Country Analysis

COUNTRY

ANALYSIS PROJECT:

SPAIN

International Financial Management Spring 2014

Table of Contents

Executive Summary……………………………………………………..

………………………………………………………… 2

Background

Information……………………………………………………………………………………

…………………… 3

Political Structure and Stability……………………..……………………….

…………………………………………….... 5

Economy………………………………………………………………………………………

…………………………………………. 7

Structure of Capital

Markets…………………………………………………………….

……………………………………. 16

Financial Market Performance, Future Outlook, and Investment

Opportunities……………….…… 20

2 | Page

Bibliography…………………………………………………………………………………

………………………………..………. 27

Appendix………………………………………………………………………………………

………………………………………… 29

EXECUTIVE SUMMARY

Spain is the 27th largest country in the world located in Western Europe. It is

a member of the European Union and the official language is Spanish. It has

the 13th largest economy in the world.

The Euro crisis drove high inflation in 2012, and in turn, depreciated the Euro

against the US dollar. By 2013, the inflation rate reduced and has steadily

strengthened the Euro since then. However, projected growth and tightening

policies in the U.S. project to strengthen the dollar, which will depreciate the

Euro against it.

Once revered as a financial example for the world, Spain’s financial downturn

due to the private banking sector’s involvement in the housing crash started

an unfortunate domino effect in the market. With the highest EU

unemployment rate of 26% and a humble GDP in 2009, Spain needed help

getting back on its feet and out of a recession in the financial market.

Fortunately, the EU created a stimulus package that, similarly, resembled the

US Brady bonds and debt-for-equity swaps. Although Spain is improving at a

slow rate, Spain continues to climb further out of the recession. Looking

forward, Spain should invest in its small businesses to help create jobs.

Ultimately, job creation (especially for youth) increases social...