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January 9, 2008

Spanish economic problems

Topics: Economics

While the economic situation is worse everyday (you only have to see the situation of the construction/building sector, where there is a significant stop in an important percentage of new houses), the Government wants Spanish people not to know that, even when the inflation is very difficult to hide and the consumers' confidence in the economical situation is fading completely. FT has written a piece about this:

"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."
He says that for the first time, clients are handing in the keys of their homes and walking away from their debt problems. "With the fall in house prices, families are giving up. They don't see the point of struggling on with their mortgage payments." Repossessions, he says, are on the rise.

Zapatero has accused the Popular Party of being "causing an unnecesary alarmism about economy", when, from my point of view they are being too soft defending their positions. And Organization's Manager of the Socialists' Party, the stupid among stupid José Blanco, commonly known as Pepiño, has said that there are "a few clouds in the horizon but that everything will be solved in April (after the elections which will be held in March 9th, 2008). He has added that "the State has been saving so there will be no problem with families' savings (don't know what the relation is) and that the State is going to pay subsidies to the less fortunate in a less favorable economical situation, such as young people to rent an apartment, create more places for babies in public kindergardens and rising the minimum salary or the pensions, as few examplesi".

The crisis is going to be tremendous with this kind of experts in between.

Cross-posted from Spanish Pundit.

Posted by Eurabian at January 9, 2008 8:11 PM

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