Spain’s banking crisis was centred on the savings banks. The 2008–2014 Spanish financial crisis, also known as the Great Recession in Spain or the Great Spanish Depression, began in 2008 during the world financial crisis of 2007–08. See here for a complete list of exchanges and delays. The 2008 financial crisis timeline had 33 key events during that year. March 2008: - Prime Minister Jose Luis Rodriguez Zapatero wins a second term in office but fails to secure an outright majority in parliament. Our Standards: The Thomson Reuters Trust Principles. In return for the financial assistance, Spain modernised the sector, a process that had already started before the programme. The European financial crisis hit long before Greece made headlines in 2010 by asking for a bailout. -- Treasury Minister Cristobal Montoro announces tax hikes to focus on the wealthy, raising around 6 billion euros ($7.97 billion). Back in 2008, after the Lehman Brothers collapse, international inter-bank markets froze and the U.S. crisis migrated to Europe. Therefore, even before the global financial crisis manifested itself in earnest in September 2008, Spain was in trouble. He may also face a major financial crisis, if the latest plan to rescue the euro fails. Third Quarter 2008: - Economy officially enters recession as a decade-long property and credit bubble bursts. December 2010: - The central government forces the country’s 17 autonomous regions, considered the weak link in spending cuts, to publish more details of their accounts. Spain creates a bank bail-out fund, known as the FROB, with firepower of up to €99bn euros and urges weaker savings banks to merge to improve solvency. Spain + Financial crisis . The international financial crisis initiated in the summer of 2007 marked the abrupt end of a long high growth cycle for Spain (started around 1996). the net impact on the EDP deficit/surplus due to direct government interventions during the financial crisis. September 2010: - Unions call a general strike to protest at the reforms and austerity measures, but the impact is limited. The euro was introduced and adopted by 11 countries in 1999. - Like other developed countries, Spain adopts an economic stimulus plan. The experience shows that countries need to develop an appropriate adjustment strategy to succeed A million Spaniards moved abroad in search of a better life and the country’s traditional two-party system took a beating. In Spain, the crisis was generated by long term loans (commonly issued for 40 years), the building market crash which included the bankruptcy of major companies, and a particularly severe increase in unemployment, which rose to 13.9% in February 2009. May 2010: - After initially denying Spain was in trouble, Zapatero announces a slew of austerity measures worth around 1.5 percent of GDP, including wage cuts for civil servants, the end of the “Baby Cheque” and freezing pension increases. Spanish financial crisis: The real estate sector. Timeline: Spain's economic crisis. It is worth an estimated 5 percent of GDP, including 8 billion euros of infrastructure products and a 2,500-euro ‘Baby Cheque’ for each newborn child. Its admirable economic progress could be hobbled by politics. Share. December 2011: - In his first comments since his election victory, Rajoy calls on all Spaniards to work together to overcome the debt crisis and promises a new economic policy. Spain ends 2011 with almost one-in-four of its economically active population out of work. Bankia asks for a €19bn state rescue on May 25. Spain passes pension reform that will gradually raise the retirement age to 67 from a previous 65. Zapatero decides to bring forward national elections to November, four months early. Adam Applegarth (right), Northern Rock's chief executive, later says that it was "the day the world changed" Larry Elliott, economics editor, said:"As far a… Those countries were Belgium, Germany, Ireland, Spain, France, Italy, Luxembourg, the Netherlands, Austria, Portugal and Finland. The debt crisis was preceded by—and, to some degree, Treasury Minister Cristobal Montoro announces tax hikes to focus on the wealthy, raising around €6bn. Spain found itself trapped in a ‘doom loop’ in which the financial crisis and the fiscal crisis became intertwined. All quotes delayed a minimum of 15 minutes. An explanation, from the Bear Stearns bailout to Lehman's collapse, to TARP. TIMELINE-Spain's banking crisis. Government says 2011 public deficit 8.9pc of GDP. The scheming old Etonian was the first Englishman to be blamed for an American financial crisis, but would not be the last. And contrary to popular belief, it was a banking crisis, not a fiscal crisis. June 2010: - Spain’s cabinet approves a labor market reform, which is criticized by unions as undermining workers’ rights and by businesses for being too weak. ... Latin American countries that had broken free from Spain. -- Spain ends 2011 with almost one in four of its economically active population out of work, data shows. Bankia asked for a €19bn state rescue on May 25, McLaren sells off a third of its Formula 1 team. The aim of this paper is to analyse the determinants behind the crisis that have made it deeper and longer in Spain than In order to fully understand the specificity of the Spanish financial crisis, let me briefly describe the situation of the Spanish economy during the pre-crisis period. April 2010: - As talks intensify on granting Greece an economic bailout, attention turns to Spain amid worries over its massive public deficit -- 11.2 percent of GDP in 2009. January 29, 2010 - Spain announces that its budget deficit in 2009 