The 2008 global financial crisis was widely considered the worst economic financial crisis since the 1930’s and the Great Depression. This crisis was a major problem for nation states across the globe and exposed the interdependence that can easily result in a systemic international banking and credit crisis. While the crisis is six years in the past, we are still plagued by many of the long-term effects of the crisis such as extraordinarily high unemployment, austerity measures that decreased government budgets as a method to ensure government solvency, rapidly increasing poverty, and worsening economic inequality, one ramification of all of this has been the growing social and political discontent across Spain.
Current Situation: Unemployment
One of the most serious consequences of the financial crisis was unemployment; even today, six years later substantial joblessness still afflicts much of Spain. In the last study conducted by our Instituto Nacional de Estadística in quarter 2 of 2014, there were still over 5 million Spaniards unemployed and an unemployment rate of 24.47%. Although our economy has improved from the record high of 27.2% unemployment rate in February of 2013, we must take significant measures to reduce unemployment further.
Youth unemployment has been a crucial issue, with 51% of Spaniards under the age of 25 left unemployed or unable to find any type of meaningful employment. Furthermore, blue-collar workers have been heavily impacted as union contracts make pay decreases exceedingly difficult to negotiate with employers, and thus companies resort to firing employees rather than dealing with the process of diminishing or freezing wages. A static wage structure for working class citizen...
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...nt deficit without any benefit in alleviating the duress of austerity on the Spanish public.
Government spending and growth strategy: to pair tax cuts to individuals, corporation, and small businesses with government stimulus. This would have the benefits of the previous mentioned policy of tax cuts, with the addition of increased government spending on infrastructure, social services, and education. The combination of short-term economic stimulus and tax cuts could spur economic growth and help eliminate enduring consequences of the 2008 financial crisis such as unemployment, a reduced government budget, and public unrest.
European Central Bank President Mario Draghi recently recommended this policy in August of 2014 at the Jackson Hole Conference, to promote a growth-friendly fiscal stance in European countries hit hardest by the crisis and its effects .
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