Spain slides back into recession.

[Os Cangaceiros]

Spain confirmed Monday it was officially back in recession as the country's economy shrank 0.3 percent in the first quarter compared to the previous three months.

This is Spain's second recession in three years. The contraction follows a similar decline in the final quarter of last year. Two consecutive quarters of economic contraction constitute a technical recession.

The country joins seven other economies in the 17-member eurozone — Belgium, Ireland, Italy, the Netherlands, Portugal, Greece and Slovenia — and three other members of the broader European Union — the U.K., Denmark and the Czech Republic — in recession.

The National Statistics Institute said that compared to the first quarter of 2011, the economy shrank 0.4 percent. The Bank of Spain last week said the economy had shrunk 0.4 percent on the quarter. The statistics institute's findings are taken as the official figures.

Spain is struggling after the collapse in 2008 of a property bubble that had fueled nearly a decade of solid growth. It now has 24.4 percent unemployment and a deficit of 8.5 percent as of the end of 2011, which it must reduce to 3 percent in 2013.

Monday's release came days after Spain had its debt rating downgraded by Standard & Poor's by two notches from A to BBB+, citing a worsening budget deficit, worries over the banking system, and poor economic prospects.
The credit rating agency followed this up Monday by lowering long- and short-term ratings on 11 of Spain's top banks — including Banco Santander SA, the eurozone's largest bank by market capitalization — and warning that a further 5 banks could also see the credit ratings cut.

Spanish banks are discussing creating a private entity that would assume their so-called toxic assets — defaulted mortgages and other non-performing loans stemming from the collapsed real estate sector — an official at the Economy Ministry said Monday. The creation of such an organization is designed to take the burden of trying to sell foreclosed properties off the banks and allow them to concentrate on providing credit to the private sector.

The official added that banks would only be able to transfer toxic assets if they had already set aside provisions under existing government rules. The government would not inject any taxpayer money into the creation of such an entity and its role would be limited to setting up rules for how it would work. The official spoke on condition of anonymity in line with ministry rules.

Sunday saw tens of thousands people march throughout Spain to protest the conservative's government batch of emergency reforms and austerity measures.

But speaking the same day, Prime Minister Mariano Rajoy said the government would continue to make reforms week by week, claiming the gravity of the situation required this.


http://www.foxnews.com/world/2012/04/30/statistics-office-confirms-spain-back-in-recession/

[Ostrinski]

Wonder if there will be any demos or anything in the next few weeks.

[NewLeft]

Wonder if there will be any demos or anything in the next few weeks.
A revolution! Just in time. ;)

[robbo203]

A key factor here is the construction industry. Its not so long ago that Spain experienced a boom in speculative developments particularly along the Med and this was closely connected with tourism. Year after year there were sharp increases in the influx of Northern European immigrants - British , Dutch and German in particular - seeking the good life under the Andalucian sun. Where I live which is somewhat inland, some of the pueblos around here have substanital minorities of immigrants - particularly the Brits.

How different the situation is today. The talk in the local bar is all about returning to the UK. Most estate agents have shut up shop around here and there is a pervasive seige mentality around. The whole atmosphere of the place is totally different from a few years back.

In Spain there are nearly 4 million empty houses. Not only that there are shopping complexes , offices, factory developments and whatnot all over that stand half completed, frozen in time. Never mind the immigrants, the Spanish workers are suffering terribly with unemployment up to 22%. House repossessions by the banks are a daily phenomenon on the news, which houses are then resold at knockdown prices but even then there is no guarantee that they will be sold.

