The global financial crisis, brewing for a while, really started to show its effects in the middle of 2007 and into 2008. Around the world stock markets have fallen, large financial institutions have collapsed or been bought out, and governments in even the wealthiest nations have had to come up with rescue packages to bail out their financial systems.

On the one hand many people are concerned that those responsible for the financial problems are the ones being bailed out, while on the other hand, a global financial meltdown will affect the livelihoods of almost everyone in an increasingly inter-connected world.  The problem could have been avoided, if ideologues supporting the current economics models weren’t so vocal, influential and inconsiderate of others’ viewpoints and concerns. (1)

One of the main causes of the financial crisis is unemployment, which is becoming exorbitant numbers. Many economists believe there is a tangible connection between unemployment rates in the above ground economy and subsequent increases or decreases in the underground economy. Essentially, when official unemployment figures rise significantly in the legitimate economy, the result is a larger pool of undocumented workers available for jobs in the underground economy. It often comes down to a matter of financial survival for a certain segment of the population who do not qualify for unemployment compensation or other legitimate forms of aid. (2)

Nowadays the crisis and unemployment caused by it are issues that are on everyone’s lips and a consequence is the underground economy. If unemployment rises, this type of economy will rise too. So I decided to choose this subject because I consider that it is current topic and it is important for society.



Nowadays many countries are losing large amounts of money. The crisis is affecting everyone, but some places are more affected than others. Some countries have managed to overcome the crisis, or not to enter, a very good way. But other countries, however, have failed to do so and they have a lot of problems.

Governments are looking for solutions, but it is not easy to find a way out. The problems are many and they are growing increasingly more. To prevent that this don’t happen some government proposals are, for example, to privatize some public enterprises. So, the State will not have many expenses.

For instance, Greece is one of the countries most affected by the crisis. So, other countries as Germany, are buying shares of some public companies in Greece. Thus it is intended that these countries that have managed to bring the crisis well can to make the country have the situation before, stability.

The European Union was created many years ago. In the beginning there were few countries that were part of it, but over time the number of countries that form it were rising. Among the countries which are members we can find Germany.

With the current financial crisis that we are living, all countries within and outside the European Union are being affected. The common currency of the countries of the European community is having problems. Young people call for improvements, but the government does not give it.

Germany on the other hand, is one of the countries least affected by the financial crisis. Constantly they are creating jobs, so many people from other countries, especially young people with studies, are going to work in Germany.

But this has to go on and the European Union should not be separated. Its creation was very important and there should be nothing that separates this group of countries. Cooperate together to solve problems can be better.

In these times is common to hear to speak about the crisis, as it is a current topic. We are immersed in it and the main thing is to seek solutions to overcome this crisis. All governments of different countries are looking for solutions.

Each person talks about the situation that is each country or other countries and the comments you hear are not good. We need to cooperate together to find a good solution, because so far we have not found.

I hope that does not reach a point where we can not do anything. Throughout life we have come out one way or the other of any crisis. It is one more, so here the solution must come sooner or later.

In my opinion I think governments are the only ones who can carry out different solutions and we follow them in order to overcome this crisis.

Nowadays the human activities are causing a lot of damages in the ecosystem. Pollution, the misuse of certain gases and other performances that people have been doing a lot of time cause, among other things, that the ozone layer breaks. It has got a big hole that it can affect us seriously.

But although we know that if we continue to doing these activities the end of the world will arrive soon, we do not do anything to avoid it. This affects current generations, because we can already see the consequences of our performances. But the people who are most affected, are our children and future generations. They will have a lot of problems to survive.

The future is in our hands. I think that we have to think a little more in the not too distant future and the world. It would be nice that all things that we have and we have got we can preserve.

With time we have advanced in more aspects. One, which we have advanced a lot, is the communications, above all trough Internet. In the past no one could think that would be so easy to do things that we can do now: communicate with your family while you are being on holiday, look for a couple, meet people with similar interests as you…

Nowadays this is very normal. The new generations already know this systems since they are young and the know how to use it perfectly. They speak with their friends, they gather with their classmates of a few years ago…and all through social networks. In my opinion this is a great invention because it allows saying what you want at anytime, anywhere and any person you want.

But among all the social networks that exist there are some with more success. And in each there are different people registered, for instance, for fans of dogs, or fashionistas… but all serve to communicate and express your ideas.

Facebook, twitter…are some of the best known. And in the near future will appear much more with a lot of new and more facilities to communicate. And above all safer because they will protect better your personal data.

I´m inside this virtual world and I think it’s one of the best things that exist as to technology.

The Tea Party Movement is an American populist political movement formed by person with different ideologies. The most noteworthy are conservative and libertarian ideologies. Since 2009 the Tea Party Movement is more recognized for its protests to both Democrats and Republicans.

This party agrees with the reduction of public spending, to reduce public debt and federal budget deficit. They also oppose taxes and they want to return an original interpretation of the United States Constitution.

All of this is fine, but the money is necessity to pay the expenses of the state. The Democratic Party says some ideas to save United States of the crisis and Republican Party says other different ideas, but they do not agree among themselves.

In my opinion, all the parties have good things and bad things; if they put together all their ideas could greatly improve the U.S.

The citizens only can choose the party which like them and the government must do the rest. They must rescue U.S. from crisis.

The crisis has had a lot of consequences and one of them it’s the down of the home prices, overcoat, of the second homes.

Spain, Greece, Italy and Spain are countries that they are suffering the homes crisis.

All started when builders began to build without end and very quickly. Also sometimes they hadn’t building permits, and they chose the places where they were forbidden to build. This meant that banks had a lot of debt and it has caused that the banks don’t give the people credits to pay the mortgages.

