The situation of Spanish companies within the crisis
15/01/2014 | Tania Cotarelo Herrán (Alumna UC)
The crisis began in 2008 and it continues to be present today. This essay will talk about how the crisis has affected Spanish companies, as many of them have been forced to close their doors since they do not have sufficient capital to face to their debts, which mean, that thousands of people are in lines.
It is necessary to mention that the origin of this crisis, within the context of a world economic and financial crisis, was strongly influenced by the strong adjustment of the construction industry after the burst. Also, it is necessary to mention that due to the absence of proper energy resources, Spain traditionally has imported all its oil while the energy crisis of the year 2000 produced a strong inflationary tendency. Finally, and not less important, the Spanish banking system was considered at first as one of the most solid in the world but after many diverse studies, it was proved that was not completely true. The real estate bubble, according to the Bank of Spain, was supported on margin. Nowadays, they speak about chilling numbers, when the employment statistics for the full 20th century are heard, when supposedly one has evolved so much in a few aspects but it seems that not so much in others. This situation has been provoked for thousands of families. You can listen to their stories every day on the news, appreciate their situation walking around on the street or see many cases of people in the lines of the social dining rooms, asking for “scraps». This situation is very sad.
The companies have seen their debt level increased, and if there is more and more deficit in the companies, and the government is not capable of helping to these companies, how do they claim that they go forward without the sufficient resources to do so?
It is also clear that there are companies that order to their workers to take their unemployment. This benefits them since they receive subsidies of the state. But they are not conscious that if the workers are spending their days of unemployment, when it comes the times for the company to close its doors, that is to say, to stop its productive activity: on what are these workers going to live? It is clear that the group most harmed by all this is us, the ordinary citizens, since the high level positions, both on management levels and political levels , usually take care of each other and, as one usually says, “they wash their hands “with the rest of us.
According to studies, of the world report of financial stability, the debt ratio of the Spanish companies is 5.5:1, normally a number superior to 3 raises the voices of alarm about the solvency of the companies. There is a debt overhang, up to the point where it is impossible or very difficult to pay back.
To sum up, such a big debt is almost impossible to pay and this makes the banks unwilling to loan money. The banks are not also in situation to loan money because the financial market is completely fragmented, while the entities of the countries that grow do not give to those who are in crisis. Also, the crisis of the foreign debt it is still being felt and this make that the costs of financing companies in Spain increase.
It is common to find that the small enterprises think that a crisis only happens to the big companies, but the truth is that a crisis can attack any organization in any moment.
I have read in diverse articles written by businessmen close to politicians and many coincide in that the companies and, obviously, businessmen are those who are going to fix the current situation of crisis. They need or we will need in the future (I hope not very far off), for those who make the political decisions to facilitate real employment possibilities.
But it is clear and under my point of view, that with politicians and many others, the only thing that they look for is their own benefit, something that should not be like that. The only thing that they provide us with “the people” is a chance for us to vote while they promise many things that at the moment of truth never end up happening. I have always thought that due to this economic crisis we already been confronting during the last several years and which is taking so long to get this matter addressed, “The poor are becoming poorer and the rich are becoming richer”.
Nota: Este artículo ha sido elaborado por Tania Cotarelo Herrán, alumna de la Universidad de Cantabria, como una de las actividades enmarcadas dentro del programa de capacitación lingüística, dando su permiso para la publicación del mismo en FxM.