We have been fighting bravely along the years in order to have Banks liabilities recognised and these afflicted the corresponding legal punishments according to Law 57/68. ( Thanks Keith Rule for your encouragement on this)
We see the national elements which contributed to the Spanish disaster ( mainly lack of control by Bank of Spain) as we stated in this old post dated 8th of March 2009:
"As one of the majors causers of the current financial unbalance and as excessive earners as they were during the real estate boom, it is time for them to offer a social help in order to bring normality back to the real estate arena and the financial status of the world. Time to reduce those obscene benefits in favour or restoration of financial order. I think this is where most of the needed oxygen needs to come from. But I am not an economist and have no expert knowledge. It is just a common sense thought related to balance and equilibrium".
but we also see the International/ European roots of the same.,as explained in this other post dated last May 2011
"I think of Paul de Grauwe´s statements made in 1998 and wonder what he thinks of current situation of Spain. I guess he thinks that Europeans need to complete the Spanish dream, as it is not a dream we spaniards had alone.
We dreamt together, let´s work together for it to be completed:
This is a very telling paragraph of De Grauwe´s thinking, written, as you know, back in 1998, before everything started:
Suppose a country, which we arbitrarily call Spain, experiences a boom which is stronger than in the rest of the euro-area. As a result of the boom, output and prices grow faster in Spain than in the other euro-countries. This also leads to a real estate boom and a general asset inflation in Spain. Since the ECB looks at euro-wide data, it cannot do anything to restrain the booming conditions in Spain. In fact the existence of a monetary union is likely to intensify the asset inflation in Spain. Unhindered by exchange risk vast amounts of capital are attracted from the rest of the euro-area. Spanish banks that still dominate the Spanish markets, are pulled into the game and increase their lending. They are driven by the high rates of return produced by ever increasing Spanish asset prices, and by the fact that in a monetary union, they can borrow funds at the same interest rate as banks in Germany, France etc. After the boom comes the bust. Asset prices collapse, creating a crisis in the Spanish banking system.
This is why, we think that, after the effort made by the current governemnt for Banks to bring correction to the real estate market, you, Europeans, need to buy again in Spain.
I am asking this to you kindly and firmly: the product was made for you, inflated by lack of control, but once Banks are paying their sins and selling the products at real market´s prices. You need to buy again in Spain. :
Prices are fair and good enough now
"2011 Matalascañas.El Tapón", Matalascañas, Huelva, Spain, by jose_gonzalvo, at flickr.com