Spanish Economy

Spanish Prime Minister José Luis Rodríguez Zapatero met on Friday to discuss the financial crisis in Europe.
Spanish Prime minister Zapatero encouraged the idea of a European solution to the banking and credit crisis rather than a single body implementing a plan.
Spain has been least hit by the crisis because of its previous lending policies over the years. Spanish banks not being so tempted to dive into the high risk credit lending arena which created an environment of gambling with customers on all levels and risking bank money to high risk borrowers , left Spain a little more confident than its other European partner countries.

Prime Minister Zapatero announced that the Spanish economy should continue to strengthen slightly over the next twelve months. With the highest rate of unemployment(10.7%) in Europe at the moment and inflation at around 5%, this could be nothing more than positive thinking.

The fact that he has announced the creation of a 30 billion euro fund to assist banks to buy assets and ensure secure banking is a sign that Spain is worried about the effects of the world-wide crisis.
The measure to protect personal finances in European bank accounts from 20,000 euros to 100,000 E was taken in Luxembourg earlier in the week.


Spain has been based on a housing market economy which has been suffering since the boom ended more than two years ago. At the moment, analysts say that the fall in prices has reached a point where it won't fall anymore. People will not want to sell their property for a pittance and although it is becoming a buyers market, there are many property owners in Spain who do not rely on the property for dwelling but rather long term profit. These people would be best advised to hold on to their property and wait till the market returns to normal. Taking what they can in short term rentals rather than property speculation.