Lánafyrirgreiðsla til heimila og fyrirtækja á Spáni þornar upp, þrátt fyrir evru

If we look at the evolution of headline GDP itself, we can clearly see two "breaks" in the data, the first in the middle of 2006, representingwhat we could call the "housing slowdown". This was evidently provoked by the interest rate raising cycle at the ECB together with the rising cost of mortgages and the impact of both of these on growth. The second break is alos clear enough even for the untrained eye, and comes in the second half of 2007 (following the closing of the wholesale money markets to Spanish financial products), and this is when, in any meaningful sense, the long boom in the Spanish economy really and decisively reached its peak and the downturn - or recession as defined by being "a broad contraction of the economy, not confined to one sector" - really got underway. Remember, a car travelling at 120 Km per hour on the motorway which runs out of petrol can still roll on for another couple of kilometres before coming to a complete stop.

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