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95-613: The Spanish financial crisis led to the lack of interest and investment in the country's music industry as the musical panorama also seemed blurry and quite disappointing. In 2007, the Premios Amigo, which and were presented by the Asociación Fonográfica y Videográfica Española, held its last ceremony after being absent since 2003 due to an intern crisis within the Spanish music industry from 2004 to 2006. In 2012,

190-510: A financial crisis , an external trade shock, an adverse supply shock , the bursting of an economic bubble , or a large-scale anthropogenic or natural disaster (e.g. a pandemic ). There is no official definition of a recession, according to the IMF . In the United States , a recession is defined as "a significant decline in economic activity spread across the market, lasting more than

285-503: A "Precautionary Conditioned Credit Line" (PCCL) package. If Spain applied and received a PCCL package, irrespective to what extent it subsequently decided to draw on this established credit line, this would at the same time immediately qualify the country to receive "free" additional financial support from the European Central Bank (ECB), in the form of some unlimited yield-lowering bond purchases. The turning point for

380-506: A 1974 article by The New York Times , Commissioner of the Bureau of Labor Statistics Julius Shiskin suggested that a rough translation of the bureau's qualitative definition of a recession into a quantitative one that almost anyone can use might run like this: Over the years, some commentators dropped most of Shiskin's "recession-spotting" criteria for the simplistic rule-of-thumb of a decline in real GNI for two consecutive quarters. In

475-427: A VAT increase from 18% to 21%. The government eventually succeeded in reducing its budget deficit from 11.2% of GDP in 2009 to 8.5% in 2011, and it was expected to fall further to 5.4% in 2012. As of 15 June 2012, Spain's public debt stood at 72.1% of GDP, still less than the eurozone average of 88%. If Spain uses the €100 billion credit line to bail out its banks, its debt will approach 90% of GDP. To avoid this,

570-409: A balance sheet recession would be appropriate. However, Krugman argued that monetary policy could also affect savings behavior, as inflation or credible promises of future inflation (generating negative real interest rates) would encourage less savings. In other words, people would tend to spend more rather than save if they believe inflation is on the horizon. In more technical terms, Krugman argues that

665-513: A comprehensive assessment of the depth and breadth of economic downturns, enabling policymakers to devise more effective strategies for economic stabilization and recovery. Recessions in the United Kingdom are generally defined as two consecutive quarters of negative economic growth, as measured by the seasonal adjusted quarter-on-quarter figures for real GDP . The Organisation for Economic Co-operation and Development (OECD) defines

760-588: A few months, normally visible in real GDP , real income, employment, industrial production, and wholesale-retail sales." The European Union has adopted a similar definition. In the United Kingdom and Canada , a recession is defined as negative economic growth for two consecutive quarters. Governments usually respond to recessions by adopting expansionary macroeconomic policies , such as increasing money supply and decreasing interest rates or increasing government spending and decreasing taxation . In

855-463: A key demand component of GDP, fell enormously (22% of GDP) between 1990 and its peak decline in 2003. Japanese firms overall became net savers after 1998, as opposed to borrowers. Koo argues that it was massive fiscal stimulus (borrowing and spending by the government) that offset this decline and enabled Japan to maintain its level of GDP. In his view, this avoided a U.S. type Great Depression , in which U.S. GDP fell by 46%. He argued that monetary policy

950-502: A liquidity trap is expanding the money supply via quantitative easing or other techniques in which money is effectively printed to purchase assets, thereby creating inflationary expectations that cause savers to begin spending again. Government stimulus spending and mercantilist policies to stimulate exports and reduce imports are other techniques to stimulate demand. He estimated in March 2010 that developed countries representing 70% of

1045-464: A new budget for 2013 that would cut government spending by 8.9%. By April 2013, unemployment had risen to 27%, but decreased to around 15%-16.1% as of February 2018, and Spain became one of Europe's fastest-growing economies, thus demonstrating that the country was improving. One effect of the financial crisis is an increase in support for independence in Catalonia . The Statute of Autonomy included

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1140-462: A package of laws that gave more power to the region and would have recognized Catalonia as a nation, although one still within Spain. As with the rest of Spain, Catalonia has had high levels of unemployment. As many as 22% of the economically active population were unemployed, which is still lower than Spain's national jobless rate, yet higher than Madrid's. In 2010, Spain's Constitutional Court weakened

