During the early 1990s, Spain was in prime time for its rapid economic growth. Whereupon it became the fifth largest economy in the European Union. Spain's economic growth has encouraged a real estate marketing boom. Thus, in 2006, Spain began building 800,000 new homes. It is important to note that this was more houses built than Germany, France and the UK combined (known as the core member states of the Eurozone) – but I will explain this in more detail later! Say no to plagiarism. Get a tailor-made essay on "Why violent video games should not be banned"? Download an original essay Unfortunately for Spain, this economic growth petered out and in 2008 Spain was severely affected by the global credit crisis believed to be the worst financial crisis starting with the Great Depression of the 1930s. Therefore, the Spanish real estate market collapsed leading to a deep recession that lasted several years. As you can see in the image below, the recession has had a negative impact on real estate investments in the Spanish real estate market. Yet with all those new homes built for citizens, the recession was so painful that almost all interest in the housing market disappeared. One wonders: where did it all go wrong for Spain? A time when they were once the country with the largest economy in the Eurozone to date… unable to escape recession with the highest unemployment rates in the industrialized world to date. According to many data, 2008 marks the beginning of the recession for Spain, when GDP contracted in the third quarter. Despite this, the Spanish economy still managed to grow by 0.9% and the Spanish banking system was considered solid (OECD). What was not expected was a 3.8% budget deficit in 2008 due to falling tax revenues as queues grew longer with workers unable to find work outside of services. This is where Spain entered a full-blown recession in 2009, causing the budget deficit to collapse to 11.1%. As a result, this excessive recession caused an outcry when then socialist prime minister José Luis Rodríguez Zapatero had to go against his campaign promises in 2010 and cut spending by 15 billion euros to try to balance financing costs. In 2010, the rate of decline of the Spanish economy was reduced by the government to 0.1%, thus reducing the deficit to 9.3%. However, Spain was still the country with the highest unemployment rate in Europe and was predicted to be a country with a continuing spiral of declining revenues and a struggling economy. In 2012, unemployment reached a new high of 24.3% and this figure is only expected to rise if Spain fails to overcome this recession. Furthermore, youth unemployment was also worsening, as currently in Spain more than 50% of young people aged between 18 and 24 are unemployed. This is a vicious cycle for Spain as if young people cannot find a job, they are unable to earn a salary and therefore help out by supporting the economy and the country. Not only this, but it also means that young people do not have the means to move out and be financially independent from their parents. With the loss of jobs, all these empty houses in Spain will remain that way because no one can afford to live in them. It is already not unusual to go to Spain and see an adult man or woman still living with their parents due to their declining economy. During this recession, Spain was predicted to be the only Eurozone country still in recession in 2013, despite being the country with the fourth largest economy.