Has SPAIN moved on from the FINANCIAL CRISIS? – VisualPolitik EN


Have you ever travelled to Spain? Have you ever visited Barcelona, Madrid or
the Canary Islands? Well, if you have, I’m sure there is something
that might have surprised you. Despite the fact that Spain is in a crisis
and has the second highest unemployment rate in all of Europe, it totally looks like a
wealthy country. The cities are clean, the roads have brand
new pavement, there are international airports in every other city and there’s a state
of the art high speed train throughout most of the country. At least on the surface, Madrid has no reasons
to be jealous of Zurich or London. Then again, we are talking about a country
that was at the edge of bankruptcy not such a long time ago and that now has gone through
one of the biggest political crises in their recent history. The Spanish Premier, Mariano Rajoy will have
to leave the Government. The Congress has passed an impeachment bill. Impeachment means that the Congress, that
is, the legislative power, votes to kick the executive out. Unlike other countries like America, in Spain
you need to propose an alternative government that will substitute for the former. This makes impeachment attempts almost impossible
to pull off in this country. But these are strange days in Spanish political
life. The brand new Spanish president, the social
democrat Pedro Sanchez has managed to convince the radical left, the nationalist right, and
the independent Catalonian parties to vote against the conservative Government of Mariano
Rajoy. They all have one thing in common: they didn’t
want more of this. And now you might wonder… Why did Rajoy have so many haters? Well… you might think it’s corruption. And, of course, this is the official reason. But beyond the surface is way more. As we said before, Spain is one of the most
damaged countries from the big financial crisis of 2008. And the former government likes to brag about
their economic achievement with statements like this one. “It has been a honor to leave this country
in a better shape than I found it” –Mariano Rajoy This is why, in today’s video, we have a
lot of questions cover. First… has Spain gotten over the crisis
already? Despite some economic growth and unemployment
reduction, this country still has more than a 16% unemployment rate. And other EURO countries like Ireland are
growing faster than Spain. So… can we really say they have left the
financial crisis behind? And if so… what credit should we give to
the conservative government? Is it a good moment to invest in Spain? Today, we are going to answer all of these
questions but before we do, let’s take a look back at history. MEN IN BLACK In the year 2002, the EUROZONE was created. All of a sudden, Spain, Germany, France and
many other countries started to use the same currency, the EURO, and the same interest
rates, the ones that the European Central Bank fixes. This seemed to be a great idea. Having the same currency, a German bank can
lend money to a Spanish company on the same conditions as they would with a German company. But these advantages come with a risk. If Spain goes bankrupt, this German bank,
with Spanish debt, might go bankrupt too. In other words, if a country does poorly,
they might spread the problems to other countries. This is why when you join the EURO, you must
follow some rules. One of them is that no country can have a
deficit bigger than 3%. This means they cannot spend more than what
they collect in taxes. This said, let’s go fast forward in history. 2008, year of the international financial
crisis. Many European countries suffer. Spain among them. Suddenly, the unemployment rate goes sky high
til it’s surpassed 20%. This means that, all of a sudden, the Government
collects little money in taxes and… Do you remember those international airports
and high speed trains I told you about? Well, they are not cheap. And this is why the inevitable happened. Spain, Greece and Ireland had the highest
budget deficits in the EU in 2012 So, while the maximum deficit a Euro country
could have was 3%, Spain had 10%. This meant nobody wanted to lend money to
their Government. At the end of the day… How are you going to pay it back if you spend
10% more than what you collect? If you’ve followed VisualPolitik for a long
time, you already know what happens when investors don’t trust your credit reliability, right? What do they do…? Exactly! They ask for higher interest rates. Now listen, in the EUROZONE, we have an index
to measure the chances of a country defaulting: the so-called RISK PREMIUM. Basically, what they do is take the most trustworthy
debt bond that exists in Europe. This is the GERMAN bond. Then, they compare the interest rate of the
German Bond with the interest rate of the other ones. The number that you get with this comparison
is called the RISK PREMIUM. So in the year 2010, the Spanish debt had
a risk premium of 50 points. That was OK. One year later, it had 250. 5 times more. Spanish Bonds at Risk as Contagion Gathers
Force And this is when the MEN IN BLACK came into
picture. Yes, the men in back was the name given by
the journalist to the European Central Bank workers. These ECB people went to the most problematic
countries in the EUrozone and requested that they follow the rules. Basically: it says right here that you can’t
have a deficit bigger than 3% but you’re having it your way. Stop wasting money like crazy or we’ll punish
you. In countries like Ireland, these men in black
were especially strict. In some, like Italy, they even forced the
parliament to choose another prime minister who was more fiscally responsible. But… what happened in Spain? What did these men in black do in the country
of sangria and paella? Let’s have a look! THE QUIET MAN November 20th, 2011. This is the day when the Spanish People’s
Party kicks ass in the elections. The conservative leader, Mariano Rajoy becomes
one of the most supported leaders in Europe, only surpassed by Viktor Orban in Hungary. The Spanish People’s Party or, as it’s
better known, the PP, got 53% of the seats in Congress and they ruled in most of the
regional governments. Basically, Mr. Rajoy might as well have changed
the name of Spain and started calling it RAJOYLAND. He’d have had enough support for it. So what was his political program during the
elections? Well… basically, Rajoy said the European
Central Bank ‘Hey guys! Don’t worry, I’m conservative so I know
my economics! First I’m gonna reduce taxes and make lots
of cool business friendly reforms that would make this country look like Silicon fucking
