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Dramatic economic downturn in the works for Spain.

Posted by Adrian on January 8, 2008

As discussed in the post Spain’s contracting property market, with various detailed links covering the Spanish economy throughout 2007. It appears the highly leveraged Spanish economy is extremely vulnerable to the global credit crunch . Which massive debt and high inflation and now falling house prices, the stagflation recessionary model seems to fit countries such as Spain and other EU countries namely Ireland and the UK. From FT.com

“The mood is especially sombre in provincial towns such as Igualada, a prosperous textile and leather manufacturing centre near Barcelona in the north-east.

“I’ve been a bank manager for 28 years and I have never lived through a situation as dramatic as this,” says the branch manager of a regional savings bank, who asked not to be named. “House prices in this town have fallen by 20 per cent, there is no demand, and no mortgage finance. Savings banks have cut off funding. Before the credit crunch, I used to do 12 mortgages a month. Since August, my branch has approved only one new loan.”

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3 Responses to “Dramatic economic downturn in the works for Spain.”

  1. […] comes to mind is Spain, problems with the Spanish economy have been discussed on morbius glass in Dramatic economic downturn in the works for Spain and Spain’s contracting property market (with detailed links the Spanish markets). The […]

  2. […] has been covered in morbius glass, there have been brief flashes of media coverage of Spain. But the outlook is always the same. A […]

  3. Eric,NYC said

    As I always say to the Spaniards….”modernity does not suit you…you always imitate,take shortcuts or connive along the way and you get it all wrong”.
    Basque and Catalan nationalism,over-immigration and now a world recession hitting the greedy overdevelopers of Spain….could this be Spain’s end ?
    I am a New Yorker of Cuban parents ,of Spanish descent,travel to Spain(BCN business)often and always observed how WRONGLY they conducted business.How overtly idiotic their mistakes would be…I warned them the construction boom would go bust and laughed at me…”SPAIN EEZ NUMBER ONE !!” .I now say to them “ESTAIS JODIDOS !”(you’re all fucked !)
    God knows what the hell is coming….the US will hopefully get back on track ,Spain will have a lot of reflecting to do.25 years of fiesta are over !!!

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