News / Europe

Spanish Economic Crisis Threatens to Sink Euro Currency

Unemployment line in Spain
Unemployment line in Spain
Henry Ridgwell

Spain is among the latest European countries to introduce tough austerity measures that may not be popular at home, but are deemed necessary to keep the country afloat. Spain, alongside Greece, is among those European countries with massive public debts and economies widely deemed vulnerable to a crash that could drag the euro with it.

It is 7:30 in the morning in the north of Madrid, and the queue for the job center is already stretching around the block.
Among those in line is Patricia Martinez. She used to be a nurse, but seven months ago she was laid off. Now each morning she arrives here to try to find new work. She is not having much luck.

"The reality is that economically it is fatal, but emotionally for people too it can also be terrible.  I do not know what is happening, not just in Spain, but in Europe and the world," she said.

Patricia's story is all too familiar.  Spain has the highest unemployment rate in Europe at 20 percent, and it is likely to get worse.

Europe is haunted by the fear of huge public debt. Spain's debt totals more than 11 percent of its GDP. Although its economy is far larger, investors fear that Spain, like Greece, might soon be unable to pay its creditors. So the government is slashing public spending by $18 billion over two years.

Economist Javier Ortega at London's City University says Spain's debt has been rising sharply in recent years. "The reason is essentially this increase in unemployment, because there are more unemployment benefits to be paid.  So now there is a problem of credibility of what the government is going to do, and of course the situation is different to situations in other periods because now there is a common currency," he said.

Debt collection is now big business in Spain and it has got a highly visible face. One company called 'El Cobrador del Frac' specializes in shaming their targets into paying up, by dispatching debt collectors dressed in top hats and tuxedos to shadow their targets.  he company's commercial director Juan Carlos Rodriguez says business is booming.

"The construction industry is among the worst hit.  It all began three or four years ago when there was construction boom.  Then with the crash, nobody would finish the work.  Nobody got paid.  In Andalusia in the south of Spain especially you can see the results of this," he said,

On the southern coast - known as the Costa del Sol - block after block of apartments lie empty or half finished, many of them designed for foreign buyers who have long since abandoned the idea of investing in Spain.

Inez Rix of Direct Property Auctions specializes in helping owners who are now struggling to sell their place in the sun. "It was absolutely crazy here in the boom times.  It was really in the late 1990s or 2000s.  Prices were just going up and up, people were asking for anything they could get away with.  Now there are hundreds of places like this across the Costa Del Sol because developers have run out of money, and of course the banks have pulled out," he said.

The debt crisis is threatening to sink the euro currency, so the European Union has pledged to guarantee loans totaling around a trillion dollars.  But in return, governments must slash public spending.

The prospect of wage cuts and pension freezes has prompted street demonstrations. Unions have called for a nationwide strike in September, against plans to make it easier for companies to hire and fire workers.

Economist Javier Ortega says Europe must become more competitive."For our European welfare state to be maintained there have to be changes. Essentially we have to adapt more quickly to competition from other countries. It is not like in the past," he said.

Europe may have emerged from recession, but its effects are only now becoming clear. With the euro currency under threat, the pain of government cuts will be felt for many years to come.

For job-hunter Patricia Martinez, this day brought no change of luck. And like millions of people across Spain, she will be back again in the morning looking for a new job and wondering how the situation can improve.

You May Like

NASA: Pluto Has Blue Sky

New photos also reveal the presence of water ice More

Report: US to Sail Warships Near Disputed S. China Sea Islands

Move will signal nonrecognition of Chinese territorial claims over area, Financial Times reports, citing senior US official More

Study Describes Ancient Deltas, Lakes on Mars

Research builds on recent NASA announcement that water flows on red planet today More

This forum has been closed.
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Syrian Village Community Faces Double Displacement in Lebanoni
John Owens
October 08, 2015 7:32 PM
Driven by war from their village in southwestern Syria, a group of families found shelter in Lebanon, resettling en masse in a half-built university to form one of the biggest settlements of its kind in Lebanon. Three years later, however, they now face being kicked out and dispersed in a country where finding shelter as a refugee can be especially tough. John Owens has more for VOA from the city of Saida, also known as Sidon.

