In this follow-up we present proof of just how badly Spanish leaders planned for the new “Golden Age” by investing way too heavily in real estate
and perching their country on the edge of an abyss:
A total of 217 billion euros has been invested by Spain’s savings and loan banks into the real estate sector, and 46% of this figure has been labelled “potentially problematic” by the Bank of Spain. These figures were announced today by the Governor of the Bank of Spain, Miguel Fernandez Ordonez, cited by EFE.
Twenty-eight billion euros of the 217 billion total invested into the sector are loans in default; payments for the same amount are still outstanding and present a certain measure of risk, while 44 billion euros in loans have been granted for land.
In his assessment of the recapitalisation decree for the savings and loan banks passed by the government, the governor said that the measure “was absolutely necessary”. “I am not in agreement with those who say that Fund for Orderly Bank Restructuring”, the FROB, was sufficient, said Ordonez.
The governor also stated that the new regulation “aims to dispel doubts and uncertainty about the health of the Spanish financial system and seeks to restore faith in the markets”. Since the FROB has been established, restructuring and mergers in the sector have reduced the number of savings and loan banks from 45 to 17.
Spain looks to be in a death-spiral. With a birthrate of 1.2 and projected to lose over 50% of its population in the next 35 years, it is almost impossible for the country to regain traction.
See also: Spain: Villa Values HALVED, Pensions Have Crashed
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