The Basics: The world economic crisis is the core of the reason why unemployment is so high in Spain. The economic crisis caused the fall of the construction/real-estate speculation bank loans. Banks overextended and offered cheap and risky loans for the construction/real estate bubble. When the world economic crisis took place, the bubble burst and banks called in their loans to construction/real estate companies - which they couldn't pay and many people lost jobs and many construction/real estate companies folded. So instead of letting the banks fail and causing a total collapse, the Spanish government bailed out the banks as they were no longer able to offer loans as before - something many companies rely on in order to get ahead. If companies they can't get the loans, they suffer. When they suffer they lay-off people. So then the government was overextended and asked for a bailout themselves from the European Union. So, in order to get this European Union bailout, they were forced to make cuts in everything including health care, education, and everywhere else, putting even more people out of work.
This was like a house of cards ready to fall, based mostly on banks' sketchy loan deals, lack of government regulation, and real-estate-speculation, having nothing to do with regular people. This is why people are so angry. The people aren't to blame and yet they are the ones paying the biggest price.
Saludos, MadridMan
Spain had a nasty revolution in the 1930's. They ended up with a very egalitarian society - almost no one makes a lot of money, but people are taken care of for life by the government.
The result is that it is almost impossible to fire somebody, and the benefits on top of the salary cost the employer an additional 31%. The employers are scared to death to hire anyone because they can not lay them off or fire them if they are poor performers.
I believe that is why it can take you two hours to eat just lunch in Madrid. The shop owners would rather turn business away than get stuck with a bad employee, so they just let the customers sit and wait.
Another problem in Spain- besides the government hiring policies,
is that a lot of their growth was based on debt - basically building
massive amounts of houses on speculation. in 10 yrs, they built
more housing than France, Germany and ltaly, together! There
were golf courses with houses/apts around them, and not a person
living there, and signs and signs for resale. So, when the crash
came, people abandoned them, and that is all bad debt on the books.
All that debt has to work through the system, and until it is
absorbed, not much will change.
Spain cannot be compared to south africa because spain is developed and south africa developing. By developed nation standards spain's unemployment rate is a disaster.
When the socialists under Zapatero took over, unemployment was 8%. Now it is over 25%.
So the Spanish have only themselves to blame for voting PSOE.
Because not too many people have jobs
Because there is a global recession going on, duh!
It may be the highest in Europe, but it's not higher than South Africa's unemployment rate, right?