Valley. Then those companies will make billions, hire
people, and booom! Deficit problem solved!’ Basically, the whole Rajoy campaign was based
on the idea of low taxes. The mantra for any problem was to reduce taxes
on everything. But, my dear viewers… you know that what
you say during the electoral campaign is one thing, and that what you do just ONE DAY after
you take office is another thing entirely. “This government must raise some taxes for
some time” During the first months of Rajoy, the Government
raised ALL of the taxes, including VAT, income tax and all the special taxes on tobacco and
gasoline. Yes, a conservative Government made the biggest
tax increase in Spanish history. And what about all those wonderful business
regulations that would turn Spain into the new Silicon Valley? Well… you can imagine what happened with
that too. So what happens when you promise a business
friendly agenda and come up with the opposite once you’re in office? Well… voters, angry as they are, cannot
do anything until the next elections. But the international investors… they can
give you their backs the very moment you break their trust. And this is exactly what happened in Spain. Spanish economy in “huge crisis” after credit
downgrade Basically, the Spanish debt bond fell under
the category of trash in just a glance. Do you remember the RISK PREMIUM I told you
about before? Well, so at some point, it went to the Satanic
figure of… 666. Many Spanish banks where ot the edge of bankruptcy. And nobody wanted to buy Spanish debt. Spain was about to collapse. And that would mean no money to pay doctors,
school teachers and tax collectors. Only one team could solve this problem. And they were… the MEN IN BLACK. Spain to Accept Rescue From Europe for Its
Ailing Banks So what was this bailout all about? Basically, Europe would borrow money at a
lower interest rate so Spanish banks would not go bankrupt. In exchange, they requested the Government
to cut its spending. And here is where Mariano Rajoy did his big,
badass movement or as we like to call it, RAJOY-OMICS. Basically, once the European Central Bank
had already bailed out the banks, Rajoy went to those men in black and said… ‘Hey, you, ECB guys… you think you can
tell me what to do? Look, see these three fingers here??? Read between the lines. Rajoy’s theory was that Spain was too big
to fail. So, despite having the worst credit rate you
can imagine, the European Central Bank would eventually buy all the debt bonds without
asking for any interest rate. How? Printing money! With this Money, Spain could keep being as
it was without making any costly reforms. But why would the ECB accept all of this? Easy… Spain has the 4th biggest economy in Europe. Nobody’s gonna let it fail. So months kept passing. Unemployment kept growing and so did the Risk
Premium. The Conservative government of the People’s
Party, far from making business friendly reforms, did the opposite. Do you want an example? Here it is. Prior to them, professional services like
taxi drivers where going to be liberalized. But, in Spain, taxi driver associations are
well connected with the conservatives. So the right wing passed a bill to protect
taxi drivers from competition. This is why, many sharing economy companies
like UBER and AirBNB now have so many restrictions in the Spanish market. The question is… do you think Rajoy’s
challenge to the European Central Bank worked? And the answer is… YES. “The ECB is Ready to do whatever it takes
to preserve the euro and believe me, it will be enough” SUPER MARIO COMES TO THE RESCUE For months, the ECB president, Mario Draghi,
said that he would not compromise with Spain. Basically, Rajoy wanted him to print more
money so he could buy Spanish debt. In other words, Rajoy wanted the wealthy EURO
countries like Germany and Finland to give money to Spain at no political cost. Just because… reasons. It doesn’t sound very fair, does it? Well… sometimes life is not fair. And Rajoy was right. Spain was too big to fail. ECB could be ready to buy weak Italian, Spanish
bonds Since then, 25% of the Spanish debt is in
ECB hands. And those words from Mario Draghi, saying
he would do ‘whatever it takes to save the Euro’ were like magic. One day at a time, the Risk Prime of Spain
started falling. Investors started buying debt bonds because
they knew they had the backing of the ECB. And this is how Spain could keep piling on
more and more debt. This country now has a debt that represents
more than 100% of their entire GDP. Meanwhile, the rest of the European countries
have started growing. Since 2012, Germany has become the biggest
export powerhouse in the entire world. China has gone from being the World’s factory
to developing a brand new consumer market where everybody can sell their products. In other words, EVERY European country is
growing now. And that, of course, includes Spain. Nonetheless, this was good news. And every government likes good news. Rajoy: “Spain has gotten over the crisis in
record time” This is already 2015. In this year Spain has elections again. And the government decides to celebrate the
end of the crisis with a tax cut in the middle of the electoral campaign. Brilliant, right? You raise taxes at the beginning of one election
and then, one year before the next election, you put them where they used to be. And then, guess what happened right after
Rajoy won the elections again! Yup, you got it right! Rajoy raises taxes… again
In 2017, the Government will have to cut 15 billions deficit. As you can imagine, raising and reducing taxes
depending on when you have elections is not the best policy if you want to attract foreign
investors. Add red tape that’s almost the same, if
not more prevalent than before and all the territorial problems and you’ll understand
why the unemployment rate in Spain is still at 16%. While other EURO countries like ESTONIA and
IRELAND, which had really bad recessions, are now way better than 10 years ago, Spain
remains almost the same. So now it’s your turn… Do you think the brand new Spanish Government
can do any worse than the previous one? Do you think Spain has solved its crisis or
do you think there’s still a lot of work to do there? Please, leave your answer in the comments
section below. Also, visit our friends from RECONSIDER MEDIA,
the podcast that provided the vocals in this episode that were not mine. And don’t forget to support us on PATREON,
where you’ll also gain access to exclusive content and many wonderful gifts. If you liked this video, give us a thumbs
up and, as always, I’ll see you next time.

