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Audrey Folliot

Woes Continue for Spanish Economy

The European Union’s economy has been suffering since the implementation of the Euro Zone. Some of the greatest European economies fell, leading to the downfall of many others: Greece, Italy, Spain…In Spain, the economic situation is critical. Since the end of 2011, Spain fell back into recession, with the Gross Domestic Product going down 0,4% in the first and second trimesters of 2012, according to Agence France Presse.The rise of the Value Added Tax, known in Spain as IVA, to 21% from 18% last September has done nothing to help the population deal with the crisis. With massive strikes and the rise of criminality (especially thieves), Madrid has been the theatre of many events well documented by the media.More and more people live on the street or are forced to move to smaller apartments, unable to find a job in this period of crisis. The unemployment rate is at its highest, evaluated at a record 26%, which means around six million jobless citizens and counting...However, Conservative Spanish Prime Minister Mariano Rajoy seems to believe that his country is going to see the light at the end of the tunnel this year. He is positive that things are getting better and declared, in his state of the nation address, that he had saved the country from economic disaster. He reminded the population that he had reduced the Spanish 2011 deficit of 9.4 percent to less than 7 percent of the economic output in 2011.This number is still higher than the deficit of 6.3 percent of the GDP that Spain had agreed with Brussels to attain last year, but it is a good start considering the critical economic situation of the country. Economists from the IE Business School of Madrid believe that the country will probably go past this objective, making it… Read More