Which of these two countries has the worses economy Greece or Spain?
and despite how bad the economy is in both of these countries, do people from other countries still move to Greece or Spain as far as to live?
Do these two countries still get tourism?
And when do you think the economy will pick itself up in these countries?
- CMVLv 66 years agoFavorite Answer
Difficult question requiring a longer analysis that a short-answer format thing like Yahoo answers .
you really have to understand about the history of the E U .
France and Germany signed a Coal and Steel pact back in the 1950s with the aim of ceasing to compete , and starting to co-operate .
Adding Belgium , Luxembourg , Holland and Denmark made sense , and so the Common Market came about . Austria joined too , and with reservations , Italy was added .
The Common Market then became not simply a customs union for the free passage of imports and exports , but evolved into an engine for economic Growth .
Poorer economies like Italy would be kick started by providing massive grants for infrastructure projects . Modern Railways ,Road networks , Airports , Harbours , national Electrical Grids , fresh water reserviors , hydro-electric power . . . . . . . All the goodies .
These grants were typically for 70% , 75% , even 80% of the project cost , with the nation where the work was being done finding the rest AND the ongoing running costs .
Very Sweet Deal , hey ?
Better than that , those countries doing the money giving woulld also get money back because THEIR firms of engineers and tech specialists would deliver the projects ; - and the nation where the work was being done would benefit because a lot of local firms would be project sub-contractors , and a lot of local people would be operating big yellow machines in giant holes in the ground and slobbering concrete about .
And THEIR PAY would get pumped straight back into the local economy , to buy more stuff , and some of the luxury stuff would be produced elsewhere in the E U .
So that is a Win-Win-Win-Win economic boost across the whole E U .
The problem that both Spain and Greece had was that they were weak economies and over-borrowed to fund their share of these projects . And because the E U had enlarged a lot , so had it's programmes and the grants were now available to quite small local projects too , and the temptation was obviously there to borrow again to fund your little local sport park or fishing boat harbour or health centre or historic building conservation .
Came the slump , and Spain and Greece both started borrowing MORE money , merely to pay the INTEREST due on what had been borrowed before .
And eventually the whole thing collapsed .
Previously , both Spain and Greece would let their currencies devalue , so as to reduce the debts BUT both had joined the eurozone and that tactic was no longer open to them .
So now both countries have been forced into deep austerity measures to try to ameliorate an impossible financial situation , in which the cure ( savagely reducing public spending ) DEFLATES the economy , causing a deep economic DEPRESSION and diminishing government tax income , slowing down any cure .
That is a very brief account in which many factors are left unstated , but it is the best short explanation I can give you as to what the hell went wrong .
YES people from other countries still move there to live , typically retirees with secured incomes who like the places and the people and want to get a bit of sun on their ageing bones .
Like I hope to do .
YES they still get tourism , both are still very attractive places to holiday , and as a tourist you wouldn't notice much wrong there .
As for when it will all come right , Spain I cant tell you , but in Greece , unless a miracle happens , like finding easily expoitable massive oil and gas fields offshore , or a diamond mine , it will take a decade or more to recover .