100 thoughts on “Has SPAIN moved on from the FINANCIAL CRISIS? – VisualPolitik EN”

  1. First, What happen with the audio???

    Second: The problems in Spain are two, One Corruption Two the increase of the corruption, The tax rate is not the problem the real problem, the real problem is no one want to pay the political consequences that other governments did in order to keep the power, and nowadays those problems , such as employment legislation or process to set up a company, are so big and complex that whoever try to solve it will be seen as a bad governance and the most probably is that his/her party lost power as a consequence as it will be an inevitable impact on the power control of Spain

    From my point of view, the problem that can destroy the EU, if no one face that problem RIGHT NOW, will be the corruption. Because it is becoming a common disease among all its members.

  2. You made some small mistakes. Spanish ratings never got the junk status. They never were close to having the worst rating. Also debt is around 98% thats high, but still less than for example Japan(220%), Greece(180%), Italy(130%) and US (105%). Spain had low figures when the crisis started. Thats why they have lower debt now than most other countries that had a crisis. Also their budget deficit is now within the -3% which the EU wants. Unemployment is still 15% but the fastest decreasing of all European countries.

  3. Historically, the Left is known to spend even more. They are traditionally social and that means big governments and bloated public service. Yes, they can do worst.

    However, the jury is still out on who would fail first; turkey or Spain. I bet on Turkey and the shakeup will take Spain down too. Maybe others…

    The biggest problem that I see with just about every European country is bureaucracy. Not only that European governments are stiff and make people go through 20 offices and a ton of paper work, this mentality is also in the marketplace. It seems that buying a whole complex building in Montreal Canada is easier than renting a 1 bedroom apartment in England. Germany is even worse from what I hear.

