Monday, Aug 18, 2008
Not all Sunny in Spain!
Bloomberg: Spanish Loan Delinquencies Increased by EU3.2 Billion in June
"Spanish loans in arrears climbed by 3.2 billion euros ($4.7 billion) in June as the country's economic slump deepened after the collapse of a 14-year real estate boom"
Posted by alan @ 06:34 PM (400 views) Add Comment
5 Comments
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1. plato said...
This is what they are saying in Spain :
The Deputy Prime Minister and Minister for Tax and the Economy, Pedro Solbes, has rejected the suggestion that Spain is paralysed by the economic crisis, and forecast improved growth in the third quarter. In an interview with the EFE news agency, he said that the Spanish economy was close to the crossbar of recession, but he said that it would not reach it.
Figures for the second quarter of the year show that the Spanish G.D.P. grew by only a tenth of a point leaving the annual growth rate at 1.8%. The Government has noted that, at least, is higher than much of the Euro zone, and claimed that Spain continued to have a greater capacity than the rest of the economies in Europe.
The slowdown is due to a fall in internal demand, with the economy seriously affected by the increased price for crude. The Bank of Spain has said there is increased uncertainty and a growing lack of confidence.
The Government has now approved a program of 24 economic reforms which will be introduced this year and next and which will affect housing, transport, energy, telecommunications and the environment. The new package includes 20 billion € in help for small businesses and VPO assisted housing.
It comes as the economy of the Eurozone has contracted for the first time in its history. The European Central Bank has however said that the economic bases are strong.
2. Whostolemyendowment said...
Countries like Spain are the soft underbelly of the Eurozone.
3. Adamsmithll said...
The word on the street in Spain is that the banks are up the creek without a paddle and are borrowing from the European Central Bank in huge amounts. Some of this borrowed money is being used by Banco Santander to buy Alliance & Leicester plc....
Not a great way to spend taxpayers money.
4. enuii said...
Cough, cough, something like 20% of the Spanish Economy is tied up in construction and another large chunk is British tourism, with the strength of the Euro I can see many people and families not booking their 2009 holiday to Spain. Spain has not seen the worse yet as many people were financially committed to the 2008 season and are not as yet to the 2009.
5. plato said...
Absolutely right enuii.
Come 2009 Club Med will feel the real effects on their main sources of income. The question is whether they have the internal industry to maintain their own economies. I doubt this very much. However Spain is now the strongest of these countries and will be put to the test,so we will see just how strong she really is.
Zapatero may well become a zapatero.