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At the present, the country’s political infrastructure can be considered relatively stable given that there have not been any significant amounts of civil unrest as seen in the case of Greece and Syria. Unfortunately there has been a growing level of discontent within the country over the increasing disparity between the rich and poor and the fact that no effective solution to jobless rate has been presented by the government. As such, this creates a potential powder keg situation within Spain that has the potential to erupt within the next few months.
An examination of the economic conditions of Spain reveals that the entire country is currently within a financial recession that has been brought about through a combination of the current European debt crisis which has created a region wide economic contraction as well as a recent local real estate bubble burst which has severely crippled the Spanish economy. The end result has increased the unemployment rate of Spain to 25% with little, if any, economic recovery in sight due to lackluster demand for goods locally as well as a waning global economy that has been impacted by a lack of consumer demand on the part of the U.S. as well as a slowdown in China’s manufacturing growth (Martin-Moreno, Perez, & Ruiz, 2012). What you have to understand is that if a large percentage of the population is unemployed this would also affect localized demand since fewer people have extra money to spend on what can be defined as “luxuries” (Martin-Moreno, Perez, & Ruiz, 2012).
Finance Options Available
One of the current finance options available within Spain for the establishment of Coca Cola within the country is the use of bank loans or various types of bank financing in order to pay for aspects related to import and storage costs, employee salaries as well as various marketing peripherals. It is rather unfortunate to note though that due to both the debt crisis and the recent real estate bubble burst, banks within the country have been reluctant to lend money to all levels of business whether it is a well established large enterprise or small to medium scale companies (Martin-Moreno, Perez, & Ruiz, 2012). While it may be true that it is always possible to find external sources of finance from other countries, the fact remains that the ability of local merchandisers to actually pay for the product must be taken into consideration.
Martin-Moreno, J., Perez, R., & Ruiz, J. (2012). Private consumption and sector price behavior in the Spanish economy: a business cycle approach. Applied Economics Letters, 19(9), 863-868.