Property boom and bust
What was Spain's unemployment rate in May of 2009?
Spain
The adoption of the Euro saw a marked reduction in interest rates to historic lows. The growth in the Spanish property market, which had begun in 1997, accelerated and within a few years had developed into a property bubble, financed largely by the cajas (regional savings banks under the oversight of the regional governments) and fed by the historically low interest rates and a massive growth of immigration. The Spanish economy was credited for having avoided the virtual zero growth rate of some of its largest partners in the EU. The country's economy created more than half of all the new jobs in the European Union over the five years ending 2005. The bubble imploded in 2008, causing the collapse of Spain's large property related and construction sectors, causing mass layoffs, and a collapsing domestic demand for goods and services. By the end of May 2009, unemployment reached 18.7% (37% for youths). At first, Spain's banks and financial services avoided the early crisis of their counterparts in the US and UK. This was particularly the case with Spain's international banks, Banco Santander and BBVA, that had diversified, international portfolios and had actively limited their exposure to housing mortgage risk. Banco Santander was able to profit from the global financial crisis by taking over distressed British banking firms. However, as the recession deepened and property prices slid, the growing bad debts of the smaller regional savings banks, the cajas, forced the intervention of Spain's central bank and government through a stabilisation and consolidation program, taking over or consolidating regional cajas and finally receiving a bank bailout from the European Central Bank in 2012.