1235-410: A paycheck. The State Secretary for Unemployment states that higher education is a way for the current generation to battle this issue; however, government cuts are occurring that slash university staff salaries and increase the number of students per class. For those paying their own way through their studies, the tough economy has made it nearly impossible to find a job and study simultaneously. Hopes for

1330-833: A recession as a period of at least two years during which the cumulative output gap reaches at least 2% of GDP, and the output gap is at least 1% for at least one year. Recession can be defined as decline of GDP per capita instead of decline of total GDP. A recession encompasses multiple attributes that often occur simultaneously and encompasses declines in component measures of economic activity, such as GDP, including consumption, investment, government spending, and net export activity. These summary measures are indicative of underlying drivers such as employment levels and skills, household savings rates, corporate investment decisions, interest rates, demographics, and government policies (Smith, 2018; Johnson & Thompson, 2020). By examining these factors comprehensively, economists gain insights into

1425-493: A recession including the availability heuristic , the money illusion , and normalcy bias . Excessive levels of indebtedness or the bursting of a real estate or financial asset price bubble can cause what is called a "balance sheet recession". This occurs when large numbers of consumers or corporations pay down debt (i.e., save) rather than spend or invest, which slows the economy. The term balance sheet derives from an accounting identity that holds that assets must always equal

1520-427: A recession. Economist Hyman Minsky also described a "paradox of deleveraging" as financial institutions that have too much leverage (debt relative to equity) cannot all de-leverage simultaneously without significant declines in the value of their assets. In April 2009, U.S. Federal Reserve Vice Chair Janet Yellen discussed these paradoxes: "Once this massive credit crunch hit, it didn't take long before we were in

1615-619: A recession. The recession, in turn, deepened the credit crunch as demand and employment fell, and credit losses of financial institutions surged. Indeed, we have been in the grips of precisely this adverse feedback loop for more than a year. A process of balance sheet deleveraging has spread to nearly every corner of the economy. Consumers are pulling back on purchases, especially durable goods, to build their savings. Businesses are cancelling planned investments and laying off workers to preserve cash. And financial institutions are shrinking assets to bolster capital and improve their chances of weathering

1710-629: A record €376 billion (net) from the ECB in July 2012. Depositors were fleeing Spanish banks; deposits dropped 4.7% from June to July (2012) as money was moved abroad. On 28 November 2012, the European Commission approved the Spanish government 's plan to shrink and restructure three major Spanish banks — Bankia , NCG Banco , and Catalunya Banc — and sell a fourth, Banco de Valencia . This

1805-459: A reliable recession predictor. The curve began re-steepening toward positive territory in June 2024, as it had at other points during that inversion; in every previous inversion they examined; Deutsche Bank analysts found the curve had re-steepened before a recession began. The following variables and indicators are used by economists, like e.g. Paul Krugman or Joseph Stiglitz , to try to predict

1900-415: A self-reinforcing downward cycle, bringing about or worsening a recession. Consumer confidence is one measure used to evaluate economic sentiment. The term animal spirits has been used to describe the psychological factors underlying economic activity. Keynes, in his The General Theory of Employment, Interest and Money , was the first economist to claim that such emotional mindsets significantly affect

1995-635: A sharp decrease in Spain's tourist industry , a rarity in a country with so many coastal towns. Indeed, the EU as a group saw a decline in tourists coming to their countries in 2008 and 2009, with −13% tourism growth in coastal Spain. Despite its traditional popularity with Korean and Japanese tourists, the relatively expensive cost of holidaying in Spain led many to pursue "sun and beach" Mediterranean getaways in Turkey, Spain's tourism rival. However, Spain has also seen

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2090-420: A soft landing would occur, others suggest that a crash in prices is probable. Lower home prices would allow low-income families and young people to enter the market; however, there is a strong perception that house prices never go down. As of August 2008, while new constructions have come virtually to a halt, prices have not had significant movements either up or downwards. The national average price as of late 2008

2185-399: A suspension of the "14-month bonus". Spain, as in other southern European nations, relies heavily on the inter-generational family structure for a significant portion of the social safety net. Employment expectations should be adjusted for this cultural ethos. The unemployment rate for the "principal breadwinner" is 12.4% less than the 25% overall rate (June 2012.) Employment is also found in

2280-403: Is 2,095 euros/m . Housing prices were projected to fall another 25%. Government protections allow banks to avoid marking-to-market to postpone losses. "Spanish housing prices are now falling at the fastest pace on record" dropping 15.2% over the last year. Mortgage holders must continue to pay the debt even after a foreclosure. Banks have begun to accept " deed-in-lieu deals" in which the debt