    Europe has to loosen up their rules. You had a couple of great videos about Israel so let me tell you that when I grew up in Israel bureaucracy was worse only in Russia. It was practically impossible to do anything without knowing someone in government offices. Years later Bibi changed all that and Israel today is an amazing place to do business. Euro HAS to do the same.

    By the way, unemployment of people under 30 is like 30%. The reason unemployment is low in big cities is mainly because that's where most government and public sector people live. I think something like 20% of people are employed in he public service. That's not good.

  4. Poor QUALITY… AM getting impatient with ur awful topics and research now… Used to love the company stories
    And ur caption is not working

  5. Will Northern EU move away from the rest of the EU? They manage everything better that the rest, why they should put up with the southern drunken craze.

  6. What's up with the awful sound? The guy already has an annoying voice and to top it off, the audio is really bad…

  7. Spain has been politically backwards for a looooong time. They have been playing catch up with the rest of Europe for a few centuries now.

  8. Damn if you do and damn if you don't… Nothing Spain does it's good for him. I wonder if he'll ever say anything negative about the UK and all the laundering of drug money they do in the banks of London and specially those small islands in the Caribbean?

  9. Lol the part where he was pointing th middle finger and silicon fucking valley😆😆😆😂😆😂😂😂😂😆😂😂😭😆😂😆😂😂😂😂😂😂😂☺️

  10. ‪#TheEuropeanUnion is one real cause, 10 European nations are declining, independence is the answerable Word‬.

  11. What happened to this channel? 😲😲😲 it's so vulgar and explicit. And then there's bad audio. I am let down. 😞😞😞😞😞

  12. To those who thinks using earphone for this audio is a good idea……. you're clearly insane or misleading people on purpose…..

  13. The high unemployment is more of a social and cultural problem than economic one. Young Spaniards stay at home well into their 30's and are happy to take summer jobs and unemployment benefit for the rest of the year. The unemployment benefit is crap but when you live at home with Mom and Dad what do you need money for anyway. It is true that the modern society seams to be have many children returning home after years of living alone, However in Spain they just never left in the first place and why should they if they don't get married or want to have children themselves they just stay at home. Because they claim benefit there is a very high unemployment rate for the under 25's but like i said living at home is easy street and culturally speaking family life is the most precious thing anyway so the parents are no way going to throw them out ever. Over 25's are a bit different once their friends have jobs and buy new cars they get jealous and look for a proper job so they can also have a new car and impress the ladies. However the girls are most likely to work from a younger age as the guys don't have any money to spend on them, so they just get a job and buy whatever they like for themselves. Even when a young Spaniard gets a job and has a new car a new mobile phone and new clothes he or she will still stay at home. Family life is the most important thing for them, I know some houses with 4 generations living in them. So Buying a house in Spain is difficult and expensive for Spaniards but relativity cheap for other European countries. 50% of the properties are still vacant from the massive bubble that burst 10 years ago and banks will do anything to get them of their books literally 1000's and 1000's of them. 2 bed 2 bath apartments with a garage and communal pool on the med coast cost just € 70k. and even cheaper in land. Owning your own property is not high on the agenda for many Spaniards as they have permanent accommodation at Home. Most of the apartments were built just for foreigners who wanted to retire from colder countries, and cure their aches and pains but boom went to bust and the pace of life in Spain is very slow anyway so a lot of the properties are still empty. There is high unemployment for the under 25's and i don't see that changing any time soon. So if your in the EU there are actually lots of jobs available all over the country, speaking Spanish helps obviously but in some resorts and hotels they only speak English or German.

  14. In southern europe countries hit by the crisis, raising taxes is the conservative move. Don't judge things from the american view, as they don't apply.
    Him raising taxes, as a conservative, was the EXPECTED outcome for anyone with a bit of a brain.

  15. I like how he ignores that Germany got Spain into the mess to begin with. Spain ran a tight ship before German baking shenanigans.

    Germany was planning on creating a lending bubble and market crash in Spain, and then have the Spanish pay for it so they could make profit after. Spanish won at the end, though. Good on them.