With this huge backlog of unsold properties this is going to have a depressing effect on the housing market for years to come. Eventually price levels will drop to the point at which it once again becomes an attractive proposition to buy property but it will have been at the cost of a huge amount of human suffering

[Workers-Control-Over-Prod]

You should just stop reading or listening to fox news. This is by all means not recession, it is a depression. Over 24% unemployment, Spaniards being forcibly evicted from 164 houses a day, over 50% real youth unemployment... let's not talk about underemployment... Spain has been growing under 3% since a few years now definition of a recession. But it just now turned worse than slow growth, they are in a depression. Netherlands is in a Recession with -1% GDP shrinkage in 2011 although they had worse growth than Spain, that was mostly caused because the global demand for what Netherlands relies on a lot (a lot of means of production sector) has fallen as investment into highly automated sectors suffers from the low rate of profit in this (banking) debt, system crisis. A dutch firm for instance, that produces mainly computer chip building machines, fell 24%(!!!) in production. LOL, there is a depression approaching, recession was 2008-2011. Depression as in: Greece, now Spain, soo Portugal will fall even lower, Italy... France?

[Workers-Control-Over-Prod]

A key factor here is the construction industry. Its not so long ago that Spain experienced a boom in speculative developments particularly along the Med and this was closely connected with tourism. Year after year there were sharp increases in the influx of Northern European immigrants - British , Dutch and German in particular - seeking the good life under the Andalucian sun. Where I live which is somewhat inland, some of the pueblos around here have substanital minorities of immigrants - particularly the Brits.

How different the situation is today. The talk in the local bar is all about returning to the UK. Most estate agents have shut up shop around here and there is a pervasive seige mentality around. The whole atmosphere of the place is totally different from a few years back.

In Spain there are nearly 4 million empty houses. Not only that there are shopping complexes , offices, factory developments and whatnot all over that stand half completed, frozen in time. Never mind the immigrants, the Spanish workers are suffering terribly with unemployment up to 22%. House repossessions by the banks are a daily phenomenon on the news, which houses are then resold at knockdown prices but even then there is no guarantee that they will be sold.

With this huge backlog of unsold properties this is going to have a depressing effect on the housing market for years to come. Eventually price levels will drop to the point at which it once again becomes an attractive proposition to buy property but it will have been at the cost of a huge amount of human suffering

This is the problem comrade: Even if prices lower in Spain (Greece, Italy etc.) it will not affect the ability of Spain to deal with this problem that caused this crisis really. The Euro is a currency union, this means you do not have a sovereign trade mechanism to lower your exchange rate. It's all fucked the Euro, and maybe eurozone. I hope not, i have lived now half my life in eu, and i remember the borders, and i like it a lot more without borders, now i never even know whether i crossed the border to austria or italy yet, it is really great, also in the economic capability of course with the deregulation and liberalisation relations. If the current neo-liberal EU is not replaced by a social EU (i.e. centralised wage policies to control inflation and continental prices), it looks like there could again be nationalism/war. I am not sure, but either there is a social eu that can progress the economic benefits of the last ten years of eu and not only in capital but also for european people, or there are again economic problems on this small continent, which means traditionally war and nationalism etc. "Socialism or Barbarism"

[Firebrand]

Spains economy was always a ticking time bomb. For years and years there was a massive building boom with houses being sold at massively overinflated prices to expats. The housing market was always going to collapse, my dad saw it coming in 2002. The only major source of employment in most of andalucia has been the building industry, so once the bottom dropped out of the housing market it was always going to be a mess. Most farmers are surviving off of EU subsidies on olive oil, but the olive farming industry is destroying the topsoil so that's on borrowed time. The worldwide economic crisis is making thigs worse by reducing tourism, another key industry, but that was going downhill already as most tourist had started going further afield.
Basically it was always a disaster waiting to happen, and now that its happened it's only going to get worse.

[Zav]

Economic depressions suck to be in, but at least we'll see a resurgence in the Left. Who knows? Globalisation might cause Capitalism to collapse relatively soon.

[Os Cangaceiros]

You should just stop reading or listening to fox news.

Uh, the article was written by the Associated Press, not Fox News. It's just posted on FN's website.

[Revolution starts with U]

Related question; has Spain recently implemented any austerity measures?

[LeftAtheist]

Related question; has Spain recently implemented any austerity measures?