2375-503: Is about double the overall rate of unemployment. The high unemployment rate, at 56% as of June 2013, has been considered to be overstated. Subtracting students and young mothers not looking for jobs, the actual number is closer to 22%. Large-scale immigration continued throughout 2008 despite severe unemployment, but by 2011 the OECD confirmed that the total number of people leaving the country (Spaniards and non-Spaniards) had over taken

2470-457: Is cancelled if the property is surrendered, allowing the bank to quickly sell and recoup a greater percentage of the loan or turn the property into a rental. Some developments resemble ghost towns . For instance, the town of Valdeluz was constructed for 30,000 people, but had a population of only 700 people in 2011. Ghost airports such as €1.1 billion Ciudad Real Central Airport , Castellón-Costa Azahar Airport and others were built. Due to

2565-522: Is not an official designation" and that instead, "The designation of a recession is the province of a committee of experts at the National Bureau of Economic Research". The European Union, akin to the NBER's methodology, has embraced a definition of recession that integrates GDP alongside a spectrum of macroeconomic indicators, including employment and various other metrics. This approach allows for

2660-401: Is part of a €37 billion EC bailout or restructuring approved in June 2012. It included loss-taking by investors of up to €10 billion, the creation of a " bad bank " to absorb up to €45 billion of failed loans, closing thousands of bank branches, and reducing staff. After having completed substantial improvements over the second half of the 1990s and during the 2000s, which put a few regions on

2755-627: Is referred to as an economic depression , although some argue that their causes and cures can be different. As an informal shorthand, economists sometimes refer to different recession shapes , such as V-shaped , U-shaped , L-shaped and W-shaped recessions. The type and shape of recessions are distinctive. In the US, v-shaped, or short-and-sharp contractions followed by rapid and sustained recovery, occurred in 1954 and 1990–1991; U-shaped (prolonged slump) in 1974–1975, and W-shaped, or double-dip recessions in 1949 and 1980–1982. Japan's 1993–1994 recession

2850-490: The (inverted) yield curve appear to be more useful to predict a recession ahead of time than other variables, no single variable has proven to be an always reliable predictor whether recessions will actually (soon) appear, let alone predicting their sharpness and severity in terms of duration. The longest and deepest Treasury yield curve inversion in history began in July 2022, as the Federal Reserve sharply increased

2945-691: The Great Recession in Spain or the Great Spanish Depression , began in 2008 during the world 2007–2008 financial crisis . In 2012, it made Spain a late participant in the European sovereign debt crisis when the country was unable to bail out its financial sector and had to apply for a €100 billion rescue package provided by the European Stability Mechanism (ESM). The main cause of Spain's crisis

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3040-606: The Statute of Autonomy for Catalonia , which further irritated Catalan secessionist organization. The 2015 regional election was the first to produce a majority for openly separatist parties. Prime Minister Mariano Rajoy insisted that Spain's constitution does not allow for a region to secede. Spain's Basque Country unsuccessfully tried to get such a move approved in Parliament in 2008. Catalan president Artur Mas instead scheduled an independence referendum for 2014 , which

3135-682: The United States , the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER) is generally seen as the authority for dating US recessions. The NBER, a private economic research organization, defines an economic recession as: "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP , real income , employment, industrial production , and wholesale - retail sales ". The NBER also explains that: "a recession begins when

3230-459: The credit ratings of several Spanish banks were downgraded, some to "junk" status. The Bankia bank, the country's largest mortgage lender, was nationalized on 9 May, and on 25 May it announced that it would require a bailout of €23.5 billion to cover losses from failed mortgages. In addition to Spanish banks, other European banks have a sizable presence in Spain. German banks lead with an exposure of $ 146 billion. Germany's Landesbanks entered

3325-450: The fed funds rate to combat the 2021–2023 inflation surge . Despite widespread predictions by economists and market analysts of an imminent recession, none had materialized by July 2024, economic growth remained steady, and a Reuters survey of economists that month found they expected the economy to continue growing for the next two years. An earlier survey of bond market strategists found a majority no longer believed an inverted curve to be

3420-608: The private sector as it pays down its debt. For example, economist Richard Koo wrote that Japan's "Great Recession" that began in 1990 was a "balance sheet recession". It was triggered by a collapse in land and stock prices, which caused Japanese firms to have negative equity , meaning their assets were worth less than their liabilities. Despite zero interest rates and expansion of the money supply to encourage borrowing, Japanese corporations in aggregate opted to pay down their debts from their own business earnings rather than borrow to invest as firms typically do. Corporate investment,