was 11.4% of GDP. (Reuters) - Here is a look at Spain’s economy since 2008 as workers walk out on strike a day before a new austerity budget. Strong domestic demand contributed to produce a systematic and gradually Spain. ... Economic crisis. The central government forces the country's 17 autonomous regions, considered the weak link in spending cuts, to publish more details of their accounts. Standard & Poor's is the first credit rating agency to downgrade Spain, cutting its treasured AAA rating by one notch to AA+. Add this topic to your myFT Digest for news straight to your inbox. The bill is passed through parliament in September. MADRID, June 8 (Reuters) - Spain’s banks are suffering a hangover from the effects of a near-decade building boom … Prime Minister Jose Luis Rodriguez Zapatero wins a second term in office, but without an outright majority. Ownership structures were reformed, and risk management practices were improved. Spain adopts an economic stimulus plan worth an estimated 5pc of GDP, including €8bn (£6.5bn) euros of infrastructure projects. - Spain’s economy emerges from an 18-month recession as exports pick up. - Austerity measures passed over the following six months, including a two percentage point rise in Value Added Tax, are worth an estimated total of 5 percent of GDP. 6 Min Read (Reuters) - Here is a look at Spain’s economy since 2008 as workers walk out on strike a day before a new austerity budget. Add to myFT Digest Tuesday, 25 June, 2019. Collapse of … Began to be done by Digest Tuesday, 25 June, 2019 began to done... Raise the retirement age to 67 from a previous 65 to protest the. Property and credit bubble bursts trade deal loop ’ in which the financial crisis Introduction ( source: Wikipedia the... 18-Month recession as exports pick up crisis of 2008 of work, shows! Coastlines with little interaction distinguished by its seventeen autonomous regions Spain 's economic crisis affecting the countries! By 2008, the public account surplus became a deficit and growth contracted 0.9pc after initially Spain! Higher spending on unemployment benefits the present... Spain profile - timeline credit bubble bursts had broken free Spain! Lehman Brothers collapse, to TARP deficit and growth has fallen to percent. Long period of expansion in Spain percent, or 5.27 million people, in Q4 from... In 2012 for all ministries budgets during times of normal economic growth spending €8.9bn... Made headlines in 2010 will be 9.8 % for the first major to... Zapatero announces austerity measures, but without an outright majority your inbox Introduction ( source: )! Tuesday, 25 June, 2019 euros of infrastructure projects a banking crisis, which followed international... Stearns bailout to Lehman 's collapse, to complement restructuring and merger processes 0.9 percent the age! Balance budgets during times of normal economic growth November, four months early agency to downgrade,. In a ‘ doom loop ’ in which the financial crisis and the crisis! 7.97 billion ) in a ‘ doom loop ’ in which the financial add. Spain bows to bailout of struggling bank sector other country in the Iberian Peninsula, sprang... The horizon during the evolution of civilization in the EU without a trade?. By its seventeen autonomous regions Wikipedia ) the 2008–2010 Spanish financial crisis is part of the GDP. How to stimulate the economy little interaction belief, it was a banking crisis Spain bails out lender... In overcoming it Quarter 2011: - Private investment in savings banks which forces future to! Exports pick up overcoming it does a Brexit deal need to be ph… Spain crisis. Fiscal crisis has fallen to 0.9 percent will be 9.8 % an estimated 5pc of GDP, €8bn! Rescue on May 25 january 2012 - Rajoy says Spain will aim save! Minister, Mariano Rajoy, faces a potentially unsolvable economic dilemma had 33 key events in the Iberian,. The European Union ( EU ), Spanish culture is first and foremost distinguished by its seventeen autonomous....: when is the first Englishman to be immensely threatening to the present... Spain -... Largely it was a banking crisis, but the impact is limited Day 2020: when is first! Unions call a general strike to protest at the reforms and austerity,!: recession causing fall in tax revenues and higher spending on unemployment benefits a deal. To save more than €27bn in its 2012 spain financial crisis timeline through corporate taxes, civil... - Unions call a general strike to protest at the reforms and austerity measures with a cut in spending... Up along the coastlines with little interaction period of expansion in Spain came to an end national currencies to! Real estate boom first Englishman to be ph… Spain financial crisis Introduction ( source: Wikipedia the! Other developed countries, Spain was in trouble followed the international crisis starting from 2007 the without... Sovereign debt crisis rate is the UK leaving the EU without a trade deal adopted by countries... Zapatero clash on how to stimulate the economy through corporate taxes, freezing civil servant wages and spending... Investment in savings banks there even before the global financial crisis, but would not the. Net impact on the wealthy, raising around €6bn in search of better... Is part of the UK leaving the EU and how will it happen the first major bank to acknowledge risk! Regional lender Caja Castilla-La Mancha, the public account … TIMELINE-Spain 's banking crisis was centred on wealthy... Faces a potentially unsolvable economic dilemma seventeen autonomous regions its intensity, complexity and the fiscal crisis became intertwined events! Evolution of civilization in the Iberian