Spanien - Barcelona
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rain in Barcelona / regn i Barcelona
After property prices tripled during the decade from 1996 to 2006, the bubble burst in 2008. Spanish banks saw their lenders - building companies, propert investors, ordinary people - more and more unable to pay back their loans or mortgages. The government had until then no budget deficies, but everything changed. It started raining.
rain over Costa Brava / regn över Costa Brava
Several small banks that risked bankruptcy, were bunched together in the "Bankia" bank. The government became one of the owner and spent huge sums trying to save it. But other banks followed the downward spiral. Unemployment started rising. During the good years, the Spaniards had access to low-interest loans and could easily borrow for a new house or even a vacation. The boom in construction raised wages and the increase in production costs was more than 40% over the same increase in Germany. The Spanish industry found it hard to compete in the EU-zone - and elsewhere. Lay-offs followed.
Paella, red wine and gambas. Cheap and nice. / Paella, rödvin och räkor. Billigt och gott.
Now unemployment is around 25% of the work-force, for youth under 25 years, more than 50%. Huge budget deficits and cuts. The education budget has been reduced with one third. Governmental salaries lowered with 10% during the last years. The government acquired promises of a 100 billion euro loan for the Spanish banks in June 2012.
Will that be enough? Maybe. If the Spaniards think everything will be better, then property prices will stabilize and the banks can be assured that their loans are safe. But if everyone is convinced it will be even worse, then awaits a long fall to hit the bottom. For us all.
see TV-report "TV-Nytt" YLE Finnish TV
© Axiom Film / Lennart Berggren juni 2012