The article explains the great recovery of Spanish economy after the recession in 2008, highlighting
the great measures taken during the last 3 years (2014-2017) and comparing the current situation
with the pre-crisis status.
The main problem of the Spanish economy in 2008 were the credit and property boom, caused by
the low interest rates after joining the European Union; exemplified by the fact that Spain was
building in 2007 more houses than Germany, France, Britain and Italy combined. When the bubble
exploded in 2008, the country was plunged into a deep crisis, whose first signs of recovery had to
wait until 2014.
The unpopular policies taken by the government to fix the situation include a reform in the labor
market, overhaul of the banking system and deficit cut. The consequences of these policies were:
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GDP growth: By more than 3 per cent in both 2015 and 2016, far ahead of its European
peers
Increased private companies’ competitiveness: Though wage reduction and relaxed
employment laws
Fixed banking system: Recapitalization of the good banks and creation of the bad bank
(Sareb) with toxic assets
Not over-reliance on construction: Construction sector is now 5% GDP instead of 10% in
2008
Current account surplus: Becoming an exporter country with 33% of GDP instead of 25%,
from CA deficit in 2008 to CA surplus in 2017
Fixed government corruption: Change in people’s mindset to become less tolerant
On the other hand, the process is not complete yet as there are still improvements to be done mainly
in the following areas:
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Labour Market
o Unemployment: 18.6%, higher than pre-crisis and double Eurozone’s average
o Low Productivity
Inequality: Highly increased during the last 10 years, mainly between the different age
groups
Debt: 100% Debt/GDP, up from 40% in 2008
Education System