3515-448: The 2008 crisis. Spain's unemployment rate hit 17.4% at the end of March 2009, with the jobless total now having doubled over the past 12 months, when two million people lost their jobs. In this same month, Spain had over 4 million people unemployed, By July 2009, it had shed 1.2 million jobs in one year and was to have the same number of jobless as France and Italy combined. By March 2012, Spain's unemployment rate reached 24.4%, twice

3610-424: The 6% level, approaching the 5% level by the end of 2012. The residential real estate bubble saw real estate prices rise 200% from 1996 to 2007. €651 billion was the mortgage debt of Spanish families in the second quarter of 2005 (this debt continued to grow at 25% per year – 2001 through 2005, with 97% of mortgages at variable rate interest). In 2004, 509,293 new properties were built in Spain and in 2005

3705-663: The Best Music Video one. There was also a place reserved for international acts in the Best International Artist category. In addition to these categories, in each edition an Honor Award will be awarded, with which "the industry will annually recognize the career of an artist whose career has marked a milestone in Spanish musical history." Listed below is a table showing Odeon Awards ceremonies. 2008%E2%80%932014 Spanish financial crisis The 2008–2014 Spanish financial crisis , also known as

3800-503: The ECB facilitate government bond purchases to "avoid an imminent financial collapse". Promised borrowing by the ECB enabled Spain's 10-year yield to stay below or close to the 6% level, settling below the 5% level in the spring of 2013. In 2016, public debt reached 101% of GDP. For the third time in 13 months, Moody's Investors Service cut Spain's rating. On 18 October 2011 Moody's Rating cut Spain's rating by 2 notches to A1 from Aa2 with

3895-452: The ECB to use a lower margin for banks that borrow with Spanish debt as collateral. After a more recent review, Moody's maintained Spain's investment-grade credit rating, removing the pressure on the country's debt. This decision by Moody's assured that Spanish bonds will continue to gain investor support; yields fell 5.50%, a level last seen in April 2012. Although Moody's can still downgrade

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3990-481: The EU pledged to lend to banks directly although it then appeared that the Spanish government might have to guarantee the loans . In June 2012, the Spanish 10-year government bond reached 7%, 5.44% over the German 10-year bond. As Spanish credit default swaps (CDS) hit a record high of 633 basis points and the 10-year bond yield at 7.5% (23 July 2012), Spain's economic minister traveled to Germany to request that

4085-488: The European country with the sharpest plunge in construction, with actual sales down an average 25.3%. So far, some regions have been more affected than others ( Catalonia was ahead in this regard with a 42.2% sales plunge while sparsely populated regions like Extremadura were down a mere 1.7% over the same period). Banks offered 40-year mortgages and, more recently, 50-year mortgages . While some observers suggest that

4180-414: The Spanish economy were already evident far ahead of the crisis, Spain continued the path of unsustainable property led growth when the ruling party changed in 2004 . In these times Spain had already a huge trade deficit , a loss of competitiveness against its main trading partners, an above-average inflation rate, house price increases, and a growing family indebtedness. During the third quarter of 2008

4275-435: The Spanish government. The Spanish government was then expected to give the appropriate amount of money to the respective banks. On 21 June 2012 it was decided that 62 billion euros would be shared among the Spanish banks in need. The European Union warned that rescued banks are subject to control and experts would meet stringent requirements. Since then, the country's borrowing costs have reached levels deemed unsustainable in

4370-442: The Spanish psyche. In addition, tax regulation encourages ownership: 15% of mortgage payments are deductible from personal income taxes. Even more, the oldest apartments are controlled by non-inflation-adjusted rent controls and eviction is slow, therefore discouraging renting. When the speculative bubble popped Spain became one of the worst affected countries. According to Eurostat , between June 2007 and June 2008, Spain has been

4465-460: The Spanish sovereign debt crisis occurred on 26 July 2012, when ECB President Mario Draghi said that the ECB was "ready to do whatever it takes to preserve the euro". Announced on 6 September 2012, the ECB's Outright Monetary Transactions (OMT) program of unlimited purchases of short-term sovereign debt put the ECB's balance sheet behind the pledge. Speculative runs against Spanish sovereign debt were discouraged and 10-year bond yields stayed below