Video Syrian Village Community Faces Double Displacement in Lebanon

Driven by war from their village in southwestern Syria, a group of families found shelter in Lebanon, resettling en masse in a half-built university to form one of the biggest settlements of its kind in Lebanon. Three years later, however, they now face being kicked out and dispersed in a country where finding shelter as a refugee can be especially tough. John Owens has more for VOA from the city of Saida, also known as Sidon.

Video Bat Colony: Unusual Tourist Attraction in Texas

The action hero Batman might be everyone’s favorite but real bats hardly get that kind of adoration. Put more than a million of these creatures of the night together and it only evokes images of horror. Sarah Zaman visited the largest urban bat colony in North America to see just how well bat and human get along with each other.

Video Device Shows Promise of Stopping Motion Sickness

It’s a sickening feeling — the dizziness, nausea and vomiting that comes with motion sickness. But a device now being developed could stop motion sickness by suppressing certain signals in the brain. VOA’s Deborah Block reports.

Video Making a Mint

While apples, corn, and cranberries top the list of fall produce in the US, it’s also the time to harvest gum, candy, and toothpaste—or at least the oil that makes them minty fresh. Erika Celeste reports from South Bend, Indiana on the mint harvest.

Video Activists Decry Lagos Slum Demolition

Acting on a court order, authorities in Nigeria demolished a slum last month in the commercial capital, Lagos. But human rights activists say the order was illegal, and the community was razed to make way for a government housing project. Chris Stein has more from Lagos.

Video Self-Driving Cars Getting Closer

We are at the dawn of the robotic car age and should start getting used to seeing self-driving cars, at least on highways. Car and truck manufacturers are now running a tight race to see who will be the first to hit the street, while some taxicab companies are already planning to upgrade their fleets. VOA’s George Putic has more.

Video TPP Agreed, But Faces Stiff Opposition

President Barack Obama promoted the Trans-Pacific Partnership on Tuesday, one day after 12 Pacific Rim nations reached the free trade deal in Atlanta. The controversial pact that would involve about 40 percent of global trade still needs approval by lawmakers in respective countries. Zlatica Hoke reports Obama is facing strong opposition to the deal, including from members of his own party.

Video Clinton Seeks to Boost Image Before Upcoming Debate

The five announced Democratic party presidential contenders meet in their first debate next Tuesday in Las Vegas, Nevada. Former secretary of state Hillary Clinton continues to lead the Democratic field, but she is getting a stronger-than-expected challenge from Vermont Senator Bernie Sanders. VOA National correspondent Jim Malone has more from Washington.

Video Ukranian Artist Portrays Putin in an Unusual Way

As Russian President Vladimir Putin was addressing the United Nations in New York last month, he was also being featured in an art exhibition in Washington. It’s not a flattering exhibit. It’s done by a Ukrainian artist in a unique medium. And its creator says it’s not only a work of art - it’s a political statement. VOA’s Tetiana Kharchenko has more.

Video South Carolina Reels Under Worst-ever Flooding

South Carolina is reeling from the worst flooding in recorded history that forced residents from their homes and left thousands without drinking water and electricity. Parts of the state, including the capital, Columbia, received about 60 centimeters of rain in just a couple of days. Authorities warn that the end of rain does not mean the end of danger, as it will take days for the water to recede. Zlatica Hoke reports.

Video Russia’s Syria Involvement Raising Concerns in Europe

European nations are joining the United States in demanding that Russia stop targeting opposition groups other than the Islamic State militants as Russian warplanes continue to conduct raids in Syria. The demand came in a statement from Britain, France, Germany, Qatar, Saudi Arabia, Turkey and the United States Friday. VOA Europe correspondent Luis Ramirez reports.

Video Nano-tech Filter Cleans Dirty Water

Access to clean water is a problem for hundreds of millions of people around the world. Now, a scientist and chemical engineer in Tanzania (in East Africa) is working to change that by creating an innovative water filter that makes dirty water safe. VOA’s Deborah Block has the story.

Video Demand Rising for Organic Produce in Cambodia

In Cambodia, where rice has long been the main cash crop, farmers are being encouraged to turn to vegetables to satisfy the growing demand for locally produced organic farm products. Daniel de Carteret has more from Phnom Penh.

Video Botanists Grow Furniture, with Pruning Shears

For something a bit out of the ordinary to furnish your home, why not consider wooden chairs, crafted by nature, with a little help from some British botanists with an eye for design. VOA’s Jessica Berman reports.

VOA Blogs