A Different Style of Bailout: Spain

With the European Union's impending recession and Spain having the highest unemployment rate in the Union, the Spanish government has rolled out a maiden program allowing out-of-work homeowners to defer mortgage payments. Under this mortgage-relief program, unemployed homeowners and even a group of retirees can postpone at least half of their monthly bill for up to two years, beginning this January, so long as the deferred amount does not exceed 500 Euros (Approximately $635.) The program will be offered to those with mortgages up to 170,000 Euros, totaling about half a million people.

The Spanish government will underwrite the deferred payments, which may be spread over ten years. But the assistance doesn't end at the deferment. The government will give businesses some incentive to hire those who are receiving benefits by paying companies 1,500 Euros per year for each job given to an unemployed worker supporting a family. Additionally, the government plans to award bonuses to companies that hire in the areas of research and development, and renewable energy. The program is designed not only to help with the mortgage challenges faced by those who have lost employment, but also to boost the country's economy on the whole by allowing their unemployment checks to be spent on consumption rather than in simply paying their mortgages. With unemployment's potential to hit 15% next year, Spain needs labor changes. The plan to create new jobs will be public spending on infrastructure projects to help stabilize Spain on the long-term.