4560-436: The banking sector (for example, the government pardon of the second-in-command at Santander Bank , while all the major parties are significantly indebted with banks, and such debts are extended from time to time) which increased the bubble size over the years. Most regional semi-public savings banks ( cajas ) lent heavily to real estate companies that at the end of the bubble went bankrupt; the cajas found themselves left with

4655-453: The banks to violate International Accounting Standards Board standards. The banks in Spain were able to hide losses and earnings volatility, mislead regulators, analysts, and investors, and thereby finance the Spanish real estate bubble. The results of the crisis were devastating for Spain, including a strong economic downturn, a severe increase in unemployment, and bankruptcies of major companies. Even though some fundamental problems in

4750-514: The brink of full employment , Spain suffered a severe setback in October 2008, when it saw its unemployment rate surging to 1996 levels. Between October 2007 and October 2008, Spain had its unemployment rate climb 36%, exceeding by far the unemployment surge of past economic crises like 1993. In particular, in October 2008, Spain suffered its worst unemployment rise ever recorded and, the country has suffered Europe's biggest unemployment crisis during

4845-698: The categories were general, including Best Album, Best Song and Best Music Video. There was also a space for Latin American acts with the Best Latin Artist award. There also exited a gender distinction for the Best Spanish Artist award. Nevertheless, in its second edition, the categories were expanded up to twenty categories, making a difference between music genres and having a "Best Album", "Best Artist" and "Best New Artist" category for each genre, eliminating all general categories except for

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4940-458: The collateral and properties of those companies, namely overpriced real state and residential-zoned land now rendered worthless, rendering the cajas in essence bankrupt. In stark contrast to countries like Ireland, no nationalization took place. Instead the problem was rolled over with the extension of the remaining real estate companies debts, while the central government bailed once and again banks and cajas alike. For more than three years, there

5035-480: The complex dynamics that contribute to economic downturns and can formulate effective strategies for mitigating their impact (Anderson, 2019; Patel, 2017). Economist Richard C. Koo wrote that under ideal conditions, a country's economy should have the household sector as net savers and the corporate sector as net borrowers, with the government budget nearly balanced and net exports near zero. A severe (GDP down by 10%) or prolonged (three or four years) recession

5130-557: The country's conservative banking rules and practices. Banks are required to have high capital provisions and demand various proofs and securities from intending borrowers. Nevertheless, this practice was greatly relaxed during the housing bubble, a trend to which the regulator ( Banco de España ) turned a blind eye. Spain's unusual accounting standards, intended to smooth earnings over the business cycle, have misled regulators and analysts by hiding losses and earnings volatility. The accounting technique of "dynamic provisioning", which violated

5225-534: The country's ratings in the future, the decision to not downgrade will encourage the buying of Spain's bonds. On 9 June 2012 the Eurogroup held an emergency meeting to discuss how to inject capital into Spanish banks. The IMF estimated the capital needs of the Spanish banks to be about 40 billion euros. The Eurogroup announced intentions to provide up to 100 billion euro to the Fund for Orderly Bank Restructuring to

5320-487: The country, announced the creation of a new award ceremony. The choice of the new name is given by the origin of the music, since Odeon was the name that the Greeks gave to the temple in which musical shows were performed. And because Odeon was also the name of the mythical record company that released the first double-sided slate records. In this new version of the awards, the winners are chosen in addition to their successes on

5415-469: The crisis period with a relatively modest public debt of 36.2% of GDP. This was largely due to ballooning tax revenue from the housing bubble, which helped accommodate a decade of increased government spending without debt accumulation. In response to the crisis, Spain initiated an austerity program consisting primarily of tax increases. Prime Minister Mariano Rajoy announced on 11 July 2012 €65 billion of austerity, including cuts in wages and benefits and

5510-410: The current storm. Once again, Minsky understood this dynamic. He spoke of the paradox of deleveraging, in which precautions that may be smart for individuals and firms—and indeed essential to return the economy to a normal state—nevertheless magnify the distress of the economy as a whole." There are many reasons why recessions happen. One overall reason can be lack of demand due to sharp developments in

5605-510: The decline in property values experienced during the subprime mortgage crisis. Further, reduced consumption due to higher household leverage can account for a significant decline in employment levels. Policies that help reduce mortgage debt or household leverage could therefore have stimulative effects (Smith & Johnson, 2012). A liquidity trap is a Keynesian theory that a situation can develop in which interest rates reach near zero ( zero interest-rate policy ) yet do not effectively stimulate

