Mnementh said:
I think the welfare is better in germany than in Spain, so possibly more debt on this side. Also the GDR was accumulated by destroying all industry existing in there (simply by assigning the rules of west germany with no buffer for the eastern companies to adapt to the new rules). That makes the east very dependable on governmental money for developing infastructure. Probably there are far more reasons, why germany has a higher relative debt. Second: the 8% unemployment is nearly a lie. Someone is no longer unemployed if he is joining some training. The Arbeitsagentur (the instance that manages the unemployed) pays for such trainings. There has developed a whole industry that makes trainings the Arbeitsagentur pays for. Also not counting as unemployed are people that work - but only for an income, that isn't enough to live. The Arbeitsagentur pays part of the unemployment welfare to make the income bearable. The company would never employ these people for normal income. That makes a lot of people, that are not counted as unemployed but actually have not a 'sozialversicherungspflichtiger Job' , that's a job that brings enough income, that you can pay for pension and health insurance (in the other cases the government pays this). |
Actually it was mostly due to Spain's economy getting a HUGE tax boost from the construction boom. The explosion was so big they ended up creating something like... half the jobs in all of Europe in the early 00's.
The Caja's were heavily invested in the bubble. Caja's if I forgot to previously mention are actually Non-profit banks meant to help locals and reinvest in the community.
Explosion of the housing bubble suddenly caused it's rate to EXPLODE with little or not help to pay it off, and many banks who were in trouble... who coincidentally ended up doing most of their buisness in housing... and buying Spanish Bonds.
This created a feedback look, and Spain tried to fix it by the above mentioned Caja merging... which ended up bringing the whole system down.
