Spain's Economy is on the Rise!

            Spain pulled out of a two-year recession in the third quarter, with its economy growing 0.1 percent from the previous quarter, according to preliminary data released today by the Spanish central bank. While anticipated, the growth news will likely provide a bonus for the conservative government of Prime Minister Mariano Rajoy, which, since coming into office almost two years ago, has pushed through severely unpopular spending cuts and tax increases in order to work with budget targets in accordance with Spain’s European partners.
            Still, Spain is not expected to return to normal growth levels for several years as it continues to struggle with weak consumer spending and an unemployment rate of about 26 percent. Last month, the government presented its budget for 2014 based on a prediction that the Spanish economy will grow 0.7 percent next year. Gross domestic product is expected to contract 1.3 percent this year, according to Mr. Rajoy’s government. Spain’s economy had diminished for nine consecutive quarters. After a decade-long property explosion in 2008, it sank into a first recession, before briefly returning to growth in 2010. The Spanish economy was then hit by a banking crisis that forced Madrid to negotiate a European bailout to keep afloat Bankia and other lenders weighed down by property loan defaults. In the end, Spain used 41 billion euros, or $56 billion, of the 100 billion euros that it negotiated in a European banking rescue package.
            Even before today’s data, the government praised the economic turnaround. But the fact that Spain has been in and out of recession since 2008 has left some economists on the fence about the solidity of the latest recovery. Spain’s exit from recession has also been coupled with renewed investor confidence. The main Spanish stock market index climbed this month to its highest level since July 2011. Spain’s borrowing costs have also recently fallen sharply.
            This article was written October 23, 2013 by Raphael Minder. This is reminding me of the state of America’s economy. We keep fluctuating between being in a recession and not being in a recession and people are more hesitant in investing. I think until Spain’s economy is stable for about two years or so, it will start growing to its full potential. I mean, with the whole thing happening in Spain people aren’t going to trust it right away because something might happen. So, that’s why I would think that it would take a couple years for it to fully recover.

Floods are on the Rise, and so is Insurance

           Sharp increases in federal flood insurance rates are distressing coastal homeowners from Hawaii to New England and are starting to hurt property values and housing sales in areas just beginning to recover from the recession, according to residents and legislators. In recent weeks, the hefty flood insurance rate increases brought about by a 2012 law have stoked widespread alarm and uncertainty, prompting rallies, petitions and concern among state governors. Mississippi has sued the federal government to try to block the law. The issue has even garnered the attention of lawmakers, otherwise mired in the acrimonious government shutdown. A bipartisan group of senators and House members from Gulf Coast states are pressing for significant adjustments to the law once the Capitol returns to normal.
            The law, officially known as the Biggert-Waters Flood Insurance Reform Act, is being rolled out in stages, with a major part having gone into effect on Oct 1. It removes subsidies that keep federal flood insurance premiums artificially low for more than a million policy holders around the country — a discount that was applied to properties that existed before the drawing of flood insurance rate maps. An estimated 20 percent of the property owners with federal flood insurance received these subsidies as the new law went into effect, and their premiums will rise, in some cases precipitously, either now, over the next several years or whenever they sell their properties. The exact amount of the increase depends on the home’s elevation above flood level.
             Approved by Congress in July 2012 as part of a wide-ranging transportation bill, the Biggert-Waters Act was intended to regain control of an increasingly unsustainable National Flood Insurance Program. The subsidies within that program, in the view of critics, encouraged development in risky areas and led to costly claims after catastrophic events, payouts that were borne largely by those paying market rates. But the effort to stabilize the program means changing rules that have guided development in flood plains for decades. Some property owners, including business owners and those who bought property after July 6, 2012, are shocked to be facing potential tenfold premium increases or, in some cases, significant losses to the value of their homes. Still, in recent years, costly flooding disasters, including Hurricane Sandy, have left the program $25 billion in debt, a situation that will most likely worsen because of climate change and coastal overdevelopment. And almost everyone involved agrees that the issue is not whether to change the program, but how to soften the impact on those hit hardest by the cost increases.
             This article was written on October 12 by  Lizette Alvarez and Campbell Robertson. It's obvious that these people are getting angry about the flood insurance premiums because of the recent storms that have hit, but isn't it the responsibility of the government to help out those people in danger of losing there homes to floods? But then again, the government is shut down due to very stupid reasons and won't do anything at the moment.

Is Greece Making a Come Back?

             Prime Minister Antonis Samaras seized on new economic data that indicated the country was on track to economic recovery and promised relief to Greeks weary of years of austerity. Citing figures released by the national statistics agency, Samaras said the Greek economy shrank 3.8 percent in the second quarter, significantly less than an estimate of 4.6 percent. It was the smallest contraction since 2010 when Greece signed its first multibillion-euro loan deal with its creditors- the European Commission, European Central Bank, and International Monetary Fund.
             The improvement is largely the result of an unexpectedly strong rebound in the country's crucial tourism sector with a record 18 million foreign visitors expected this year. Equally encouraging are early indications that the country will achieve this year a primary surplus. Samaras said that achieving the surplus would open the way for two things, in line with an agreement with creditors - some form of debt relief for Greece, but also the chance to help citizens who have been hardest hit by austerity.
             It remains unclear exactly how large the surplus will be; preliminary figures put it at $3.4 billion for the first seven months of the year. Samaras said 70 percent of the surplus would go toward "lightening the injustices" suffered by Greece on low pensions and by members of the police, fire service and coast guard whose salaries have been slashed as part of public sector cutbacks. Greece remains wracked by political and economic instability and ma even need additional bailout money. The IMF warned in a report that a persistent recession, now in its sixth year, and the government's failure to accelerate overhauls might create a $14.5 billion hole in Greece's finances over the next two years. The IMF said Greece's economy could return to growth as early as next year, but that forecast comes with a question mark, given that that output has fallen 25 percent since its peak in 2007 while unemployment has surged to 27 percent - the highest in the Eurozone - and youth joblessness tops 57 percent.
            This article was written in the New York Times on October 2. I, personally, did not know about the economic problems that Greece was having. Well, I knew that they had a problem, but I didn't know how bad it was. But, with this new evidence, it looks like they could be due for a come back. Then hopefully, they will try to not make the same mistake again in the future.