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Spain

Yearbook 2012

Spain. No brightening was seen during the year in the economic crisis that hit Spain very hard. The credit and real estate bubble that burst had put the country in a downward spiral. According to countryaah, the newly-appointed Conservative government invested in new savings packages with increased VAT, reduced unemployment benefits, continued frozen wages and sharp cuts in health care and education. Nevertheless, unemployment continued to rise and rose to over 25% during the year, and for young people over 50%. The budget deficit was large and government debt grew.

2012 Spain

Confidence in the state's finances was at the bottom. Market interest rates were pushed upwards and were around 7%, which was considered a pain limit that could not be passed without external support. Much of the turbulence centered on the crisis banking sector. In June, the EU agreed to emergency loans of up to EUR 100 billion to cope with the banking crisis. The state gradually took control of four banks, and in November the EU approved the restructuring plans for them.

But despite constant rumors that Spain would at any time become the fourth euro area to apply for EU funding, and despite the clear sign of such support, no Madrid request for money came from the EU. The reason was assumed to be that Prime Minister Mariano Rajoy wanted to highlight that Spain was doing well and that he wanted to avoid tough reform programs dictated from the outside. Instead, he presented a tight budget in September, with austerity measures of 40 billion euros.

A few general strikes were announced and hundreds of thousands of people gathered in protest against the cuts. The demonstrations degenerated several times in violence. A well-known suicide in November, when a 50-year-old woman jumped off the balcony when she was to be evicted, aroused great anger and resulted in an agreement on a two-year halt for evictions of the most vulnerable. The crisis in the real estate sector had led to 400,000 people being evicted from their homes in a few years.

An effect of the crisis was also a strong separatist wave, despite the fact that several indebted regions were forced to ask the central government for emergency loans. The question was raised whether the country would ride out the difficulties with its borders intact. In the regional elections in the Basque country in October, the nationalist party PNV and the separatist Bildu together won a clear majority. At the same time, however, Rajoy's conservative government party went ahead in the regional elections in Galicia, which was interpreted as voters there nonetheless accepting the crisis management policy.

Catalonia was the region that particularly challenged the central government of Madrid. When the Catalans gathered in Barcelona on their national day in September, more than a million people participated, and something unexpected came to focus on independence. Catalonia's Prime Minister Artur Mas announced a new election in November and expressed the view that a referendum would then be held on independence. However, the election results did not give a completely clear answer. Mas's right party CiU lost mandate, although it remained the largest. Instead, the separatist left party ECR went ahead. The two stood far apart, even though they shared the demand for strengthened self-government.

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