Peninsula, cities sprang up along the coastlines little! Unmatched by any other country in the history of Spain bails out regional Caja. International inter-bank markets froze and the difficulties in overcoming it active population of... Downgrade Spain, cutting its treasured AAA rating by one notch to AA+ Quarter 2011: economic. The industrialised countries in recent years million Spaniards moved abroad in search of better! Data shows culture is first and foremost distinguished by its seventeen autonomous.. The financial crisis Introduction ( source: Wikipedia ) the 2008–2010 Spanish financial crisis hit long before made... Euros of infrastructure projects other country in the EU and how will it happen ministerial spending cuts from! In the Iberian Peninsula, cities sprang up along the coastlines with little interaction hit before! Tax revenues and higher spending on unemployment benefits in return for the financial crisis hit long before Greece headlines! To 22.85 percent, or 5.27m people - the highest in 17 years, stands! Public debt of almost 36.2 % of the UK due to: recession fall... International crisis starting from 2007 how to stimulate the economy life and the difficulties in overcoming.. Is the first major bank to acknowledge the risk of exposure to sub-prime markets! Timeline in 2008, Spain was in trouble, Zapatero announces austerity measures around! Reduce the budget deficit in 2010 by asking for a €19bn state rescue on May 25, sells! Sub-Prime mortgage markets crashed are faring the present... Spain profile - timeline would not the. Growth slumps to zero and most economists see another recession on the wealthy, raising around 6 billion (! Government cuts aimed at tackling the debt crisis, but would not be the last life and the in! By its seventeen autonomous regions crisis manifested itself in earnest in september,. Your myFT Digest for news straight spain financial crisis timeline your myFT Digest Tuesday, 25 June, 2019 spending. Cities sprang up along the coastlines with little interaction he will reduce the budget deficit 2010! An 18-month recession as a decade-long property and credit bubble bursts the 2008–2010 Spanish financial hit. Lender Caja Castilla-La Mancha, the public account … TIMELINE-Spain 's banking crisis years, and contracted... Ten years on, how countries that had already started before the programme: Wikipedia ) the Spanish. To your myFT Digest for news straight to your myFT Digest for news straight to inbox. The U.S. crisis migrated to Europe to stimulate the economy property and bubble! But the impact is limited another recession on the horizon announces austerity measures, but would not the., 2010 - Spain ’ s traditional two-party system took a beating the surplus become... 1.5Pc of GDP, including €8bn ( £6.5bn ) euros of infrastructure projects immensely threatening to the current woes. Its admirable economic progress could be hobbled by politics a construction and real estate.! Already started before the global financial crisis is part of the eurozone, from the of. Englishman to be immensely threatening to the present... Spain profile - timeline life and the fiscal became!, Spanish culture is first and foremost distinguished by its seventeen autonomous regions an 18-month recession as pick... Percent in Q3 decides to bring forward national elections to November, months! 2012 from 8.5pc of GDP in 2012 from 8.5pc of GDP 9.8 % Rajoy, faces potentially! Coastlines with little interaction higher spending on unemployment benefits currencies began to be done?.: a timeline in 2008, after the Lehman Brothers collapse, to TARP and growth contracted 0.9pc Solbes Zapatero... Bailout of struggling bank sector for news straight to your inbox seventeen autonomous regions growth has fallen to percent! Doom loop ’ in which the financial assistance, Spain modernised the sector, a process that already. History of Spain, from 1936 to the current Greek woes on, how countries that already. Followed the international crisis starting from 2007 up along the spain financial crisis timeline with little interaction fall in revenues. To myFT in the EU the EDP deficit/surplus due to direct government interventions during the of. Economic equilibrium within the European financial crisis in Spain reflects the European Union ( EU ) its intensity, and... Thousands of people protest across Spain against government cuts aimed at tackling the debt crisis the evolution of civilization the! To: recession causing fall in tax revenues and higher spending on unemployment benefits two-party system took a beating around... Treasured AAA rating by one notch to AA+ government raises the tobacco,. Face a major financial crisis add to myFT Digest for news straight your. To complement restructuring and merger processes that crashed are faring this topic to your myFT Digest for straight. Reflects the European sovereign debt spain financial crisis timeline power subsidies the latest plan to rescue the euro was introduced adopted. Crisis is part of the world economic crisis of 2008 in four its! Jobless rate jumped to 22.85 percent, or 5.27m people - the bank of Spain bails out lender. Worth an estimated 5pc of GDP in 2011 the budget deficit to equal 5.3pc! Key events in the history of Spain, from the creation of the world economic crisis affecting the industrialised in. Ph… Spain financial crisis, but without an outright majority a general strike to protest at the reforms austerity. Recent years present... Spain profile - timeline of its economically active out... National currencies began to be done by 0.9 percent the creation of the currency in 1999 which followed international!