Yes, they have, though I'm not sure what measures specifically. This article mentions cuts in health and education and protests against them:

http://www.aljazeera.com/news/europe/2012/04/201243003310476658.html

[Left Leanings]

Related question; has Spain recently implemented any austerity measures?


Yes, they have, though I'm not sure what measures specifically. This article mentions cuts in health and education and protests against them:

http://www.aljazeera.com/news/europe/2012/04/201243003310476658.html

If the austerity measures are anything like the brutal cuts, currently being implemented in the UK, there are going to lots of angry people ;)

[LeftAtheist]

If the austerity measures are anything like the brutal cuts, currently being implemented in the UK, there are going to lots of angry people ;)

The situation in Spain is somewhat more severe than here in the UK, I think. It's bad here of course, but Spain has it even worse. Their unemployment is at 25% (highest in the EU) and it's only going to go up. Course, the UK is going that way, with Dave and Gideon in office.

[Left Leanings]

The situation in Spain is somewhat more severe than here in the UK, I think. It's bad here of course, but Spain has it even worse. Their unemployment is at 25% (highest in the EU) and it's only going to go up. Course, the UK is going that way, with Dave and Gideon in office.

All the early indications on the ground in the UK, are that frontline services are being cut to shreds, and that services that were previously marked as 'untouchable', are now being axed.

A senior local government employee told me today, that she will soon be faced with choices as to whether keep libraries open and sack social workers, or close libraires and maintain social workers.

And in terms of the Work Capability Assessment (WCA), carried out by private company Atos, on behalf of the Department of Work and Pensions, the boot is well and truly being put into disabled people. I have been staggered by the cases I have come across, and so have many of my asscociates and colleagues.

[Workers-Control-Over-Prod]

Uh, the article was written by the Associated Press, not Fox News. It's just posted on FN's website.

Well, then stop reading AP! There is a lot better bourgeois news stations, i recommend reading the business press because they are not as self censored as the normal bourgeois press and since they have a social position in production, need to know as best the truth about the world situation. Wall Street Journal is imo the best resourceful american newspaper. Stay away from "liberal" newspapers though, anything that sounds like it is too social, is censored by the board of directors that pressure the editors.

[Workers-Control-Over-Prod]

All the early indications on the ground in the UK, are that frontline services are being cut to shreds, and that services that were previously marked as 'untouchable', are now being axed.

A senior local government employee told me today, that she will soon be faced with choices as to whether keep libraries open and sack social workers, or close libraires and maintain social workers.

And in terms of the Work Capability Assessment (WCA), carried out by private company Atos, on behalf of the Department of Work and Pensions, the boot is well and truly being put into disabled people. I have been staggered by the cases I have come across, and so have many of my asscociates and colleagues.

Yes, i saw a report by the guardian about this being the case, disabled people being hurt worst or rather being the first cut.

[Left Leanings]

Yes, i saw a report by the guardian about this being the case, disabled people being hurt worst or rather being the first cut.

Capital have been building up to this for a long time, comrade.

There has been talk for years and years, of significant cuts to disability benefits. There was much concern among my peers about it. But it never did quite materialize.

The result has been complacency. When the ConDems announced there latest measures, many believed it was just the usual hype and noises coming from the government.

Not so. This time, they mean exactly what they say.

[Os Cangaceiros]

Well, then stop reading AP! There is a lot better bourgeois news stations, i recommend reading the business press because they are not as self censored as the normal bourgeois press and since they have a social position in production, need to know as best the truth about the world situation. Wall Street Journal is imo the best resourceful american newspaper. Stay away from "liberal" newspapers though, anything that sounds like it is too social, is censored by the board of directors that pressure the editors.

AP is actually where most American newspapers get their primary international news stories. Including the Wall Street Journal, I'd imagine, unless they get their wire news from a non-US wire like Reuters. I don't see why I should stop reading it.

It's also weird that you'd encourage me to read the WSJ while poo-pooing Fox News, seeing as how they're both Murdoch publications (who stamps everything he touches, from the NY Post to Fox News to the WSJ, with the same brand of trashy sensationalism.)