Inequality In Spain Essay

754 Words4 Pages
There has always been rich and poor in Spain but never like in recent years, the distance between them is very significant, as well as the difference in relation of incomes. The unemployment rate has taken a toll on the family income. More than 1.7 million households, according to the latest Labor Force Survey, have all members unemployed, and only 67% of those registered in employment offices receive any assistance or provision of the state. As a result, Spain is one of the most troubled positioned countries in statistics that measures social inequality and has the biggest distance between high and low incomes.
In Spain the economic gap has always exceeded the average of the euro partners, at least from the start of Eurostat statistical series in 1995. It was stable, until the crisis aggressively attacked the economy and the gap began to grow five years ago. The GINI coefficient, which measures the difference in income of a country, is a clear example of that change. If the statistics shows a zero means that in that country there exists perfect equality, if it shows a 100 would mean an absolute inequality. Spain pulled out in 2011 34, the highest level since records. Latvia is the only country that exceeded Spain with 35.2. In the opposite side is Germany, with 29 and Norway with 22.5.
The Spanish families have until mid-2012 a loss of wealth of 18.4 % over the previous year, representing the sharpest decline recorded between the economies of the euro zone, especially harmed by adverse economic conditions resulting from the crisis sovereign debt and the appreciation of the dollar against the euro, as reflected in a report on global wealth produced by Credit Suisse.
In absolute terms, the aggregate amount of the impoverishment of...

... middle of paper ...

...jobs due to reduced capital inflow, as it is riskier to invest in Spain's market. Since investing is so risky, the interest rate that investors have to pay for loans and investment projects in Spain are higher in comparison with other countries from Europe.
Because of the increase of the public debt and economic deterioration, Spain has no option than to ask for help.
Spain calls on members of the Eurozone for a rescue plan of up to 100,000 million for banking. In July of 2012 it reaches the 7% with a premium of about 650 basis points in respect to Germany.
As well, the ECB announces a bond program plan for countries with problems, to generate a positive effect and calm the markets.
In the third quarter of 2013, the GDP growth shows the end of the longest recession in decades. From 2013 the country risk premium starts decreasing reaching 186 basis points in 2014.

More about Inequality In Spain Essay

Open Document