Publication Date
2025
Document Type
Senior Integrative Project
Abstract
The 2008-2009 Financial Crisis, which originated in the United States, shocked global markets. Being incredibly linked to the United States' markets, European markets like Spain felt the effects first. However, their build-up to the crisis was unique to the United States, its fellow European Union members, and the PIIGS nations. The PIIGS nations, comprising Portugal, Italy, Ireland, Greece, and Spain, were a collection of primarily Southern European economies whose accession into the European Union led to unchecked borrowing at previously unheard-of interest rates. These rates created a massive cycle of borrowing to invest but ceased as the crisis halted all borrowing. Spain was different as their citizens used these rates to get bad loans from cajas, small regional banks. These people could not repay the loan until the house was built and waited to sell the house for a profit later. Construction boomed to up to 13% of total GDP and 10% of total employment before the crisis occurred. Once the crisis hit, abandoned properties and mass job loss plagued Spain. In the years after, austerity measures cut services and hurt Spaniards, which led to some moving to the political extremes and despising the EU. As the economy began to rebound, Covid halted all progress momentarily. As we look at the economy in 2025, there is high unemployment and public debt, but GDP is nearing its 2007 peak. So the question is: has Spain recovered?
Recommended Citation
Rogers, Blake H., "Has Spain Recovered from the 2008-2009 European Financial Crisis?" (2025). CISLA Senior Integrative Projects. 76.
https://digitalcommons.conncoll.edu/sip/76
Included in
The views expressed in this paper are solely those of the author.