5700-486: The economy reaches a peak of activity and ends when the economy reaches its through." The NBER is considered the official arbiter of recession start and end dates for the United States. The Bureau of Economic Analysis , an independent federal agency that provides official macroeconomic and industry statistics, says "the often-cited identification of a recession with two consecutive quarters of negative GDP growth

5795-442: The economy. Economist Robert J. Shiller wrote that the term "refers also to the sense of trust we have in each other, our sense of fairness in economic dealings, and our sense of the extent of corruption and bad faith. When animal spirits are on ebb, consumers do not want to spend and businesses do not want to make capital expenditures or hire people." Behavioral economics has also explained many psychological biases that may trigger

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5890-475: The economy. In theory, near-zero interest rates should encourage firms and consumers to borrow and spend. However, if too many individuals or corporations focus on saving or paying down debt rather than spending, lower interest rates have less effect on investment and consumption behavior; increasing the money supply is like " pushing on a string ". Economist Paul Krugman described the U.S. 2009 recession and Japan's lost decade as liquidity traps. One remedy to

5985-407: The eurozone average. In 2012, unions organized a general strike to protest proposals to weaken union power, enable cuts in wages, and lower firing costs. By the end of 2012, Spain's unit labor costs improved. It narrowed the gap with Germany by 5.5% and 4.6% with respect to France. Spain's policy of internal devaluation cut public sector salaries by 5% with an additional 7.1% cut consisting of

6080-558: The following are considered possible predictors: Manufacturing: Industrial Production: Chemical Activity: Transportation: Corporate Profits: Employment: Personal Income: Household Savings and Consumer Debt: Retail Sales, Consumer Confidence and Consumer Expenditures: Housing and non-residential construction: Credit Markets: Business Expectations: Margin of stock market traders: Asset Prices: Gross Domestic Product: Unorthodox Recession Indicators: Overview of recession indicators: Sahm Recession Indicator signals

6175-449: The following categories: Economic factors: Financial factors: External shocks Summary: Why recessions happen is a complex phenomena often resulting from a interplay of various factors. While these factors can individually contribute to a recession, the cumulative impact of several occurring simultaneously can significantly amplify the negative effect on the economy. Recessions are very challenging to predict. While some variables like

6270-419: The following year. Restrictions on the credit line exempting funds from covering "legacy assets" suggests limits to the planned banking bailouts. In May 2012, Spanish banks lent €1.66 trillion to the private sector and took in €896 billion. Historically it would borrow the difference from foreign banks (i.e., interbank lending ) but reduced access led to a greater reliance on ECB loans. Spanish banks borrowed

6365-546: The future are dwindling as Spain's unemployment rate is almost as high as it was for the United States during the Great Depression . People are beginning to fear the transformation of this generation into one referred to as a " Lost Generation " that is constantly looking for work and whose futures are closed off from "good careers". The stress of unemployment has also affected personal relationships, with many young adults separating from their partners. Youth unemployment

6460-472: The highest unemployment rate in the European Union proved to be harder than expected. The bailout for Spain was estimated to be insufficient to restore the economy. With a serious level of debt in the country, substantial cuts would have to be put in place to restore the economy. Many youths are trying to find jobs abroad, creating a problem for the future domestic economy and job market. Rajoy proposed

6555-565: The lack of its own resources, Spain has to import all of its fossil fuels , which in a scenario of record prices added much pressure to the inflation rate. Thus, in June 2008 the inflation rate reached a 13-year high of 5.00%. Then, with the dramatic decrease of oil prices that happened in the second half of 2008 plus the confirmed burst of the property bubble, concerns quickly shifted to the risk of deflation instead, as Spain registered in January 2009 its lowest inflation rate in 40 years which

6650-611: The largest growth in tourism since 2011 and 2012. Its geographic advantages, the Arab Spring , and other non-economic factors are contributing to its resurgence as a tourist destination. While Spain's economy itself is not doing well, purchasing power parity is generally rising again. Furthermore, violent unrest in North Africa and the Middle East is redirecting tourists towards stable countries like Spain. Spain entered

6745-647: The last ceremony of the Premios a la Música was held in Madrid. Its cancelation was motived the same as its counterpart's. In December 2019, taking advantage of the bright future of the Spanish music industry due to the adaptation of streaming services, a rise in urban music and a new tidal wave of artists and musicians, the Spanish Intellectual Rights Management Association (AGEDI) formed by the main record companies in

