We’re going to Spain, another country hit by the economic crisis. Because of an explosion of the property bubble, last year in Spain, there was too much construction: for example on the coasts, the equivalent of two pyramids of Kheops was built daily. But only debt remained. The average debt for each family was 45%. Too much. And then the system exploded like an air bubble. A Spanish MEP and a Spanish trade-unionist discuss the housing crisis in Spain and the European consequences.

The enlarged EU is now the largest integrated economic area in the world, accounting for more than 30% of world GDP and more than 17% of world trade. Income per capita in new Member States has risen from 40% of the old Member States' average in 1999 to 52% in 2008 and growth averaged 5.5% from 2004-2008 compared to 3.5 % in 1999-2003.

GDP growth in the European Union is expected to fall by 1.8 % in 2009 before recovering moderately to 0.5% in 2010. This is the result of the impact on the real economy of the intensified financial crisis, the ensuing global downturn manifested in the severe contraction of world trade and manufacturing output and, in some countries, housing-market corrections. Government consumption and public investment, however, will provide relief. The fact that inflationary pressures have eased also contributes to private consumption. The discretionary fiscal measures announced since August 2008 will limit the contraction in GDP growth by about ¾ pp. this year. The severity of the economic downturn will have a significant impact on employment and public finances over the forecast horizon.