction sector suffered and unemployment grew. Very high interest rates have caused decreases in domestic demand for products in Spain, and many people have lost their jobs. Another problem in Spain is the low level of productivity. Spanish people take naps and hold meetings in restaurants. The Spanish do not work hard in short periods of time. Because of this, Spain has lost 36 % percent of competitiveness in relation to Germany . Spanish companies need to increase the productivity of their employees if they want to compete with other European countries. They should pay less money for more work . In addition , the financial system in Spain only helps rich people and rich companies. Banks are now very large and do not give loans to small households and small businesses. However, these small firms employ the most people in Spain . The trigger for the crisis was the " subprime mortgages in the United States resulting in the stock market collapse , and the Spanish economy fell. The Spanish economy needs a bailout but it is difficult to do this because the currency is connected to the rest of Europe . That is, this crisis will be difficult to resolve . C. S. C. S. After many bad years (1971-2012), Spain has had its first trade surplus; the country exports more than it imports. Spain had a deficit of 100,000 million euros in 2007, and in 2012 it was 8 million but in March 2013, the trade balance was positive! There is more information in this article: http://www.tradingeconomics.com/spain/balance-of-trade CS
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Reaction
M.B. In the past years, the Spanish have begged for work. I am certain that the Spanish require job opportunities because they need to receive money during this economic crisis. It will be important that the Spanish have jobs due to a new product on the market because this product will create more jobs in the factory or at the workplace. I feared that the people did not have jobs, but now, due to a new product, I am hopeful. In addition, it is important to us that your company creates a product that establishes new jobs for the Spanish. Finally, it would be good that many people help fix the economic crisis. M.B. Below is a nice little chart/graph about unemployment in Europe. Enjoy!
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C. S. I think that what Spain needs is electric cars. I can not think of a more useful thing in Spain than a car that does not use oil because oil is very expensive. The Spanish need charging stations for these electric cars . They must work with the use of solar energy. This would be cheaper than oil and would also be better for the environment. In the past, I doubted that electric cars were successful because they did not have charging stations. Because of this , I 'm afraid the electric car industry in Spain still fails now. It was a shame that people did not use solar power in the past, but now, there is a good chance . Rather than importing an expensive resource , the Spanish should use what they already have : the sun. I hope that the Spanish can use electric cars and charging stations that would be a cheaper way than using oil . Beg that your company create these cars and charging stations. Maybe in the future , all people in Spain will use electric cars. It will be a country where people are rich and happy. C. S.
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