6840-645: The list, along with the votes of the public. The different awards are divided into two parts, the Odeón Awards and the Premios Objetivo, the first are chosen from a cross between the public's votes on the web and the criteria of the organizing committee, the targets are chosen by each listening, each viewing, and each album purchased until the day of the gala. Due to its short run, the Premios Odeón are still stabilizing its categories. In 2020,

6935-402: The livelihood of Spanish citizens. As the average wage decreases, the buying power of money decreases as well. The frustration of this decreases in buying power has manifested in several, very large, worker demonstrations. The Spanish banking system had been credited as one of the most solid and best equipped among all Western economies to cope with the worldwide liquidity crisis , thanks to

7030-582: The long run, raising the prospect of a second aid program for Madrid following the 100 billion euro lifeline it obtained for its banks in June. Spain expected the European Commission to approve the restructuring plans of the banks needing aid on 15 November 2012 and then to authorize the disbursal of the first credit line of up to 100 billion euros within three weeks after that. A larger economy than other countries that have received bailout packages, Spain had considerable bargaining power regarding

7125-466: The market during the early 2000s. Barclays , Deutsche Bank , and ING have large Spanish units. On 9 June 2012 Eurozone finance ministers agreed that Spanish banks would be provided with up to €100 billion of rescue loans. This money was to be distributed via the Fund for Orderly Bank Restructuring , and the exact amount to be loaned would be determined after audits of the banks. EC President Jose Manuel Barroso and vice-president Olli Rehn welcomed

7220-412: The move, praising the combination of a "thorough restructuring of the banking sector", structural reforms, and fiscal consolidation; U.S. Treasury Secretary Timothy Geithner also welcomed the move. Bank stress tests would enable the Spanish government to make a formal request for the €100 billion credit line. Further analysis and tests would be undertaken prior to restructuring and recapitalization over

7315-500: The national GDP contracted for the first time in 15 years, and, in February 2009, Spain (and other European economies) officially entered recession . The economy contracted 3.7% in 2009 and again in 2010 by 0.1%. It grew by 0.7% in 2011. By the 1st quarter of 2012, Spain was officially in recession once again. The Spanish government forecast a 1.7% drop for 2012. The provision of up to €100 billion of rescue loans from eurozone funds

7410-454: The number of arrivals. Spain is now a net emigrant country. There are now indications that established immigrants have begun to leave, although many that have are still retaining a household in Spain due to the poor conditions that exist in their country of origin. As the financial crisis was getting started in Spain, it was already underway in the United States and other western countries. The decrease in disposable income of consumers led to

7505-407: The number of new properties built was 528,754. In a country with 16.5 million families, there were 22–24 million houses and 3–4 million empty houses. From all the houses built over the 2001–2007 period, "no less than 28%" were vacant as of late 2008. House ownership in Spain is above 80%. The desire to own one's own home was encouraged by governments in the 60s and 70s, and has thus become part of

7600-448: The outlook remaining negative. Standard and Poor's has downgraded Spain on 14 October 2011 and Fitch Ratings cut it to the same level on 7 October 2011. On 14 June 2012, Moody's downgraded Spain to Baa3, just one notch above "junk". Standard and Poor's downgraded Spain to BBB− (one notch above junk) on 11 October 2012. DBRS downgraded Spain to single-A, which remains higher than the major credit rating agencies . This rating allows

7695-507: The possibility of a recession: Except for the above, there are no known completely reliable predictors. Analysis by Prakash Loungani of the International Monetary Fund found that only two of the sixty recessions around the world during the 1990s had been predicted by a consensus of economists one year earlier, while there were zero consensus predictions one year earlier for the 49 recessions during 2009. However,

7790-419: The prices of the inputs used in producing goods and services. Another main reason can be problems e.g. in financial markets. Because recessions have many likely explanations, it is demanding to predict them. Some variables might at first glance be the causes of recessions, but they could also be the results of a recession, which means they are endogenous to recessions. One can summarize the causes of recessions in

7885-484: The private sector savings curve is elastic even during a balance sheet recession (responsive to changes in real interest rates), disagreeing with Koo's view that it is inelastic (non-responsive to changes in real interest rates). A July 2012 survey of balance sheet recession research reported that consumer demand and employment are affected by household leverage levels. Both durable and non-durable goods consumption declined as households moved from low to high leverage with

