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Spanish recovery ‘will take longer’ - 3 September 2009

Following the good news that France and Germany are officially out of recession, EU Economic Commissioner Joaquin Almunia has sounded a note of realism by stating that the recovery of the Spanish economy will take considerably longer due to the extent of the property crash.

He estimated that Spain could begin its economic recovery in 2010, but said, “The causes of economic decline in Spain, and in particular the situation in the housing sector, will make the recovery slower.”

Mr. Almunia also indicated that the recovery would be more complicated than in other European nations, where positive growth figures have been seen following seemingly deep recessions.

Spain entered its first recession for 15 years at the end of 2008 as unemployment soared on the back of the global credit crunch. The National Statistics Institute stated last week that the economy shrank 1.1 per cent in the second quarter of this year, the fourth consecutive quarterly contraction and worse than the one per cent predicted.

Much of Spain’s recent economic prosperity has been due to a booming housing market, which saw buyers from right across Europe flock to buy property in Spain with cheap credit.

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