  16. I partialy understand more why there are some many countries willing to leave the E.U, everything can't be racism

  17. Thank you for doing those Videos. You are really explaining it in a manner that everyone can understand politics and the cause of a crisis. Please keep on going!

  18. is it just me or in almost every country which has a peoples party g.g African countries, Pakistan , Spain and so on they are usually shit for the country

  19. The growth of Spain is based on the slashing of public services and the cutting of salaries to ridicule levels. A big number of young employees now jump from one work to another, all lasting few months, for a monthly check of 800 euros or even less.

  20. Could we perhaps have this video reuploaded with decent audio? I truly could not finish this video because of the hissing.

  21. Do you hate the Spanish buddy? You tune wasn't friendly at all, borderline disrespectful. Also investors interest# people interest, the whole system is garbage everywhere.

  22. I'd love to finish watching your video if the audio quality and the loud "epic" transition sound effects and music weren't such a big "fuck you" to my ears. This is not the first time you guys did this to our ears.

  23. Bullshit. Spain is one of the most filthy countries I've ever visited. Garbage is literally everywhere exept hotel zones in continental spain despite the fact that recycling bins are also everywhere. ( I was in Granada, Alicante and Torrevieja)

  24. Ah, so I have to feed the spanish retards because they cannot fix their shit instead of feeding my own family. Kick these south assholes out of EU. Back to Africa Union, where they belong.

  25. The latest wonderful problem for Spain, France and Italy is that their banks have loaned Turkey's businesses 190 billion euros and now the Turkish lira has tanked they can't pay it back. They can't even afford the interest on those loans so they attempt what is called 'restructuring' of the loans, which means 'We can't pay you so you had better give us some better terms – or cancel them completely'.

  26. Very shallow and often wrong analysis, had a feeling that most of the videos on this channel were bulshit, but didn't have the proper knowdledge to be sure until this one.

  27. Could you do one video on the recent ouster of Malcolm Turnbull and politics of climate change in Australia?

  28. The coming bailout may be the foundation for future sense in finance. However, the elite will need some shifting. Spain will be forced to make internal reforms. Perhaps that cretin leading Turkey will be a blessing in the long-term?

  29. Rajoy should be getting out of jail for his role in the tanker Prestige disaster. It would have saved a lot of grief.

  30. I am personally from Spain, I am devastated with the corruption and tax rates of my beloved country. I have always been a Libertarian advocating for lower corporate taxes, and the power of the free market. We have now had our government replaced with a Democratic Socialist Workers Party which is already advocating for higher taxes. To conclude, my country is one that has a lot of work to be done, and I hope someday we learn from our mistakes and be the world superpower it once was.

  31. My god, how do u guys get such a bad quality audio sometimes? Seems so random. And this has been going on for a long time already. Please fix it

  32. Why is he talking about the 2012 crisis in 2018?… he is a bit negative about it isn't he. Is it because Spain is south and therefore bad economics by any means….

  33. This conservative party promised lower taxes and raised the taxes when they were one month in office. I was expecting an explanation why but you gave none? also no deregulation but there you again also gave no reason why this not have happened. Its a great video visualPolitik but I think this would gave some more insight.

  34. I´m from scandinavia and living in Spain and the ineffeciency of everything here is just on another level you can´t even imagine! But people don´t care, and thats the problem! Shit is gonna hit the fan here when the credit bubble bursts soon, i am happy i don´t own anything here it´s gonna be bad

  35. 3% deficit is measured to GDP, which is about 10% of deficit relative to the budget or to how much they collect in taxes.

  36. Woah Simon Whistle, pretty sure he is the face of youtube RIP you legend!
    Seems like spain is still stuffed, so is italy.

  37. How did Spain go from super power to having budget deficit to begin with? Is it just the age-old story of trade deficit slowly killing the local economy over time?

  38. Spain is till a mess, corrupt to the core. The employment rate given is false, it's more like 30-35%. they just chaged they way they account for the figures, mainly to meet EU expectations.

  39. I know this is late but it must be said……I have no bloody idea why he is saying 'Spainsh President' they have a Prime Minister…..like nearly every other parliamentary democracy (Canada, UK, Australia, Japan etc.)

  40. Yeah, the new government will make Spain sh***er than Mariano left the Government. Sánchez will do whatever it takes to keep in Spanish power…

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