7980-611: The standards set by the International Accounting Standards Board, obscured capital cushions until they were depleted, allowing the appearance of health as problems mounted. It was later revealed that nearly all the Spanish representatives in Congress had large investments in the housing sector, some owning up to twenty houses. Over time, more and more news has emerged about the informal alliance between Spanish central and regional governments and

8075-556: The sum of liabilities plus equity. If asset prices fall below the value of the debt incurred to purchase them, then the equity must be negative, meaning the consumer or corporation is insolvent. Economist Paul Krugman wrote in 2014 that "the best working hypothesis seems to be that the financial crisis was only one manifestation of a broader problem of excessive debt—that it was a so-called "balance sheet recession". In Krugman's view, such crises require debt reduction strategies combined with higher government spending to offset declines from

8170-451: The terms of a bailout. Due to reforms already instituted by Spain's conservative government, less stringent austerity requirements were included than for earlier bailout packages for Ireland, Portugal, and Greece. As the EU's fifth-largest economy, Spain remained a large concern. In 2011 the conservative Mariano Rajoy took over the government, pushing out José Luis Rodríguez Zapatero and his left-wing government. Trying to get Spain out of

8265-544: The underground economy, which is estimated to be as large as 20% of the economy during the boom years. Unemployment for those under 25 was reported to be up to 50%. Spain's current generation is considered the most educated that the country has ever had, yet it faces the greatest rate of unemployment in Europe. Roughly 68% of young people are willing to leave the country to search for a job, and those with college degrees are willing to settle for working at so-called minijobs for

8360-421: The world's GDP were caught in a liquidity trap. Behavior that may be optimal for an individual (e.g., saving more during adverse economic conditions) can be detrimental if too many individuals pursue the same behavior, as ultimately, one person's consumption is another person's income. Too many consumers attempting to save (or pay down debt) simultaneously is called the paradox of thrift and can cause or deepen

8455-489: Was U-shaped and its 8-out-of-9 quarters of contraction in 1997–1999 can be described as L-shaped. Korea , Hong Kong and South-east Asia experienced U-shaped recessions in 1997–1998, although Thailand 's eight consecutive quarters of decline should be termed L-shaped. Recessions have psychological and confidence aspects. For example, if companies expect economic activity to slow, they may reduce employment levels and save money rather than invest. Such expectations can create

8550-510: Was a steady process of bank concentration. Spain had the densest bank office net in Europe, which led many bank employees to be dismissed. By contrast, bank board members have mostly kept their roles, even those in merged entities. Golden parachutes have been prevalent: it has been speculated that this was because of the fear that laid-off senior members would talk about the sector's rampant malpractice. To this date, no bankers have been legally charged for having roles in this process. In May 2012

8645-437: Was agreed by eurozone finance ministers on 9 June 2012. As of October 2012, the so-called Troika ( European Commission , ECB and IMF ) was in negotiations with Spain to establish an economic recovery program required for providing additional financial loans from the European Stability Mechanism (ESM). In addition to applying for a €100 billion bank recapitalization package in June 2012, Spain negotiated financial support from

8740-551: Was downgraded to being a more informal ballot after further intervention by the Constitutional Court. The dispute remained unresolved as of March 2015. Recession Heterodox In economics , a recession is a business cycle contraction that occurs when there is a period of broad decline in economic activity. Recessions generally occur when there is a widespread drop in spending (an adverse demand shock ). This may be triggered by various events, such as

8835-438: Was ineffective because there was limited demand for funds while firms paid down their liabilities. In a balance sheet recession, GDP declines by the amount of debt repayment and un-borrowed individual savings, leaving government stimulus spending as the primary remedy. Krugman discussed the balance sheet recession concept in 2010, agreeing with Koo's situation assessment and view that sustained deficit spending when faced with

8930-402: Was the housing bubble and the accompanying unsustainably high GDP growth rate. The ballooning tax revenues from the booming property investment and construction sectors kept the Spanish government's revenue in surplus, despite strong increases in expenditure, until 2007. The Spanish government supported the critical development by relaxing supervision of the financial sector and thereby allowing

9025-456: Was then followed in March 2009 by a negative inflation rate for the first time ever since this statistic was recorded. As of October 2010, the Spanish economy continued to contract, resulting in decreasing GDP and increasing inflation. From 2011 to 2012 alone, prices rose 3.5% as compared to 2% in the United States. The rise in prices, combined with the recently implemented austerity measures and extremely high unemployment, are heavily impacting

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