Eurozone crisis roars back to savage Spain Article Analysis Essay

Eurozone crisis roars back to savage Spain denomination Analysis - Essay ExampleSpain is considered one of the most important economies of the world. Considering this importance of the Spanish economy, several economies of the Eurozone as wellhead as of the world have expressed concerns regarding the effects this economic trouble this exit score without the world. These factors leave alone be discussed in this assignment in detail later and economic theories will be presented to analyze if the Spanish government has been right in implementing its policies or not.The article which will be discussed in this assignment is regarding the economic crisis which Spain is facing and the troubles that lie ahead for Spain in the foreseeable future. The article was scripted by Liam Halligan who is the chief economist at the Prosperity Capital Management, and this article was published in the workaday Telegraph.Spain as mentioned above has long been considered one of the worlds most import ant economies with its great potence in real estate and investments from foreign companies. Spain is the fourth largest economy in the Eurozone and the worlds twelfth biggest economy. This has actually raised more fears that if such a huge economy goes bust, then to what extent will it negatively affect the European and worldwide economies. The Spain crisis started in 2008 when the worldwide and European recession arose and the debt crisis began to take dominance. altogether of a sudden, the unemployment rates increased drastically and the burden fell on the people as well as the government because it had much lower tax revenues and a lot of social benefits to distribute in addition to the repayment of debts which were previously borrowed in the early 2000s.... In the early 2000s, the Spanish economy went through a boom in real estate and this triggered a huge amount of private borrow from European Central Banks (ECB). At that point, no one had predicted that the year 2008 will p rove to be a disaster for most of the European economies. When the Eurozone crisis struck, the banks and financial institutions started to demand their funds back due to funds shortage. withal several economies who had lend the money to Spain asked for servicing its debts due to the fact that they needed money to counter the recession. At this point, the prices of property began to fall due to the recession and the borrowers were finding it harder to service the debts because the investments for which they had borrowed money were turning out to be bad investments. Today, the private vault of heaven debt in Spain is around 300 percent of the Gross Domestic harvest (GDP) which is considered extremely high. Figure 1 Spain government Debt to GDP Ratio (Trading Economics) The Figure 1 above shows that the Spanish government debt to GDP ratio stands at 60% which is high for a country whose private sector is leveraged with debt to an astonishing figure of 300 percent. With Spain being indebted to other economies, mostly European, to such an extent, the time was lush approaching when it had to repay its debt gradually year by year. When the time of servicing the debts came, it had to borrow more money from other sources so that it could repay the previously borrowed money. With the Spanish economy already so highly leveraged, the European Central Bank and financial institutions were reluctant to give them the money. With this reluctance, the