1 Global Real Estate Institute España GRI 2014 Madrid May Keynote speech: “Spain’s Convalescence” Prof. Pedro Schwartz B.Ll., Dr. Iuris (Madrid), M.Sc. (Econ), Ph.D. (London)

2 A weak €zone

3 Money market interest rates

4 €zone inflation (Annual % changes)

5 Spreads against Germany

6 Probability of credit events

7 € effective exchange rate

8 €zone current account surplus

9 €zone & US stock indices

10 Spain was pretty sick

11 Spain’s value added in construction

12 Unemployment and employment rates (Spain)

13 €zone unemployment

14 Spain: bank loans

15 Spanish bank: non performing loans

16 Doubtful bank assets (SAREB effect shaded area)

17 Spain is convalescing

18 Economic forecast (Spanish Government)

19 Foreign sector contribution to GDP growth

20 Competitiveness

21 Exports grow, more than imports

22 Spain’s current account in surplus In the full year 2013, the current account recorded a surplus of EUR 7.1 billion (equivalent to 0.7% of GDP), which contrasts the EUR 11.5 billion deficit (equivalent to 1.1% of GDP) tallied in 2012 and marks the first surplus since 1986 Consensus reckons surplus to be 1.9% of GDP in 2014 In 2015 surplus could reach 2.2 % of GDP (Source: Focuseconomics)

23 Confidence returns

24 Low systemic risk indicators

25 ECB loans to €banks

26 New credit to non-financials by Spanish banks

27 Spanish inflation

28 Spanish Budget deficit

29 Spanish public debt

30 Compared real GDP growth (Δ 1.4% in 2014)

31 Universidad San Pablo (Madrid)