During the past financial year, the Spanish economy grew at more than twice the rate of the euro area as a whole. Many attribute this substantial difference to so-called tailwinds, largely exogenous and temporary, which, of course, had a very favourable effect on countries linked to the euro, including Spain. However, what explains the difference between the pace of growth in our country and the rest of the countries lies in other reasons of a deeper and more persistent nature. Three arguments stand out: the first is the gain in competitiveness achieved through a broad set of reforms aimed at reducing the cost structure of our productive system and also thanks to the continued internationalisation efforts of Spanish companies.
The second is due to the progressive reduction of private-sector indebtedness. The third reason lies in the strength and solvency of the Spanish banking system, which, after the profound restructuring undertaken during the crisis, has managed to operate with a high degree of efficiency, improve the quality of its assets and strengthen its capitalisation. In this way, Spanish banks have laid the foundations to fulfil their primary role of financial intermediation, channelling household and business savings into productive investment.
This was evidenced by the flow of new loans granted during the past financial year, and we expect that this year it will also be reflected in a stock of credit that, if the economic situation does not deteriorate, will record positive growth rates for the first time in recent years. Now, why is there a greater willingness to lend at this time, and to what extent will Spanish banks be able to continue fulfilling their role as a fundamental support for economic growth?
The reasons why this is the case now have to do with the ECB’s monetary stimulus and the Banking Union project in Europe. However, for banks to be able to continue supporting the financial needs of Spanish households and businesses in the coming years, two necessary conditions must be met.
