Euro Currency Effects and Spain’s Unemployment Challenge
The Euro Currency Introduction
In 2000, most European countries, except for the United Kingdom, Switzerland, and Sweden, started using a common currency called the Euro.
Initial Economic Disparities
At that time, the economic situations of the nations within the Union’s boundaries became quite distinct. The map of Europe, much like centuries before, highlighted the differences between some Southern European states and others ranging roughly from Germany to the Nordic countries.
North-South Divide and Stabilization Efforts
- Salaries and living standards in the northern nations were, and still are, higher than in the rest of Europe.
- Furthermore, the power and value of their former currencies were much more significant than those of the southern countries.
- This situation required concessions from both sides; they adjusted the value of their old currencies to find an equilibrium and stabilize the Euro.
- During this process, states like Spain, Portugal, and Greece had to make significant efforts to manage the transition.
Impact on Prices and Commerce
- A negative consequence was that many companies, including large industries and Small and Medium Enterprises (SMEs), raised the prices of numerous products considerably.
- Citizens in the poorer European nations did not see wage increases but faced higher costs for necessary goods.
- Conversely, having a common currency has helped many companies operate across all European Union countries with consistent pricing, opening new opportunities for commerce within the continent.
Global Competitiveness and Currency Value
- One of the main purposes behind creating the Euro was to establish a stronger currency and economy to compete globally.
- Currently, the Euro’s value is higher than the Dollar’s, a trend observed for several years (approximately 1 Euro equals 1.20 Dollars).
- However, one Pound Sterling can be exchanged for more than 1.25 Euros.
- Therefore, the Euro occupies a middle ground in terms of value, but predicting its future is difficult.
Unemployment Crisis in Spain
Since the onset of the global crisis, many countries worldwide have faced numerous problems, such as: a weakened economy, an increase in cutbacks, and salary reductions. However, one of the most significant difficulties in Spain has been the sharp rise in unemployment, affecting over 4 million people in the active population.
Impact of the Building Sector Collapse
- For over a decade, Spanish society relied on an economic system heavily tied to the Building Sector.
- The global crisis caused many companies associated with this sector to close, leading to substantial job losses.
- Many affected workers were over 40 and faced significant challenges finding new employment.
- They often spent long periods searching, hampered by market saturation in their fields and, occasionally, insufficient qualifications, making re-employment very difficult.
Challenges for Young People
- Young people, whether they have formal education or not, also face difficulties.
- Lacking years of experience and facing limited job opportunities in Spain, the youth struggle to find their place in the workforce.
- Furthermore, many students and graduates (with Diplomas or Degrees) have left Spain in recent years seeking employment opportunities unavailable in their home country, where the youth unemployment rate exceeds 50%.
Current Situation and Migration Factors
- Although the unemployment rate has been slowly decreasing in recent months, it’s crucial to consider the number of people who emigrated during the crisis years.
- Additionally, many foreign workers who were employed in Spain have returned to their home countries.
- This economic and social crisis persists in Spanish society, and its most significant consequence, unemployment, remains a critical issue for its citizens, with over 20% of the active population jobless.