User:Scholarly515/2008–2014 Spanish financial crisis

Origins
The origin of this crisis, framed in the context of a global economic-financial crisis, was strongly influenced by the strong adjustment of the construction industry after the puncture of the real estate bubble. It is presumed that the real estate bubble began in the late nineties, during the government of José María Aznar.

The lowering of the price of housing coupled with unemployment meant that many citizens could not take care of their mortgages, or sell their properties. This situation occurred because in areas where prices had been "inflated" a lot, the price of housing was lower than that of the mortgage debt contracted. Thus, numerous seizures of premises and second homes, as well as evictions of first homes were carried out during this period of the crisis. Although at the beginning of the crisis (2008) 27,000 foreclosures were launched, in 2017 there were 600,000 people evicted.

2008 Inflation
Due to the lack of its own energy resources, Spain has traditionally imported all its oil from abroad, so the energy crisis of the 2000s produced an inflationary trend. In June 2008 the accumulated inflation over the last thirteen years was 5%. The abrupt fall between 2003 and 2008 in the price of oil together with the bubble burst raised fears of a risk of deflation, so Spain reached in 2009 the lowest inflation rate in the last 40 years, and in March 2009 there was deflation for the first time since data has been recorded for inflation.

In October 2010, the economy continued to contract while inflation rose again. Between 2011 and 2012, prices rose by 3.5%, and this rise combined with austerity measures and high unemployment negatively impacted the standard of living of Spaniards. At the same time average wages decreased and purchasing power was noticeably reduced.

Banking system
The Spanish banking system was considered by many economic analysts as one of the most solid among the economies of Western Europe and one of the best equipped to withstand a liquidity crisis, due to the restrictive banking policy that forced banks to maintain a high percentage of reserves. However, this analysis turned out to be incorrect due to other factors, during the real estate bubble in Spain this policy was relaxed and the regulator, the Bank of Spain, acted with omission. The accounting system of "accounting provisioning" practiced in Spain does not exceed the minimum standards of the International Accounting Standards Board, and this allowed it to give an appearance of solidity while the system became vulnerable.

Contrasting sharply with other countries such as Ireland, the only major nationalization was late. Previously, the government had promoted a banking concentration with public money. Since Spain had the densest bank branch network in Europe, this led to a large number of "surplus" employees increasing unemployment.

Economic politics of the Zapatero governments (2008-2011)
The effects of the economic crisis began to be evident at the beginning of the second term of José Luis Rodríguez Zapatero. After denying the crisis in its beginnings, and after investing huge amounts of public money in shock plans against the crisis (injection of 100 million euros in guarantees for the banks, 50 billion euros in the so-called Plan-E), Zapatero took economic measures far from the electoral program with with which he campaigned during elections : freezing of pensions, reduction of the salary of public employees, withdrawal of star measures of the previous legislature (baby-check, deduction of 400 euros in the IRPF), in addition to a labor reform that provoked the union and employer rejection and led to a general strike.

First signs of economic deterioration (2007)
August 9, 2007, is the date that analysts point to as the beginning of the economic crisis on a global scale. On that day, as a result of the subprime mortgage crisis, there were the first major bankruptcies of US financial institutions dedicated to mortgage credit and asset securitization. In Europe, one of the main banks, BNP Paribas, suspended several investment funds due to the lack of credit in the system. The massive sale of securities from other sectors carried out by financial institutions to obtain liquidity caused stock markets around the world to suffer sharp falls. Faced with this situation, the Fed, the European Central Bank and the Bank of England agreed in a coordinated manner to inject 400 billion euros to generate liquidity.

At that time, in Spain, the economic situation began to warn about the bursting of the real estate bubble. Already in April 2007, the real estate group Astroc suffered the biggest crash of the Spanish stock market, and in October of that year, another real estate group, Llanera, presented suspension of payments.

Campaña electoral (finales de 2007)
Instead, the political situation at the time was in the pre-election campaign, with an eye on the March 2008 general election. The government of José Luis Rodríguez Zapatero, with Pedro Solbes at the head of the Ministry of Economy, proposed measures of great social significance and high economic impact, such as the baby check in July 2007 (2500 euros for each new child born), at the same time that it was ensured that the Spanish economic situation was "in the Champions League of the world economy".