With this and the unemployment the people can’t pay the second homes, so that the prices of the villas must come down. Some of them have been reduced to a 50 % of its original price. Also it has been reduced houses rents.

However, more people see this fall in prices as a good thing, because it is an opportunity to buy some glamorous homes. Maybe they couldn’t buy these houses if they had their original price.

I think that there isn’t solution about fall of the prices of the second homes. Until the crisis doesn’t finish, the problems of the prices in the houses will be continued. If there isn’t demand the prices fall.

http://www.iedm.org/files/cdr_nov07_en.pdf

http://www.wisegeek.com/what-is-the-underground-economy.htm

http://diydollars.com/diy-life/the-underground-economy/

http://www.iedm.org/files/cdr_nov07_en.pdf

http://www.telegraph.co.uk/finance/breakingviewscom/6378327/Recession-hit-Spain-goes-back-to-black-economy.html

http://www.entrepreneursolo.com/entrepreneurs-in-spain/the-growth-of-the-black-economy-in-spain

http://www.google.es/imgres?q=andalucia&hl=es&biw=1920&bih=878&gbv=2&tbm=isch&tbnid=dbC8XN76klyESM:&imgrefurl=http://es.wikipedia.org/wiki/Andaluc%25C3%25ADa&docid=XojRU9tYfaQoJM&imgurl=http://upload.wikimedia.org/wikipedia/commons/thumb/f/ff/Localizaci%2525C3%2525B3n_de_Andaluc%2525C3%2525ADa.svg/240px-Localizaci%2525C3%2525B3n_de_Andaluc%2525C3%2525ADa.svg.png&w=240&h=181&ei=ygGnTrv9AeOH4gT82-0N&zoom=1&iact=rc&dur=2&sig=105372767323333678855&page=1&tbnh=144&tbnw=192&start=0&ndsp=32&ved=1t:429,r:0,s:0&tx=76&ty=71

http://www.barcelonareporter.com/index.php?/news/comments/more_than_half_the_immigrants_in_spain_work_in_the_underground_economy/

http://www.google.es/imgres?q=inmigrantes&hl=es&biw=1920&bih=878&gbv=2&tbm=isch&tbnid=zVMfVjiSv9pUTM:&imgrefurl=http://gonzo22.wordpress.com/2008/06/19/necesitamos-a-los-inmigrantes-de-manera-ordenada/&docid=HgL2Sul29UX1eM&imgurl=http://gonzo22.files.wordpress.com/2008/06/inmigracion.jpg&w=300&h=298&ei=6r-mToz9DMvLtAbB8fDMDQ&zoom=1&iact=rc&dur=129&sig=105372767323333678855&page=2&tbnh=146&tbnw=177&start=34&ndsp=34&ved=1t:429,r:3,s:34&tx=118&ty=76

http://www.eui.eu/DepartmentsAndCentres/RobertSchumanCentre/Research/InternationalTransnationalRelations/MediterraneanProgramme/MRM/MRM2012/ws03.aspx

http://www.google.es/imgres?q=economia+sumergida&hl=es&biw=1920&bih=878&gbv=2&tbm=isch&tbnid=kOCzO1uV8QeISM:&imgrefurl=http://blogdeantonioesteban.blogspot.com/2009/10/fraude-fiscal-vs-economia-sumergida-i.html&docid=SazbPEbnvLppzM&imgurl=http://4.bp.blogspot.com/_WXf3-xG-eis/StmgyaOXyfI/AAAAAAAAAnQ/NfuI7YWa574/s400/oc17.30.jpg&w=400&h=259&ei=M8CmTsXzBMyKswath9DUCA&zoom=1&iact=hc&vpx=1384&vpy=525&dur=272&hovh=181&hovw=279&tx=127&ty=129&sig=105372767323333678855&page=1&tbnh=157&tbnw=222&start=0&ndsp=33&ved=1t:429,r:23,s:0

At the time, the underground economy is widely perceived as growing, fuelled in part by a weak economy, growing federal deficits, high unemployment rates…

The most realistic estimates suggested the underground economy in Spain accounts for between 16% and 20% of GDP and that irregular activities are increasing by crisis. These figures serve to realize of bad situation of Spain. Although the government Work inspections to combat the underground economy accounts for 40%, these are mostly in conjunction with risk prevention (20%) or employment regulation (15 %), the underground economy continues to increasing .

 According to the article by sector, «the figures show a total of 49,903 inspections in hotels, it is followed by commercial businesses (44,937), construction (43,635), service industry (38,045) and agriculture (9,248).

 From these inspections, fines to Social Security totalled 960.7 million euros, representing 12.4% more than in 2008. In addition, 48,762 people began to pay into Social Security as a result of these actions, of which 23,924 were voluntary (+10.52% on 2008) and 24,838 demanded (+14.43%). It is reported that 29,357 violations were for lack of any social security payments, 7,122 workers had no work permit and another 8148 which were also claiming unemployment benefit, plus 682 of the detected irregularities were linked to other claimed benefits.

 One of the Government’s goals in increasing fraud inspections was to transform 30,000 illegal workers into permanent temporary staff, the final figure turned out to be much higher at 52,000.»

Link of the article: http://live.kyero.com/2010/01/13/20-of-spains-gdp-in-underground-economy/

 Despite all the inspections the economy continues in force and this is partly a problem of government.

The government should be tougher on this issue and should set higher standards.

In these times of crisis it is difficult to wipe out the entire country’s underground economy, but at least it may decrease.

I think when we improve the current economic crisis, underground economy activities will be reduced but never completely finish because people like to earn money, and even more when wages are not very good.