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The Spanish Crisis: Background and Policy Challenges

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  • Javier Suarez

    () (CEMFI, Centro de Estudios Monetarios y Financieros)

Abstract

This paper reviews the background and key policy challenges of the current situation of the Spanish economy. It describes the strengths and weaknesses of Spain’s recent long growth cycle, the real and financial imbalances accumulated towards its end, and the troubles faced at the current stage. Particular attention is paid to the developments in private and public sector finances and, specifically, to their implications for the banking sector. Attention is also paid to the political-economy background, especially in regards to the undertaking of structural reforms. It is argued that recent external pressure, partly initiated by unjustified catastrophic expectations about Spain, provides an opportunity for accelerating the reforms needed to resume strong growth.

Suggested Citation

  • Javier Suarez, 2010. "The Spanish Crisis: Background and Policy Challenges," Working Papers wp2010_1005, CEMFI.
  • Handle: RePEc:cmf:wpaper:wp2010_1005
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    References listed on IDEAS

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    1. Angel de la Fuente, 2010. "El nuevo sistema de financiación regional: Un análisis crítico y proyecciones para 2009," Hacienda Pública Española, IEF, vol. 195(4), pages 91-138, december.
    2. Sara Rica & Amaia Iza, 2005. "Career Planning in Spain: Do Fixed-term Contracts Delay Marriage and Parenthood?," Review of Economics of the Household, Springer, vol. 3(1), pages 49-73, November.
    3. Andrés Fuentes, 2009. "Raising Education Outcomes in Spain," OECD Economics Department Working Papers 666, OECD Publishing.
    4. Clara Isabel González & J. Ignacio Conde-Ruiz & Michele Boldrin, 2008. "Immigration and Social Security in Spain," Working Papers 2008-36, FEDEA.
    5. Juan José Dolado & Florentino Felgueroso & Marcel Jansen, 2010. "El conflicto entre la demanda de flexibilidad laboral y la resistencia a la reforma del mercado de trabajo en España," Economic Reports 06-2010, FEDEA.
    6. Samuel Bentolila & Juan Jose Dolado & Juan F. Jimeno, 2008. "Two-tier Employment Protection Reforms: The Spanish Experience," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 6(4), pages 49-56, December.
    7. Clara I. Gonzalez & José Ignacio Conde Ruiz & Michele Boldrin, 2009. "Immigration and Social Security in Spain," Working Papers 2009-26, FEDEA.
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    Cited by:

    1. Bleich, Dirk & Fendel, Ralf, 2012. "Monetary Policy Conditions in Spain Before and After the Changeover to the Euro: A Taylor Rule Based Assessment," Review of Applied Economics, Review of Applied Economics, vol. 8(1).
    2. Gehringer, Agnieszka, 2012. "Another look at the determinants of current account imbalances in the European Union: An empirical assessment," Center for European, Governance and Economic Development Research Discussion Papers 142, University of Goettingen, Department of Economics.
    3. Ulrich Volz, 2013. "Lessons of the European crisis for regional monetary and financial integration in East Asia," Asia Europe Journal, Springer, vol. 11(4), pages 355-376, December.
    4. Beniamino Moro, 2013. "The Run On Repo and the Liquidity Shortage Problems of the Current Global Financial Crisis: Europe vs. The US," Ekonomi-tek - International Economics Journal, Turkish Economic Association, pages 41-77.
    5. Giavazzi, Francesco & Spaventa, Luigi, 2010. "Why the current account may matter in a monetary union: Lessons from the financial crisis in the Euro area," CEPR Discussion Papers 8008, C.E.P.R. Discussion Papers.
    6. Costain, James & de Blas, Beatriz, 2012. "The role of fiscal delegation in a monetary union: a survey of the political economy issues," Working Papers in Economic Theory 2012/11, Universidad Autónoma de Madrid (Spain), Department of Economic Analysis (Economic Theory and Economic History).

    More about this item

    JEL classification:

    • E66 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General Outlook and Conditions
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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