Spain in crisis (2007-2014). A view from the Eurotower. Volume IV Overcoming the crisis

This book offers in four volumes a detailed narrative of the crisis in Spain (2007-2014), from the perspective of someone who followed it closely at the European Central Bank:</o:p>

• Volume I. From the financial crisis to the sovereign debt crisis (2007-April 2010).</o:p>
• Volume II. Spain delays being rescued (May 2010-July 2011).</o:p>
• Volume III. Rescuing Spain (August 2011-July 2012).</o:p>
• Volume IV. Overcoming the crisis (August 2012-2014).</o:p>

The final volume of this book covers the economic recovery and the slow development of the banking union. The recovery of the Spanish economy followed an unprecedented pattern in its history. Previous episodes had been characterized by correcting the external imbalance and restoring competitiveness through devaluation, leading to an export led rebound of output and internal demand that started a new cycle of rising indebtedness, credit, wages and inflation. Within the monetary union, the recovery would be led by exports, as on past occasions, but in contrast, it would be “debtless”, with private sector deleveraging, “credit-less”, with a continuous contraction of credit, and “priceless”, with a negative inflation differential with respect to the euro area.

In the adjustment of the Spanish economy, the structural fault lines existing in the government, in market regulations and in the financial sector were addressed with unequal results: rather poor in the political sphere and government performance, mixed in the economic reforms, good in financial restructuring. Concerning the euro area fault lines, the “Four Presidents Report” had advised in 2012 that four basic elements would need to be implemented over the next decade to provide a coherent and comprehensive architecture for the eurozone. These were integrated frameworks for financial, fiscal and economic policies, as well as democratic legitimacy and accountability in decision-making within the monetary union. Twelve years later, very little progress had been made on all four fronts.

Critiques:

“Jose Marín has published an excellent book which reflects his deep understanding of the complexity of European integration. Highly recommended reading”. Otmar Issing, former executive board member and chief economist of the ECB.

“José Marin’s book is an essential document to understand the threefold crises in Spain and other European countries: the economic recession, the financial crisis and the sovereign debt doom loop. Written by one of the most qualified witnesses, it is based upon the first-hand description