“In these almost boring times of generalized growth, the press is particularly eager to look for catastrophic events in the perennial quest for the newest ‘sick man’ of Europe. Having read the Directors’ preliminary statements, I realize that we probably overstressed our disdain for this press coverage, which one could call the ‘momentum catastrophicum literature’.”
These were the words of the executive director for Spain, Ramón Guzmán, at a meeting of the International Monetary Fund executive board held on May 16, 2007 to analyze the Spanish economy, the minutes of which have now been declassified.
Economic activity in Spain at the time was being buoyed by the boom in the housing market, while consumer spending had peaked. As such, the IMF was greatly concerned about the chance of the bubble bursting, and a subsequent crisis.
The initial statements from the rest of the executive directors drew attention to the notable differences between the vision of the analysts who had been examining the Spanish economy, and the vision of the authorities in the country regarding the risks of the economic situation. Guzmán wanted to clarify that these discrepancies had been “misinterpreted,” and that if in his opening statement he had said that the consequences of a slowdown in the real estate market were often “overestimated,” what he was trying to reflect was “the extensive coverage that property market developments receive in the domestic and international financial press.”
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