COMMISSION STAFF WORKING DOCUMENT In-depth review for Spain in accordance with Article 5 of Regulation (EU) No. 2011/1176 on the prevention and correction of macroeconomic imbalances Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN CENTRAL BANK, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK 2022 European Semester – Spring Package
Date: 2022-07-22
Institutions: European Commission, Secretariat-General
Subjects: European Semester, Spain, economic policy, economic recovery, economic reform, energy policy, indebtedness, macroeconomics, multilateral surveillance, unemployment

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 22.7.2022  SWD(2022) 631 final/2  CORRIGENDUM  This document corrects document SWD(2022) 631 final of 23.05.2022. Correction of figures in table 2.1.  The text shall read as follows:  COMMISSION STAFF WORKING DOCUMENT In-depth review for Spain             in accordance with Article 5 of Regulation (EU) No. 2011/1176 on the prevention and correction of macroeconomic imbalances               Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN CENTRAL BANK, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK 2022 European Semester – Spring Package {COM(2022) 600 final} - {SWD(2022) 628 final} - {SWD(2022) 629 final} - {SWD(2022) 630 final} - {SWD(2022) 632 final} - {SWD(2022) 633 final} - {SWD(2022) 634 final} - {SWD(2022) 635 final} - {SWD(2022) 636 final} - {SWD(2022) 637 final} - {SWD(2022) 638 final} - {SWD(2022) 639 final}  
 
 
On  the  basis  of  this  in-depth  review for  Spain  undertaken  under  Regulation  (EU)  No 
1176/2011  on  the  prevention  and  correction  of  macroeconomic  imbalances,  the 
Commission has considered in its Communication “European Semester – 2022 Spring 
Package” (COM(2022)600 final) that: 

Spain is experiencing imbalances. Vulnerabilities relate to high external, government  and 
private debt, in a context of high unemployment, and have cross-border relevance. In 2021, 
debt-to-GDP  ratios  resumed  their  declining  trends  observed  before  the  pandemic  and  are 
forecast to fall further this year and next. The current account records a small surplus and the 
net  international  investment  position  has  reached  its  best  reading  since  the  mid-2000s.  Yet 
private  debt  remains  higher  than  before  the  COVID-19  crisis,  still  exceeding  prudential 
levels,  while  the  high  government  debt-to-GDP  ratio  remains  well  above  its  pre-pandemic 
level.  Non-performing  loans  continued  to  decrease,  but  some  risks  remain  especially  in 
energy-intensive  sectors  and  those  that  were  previously  hit  hard  by  the  COVID-19  crisis. 
Unemployment started to decrease again in 2021, but labour market segmentation and youth 
unemployment  remain  high,  although  past  and  recent  labour  market  reforms  and  the 
continued implementation of the RRP will help address Spain’s remaining vulnerabilities.   

1 

 
 
 
 
 
 
 
 
 
CONTENTS 

1.  Introduction 

2.  Assessment of macroeconomic imbalances 

3.  Thematic chapter: Private Indebtedness 

LIST OF TABLES 

Table b.1.1:   Selected exposures 

Table 2.1: 

Selected economic and financial indicators (Part 1), Spain 

Table 2.2: 

Selected economic and financial indicators (Part 2), Spain 

Table 3.1: 

Private debt indicators, Spain 

LIST OF GRAPHS 

Graph 2.1: 

Decomposition of Net International Investment Position (NIIP) by sector, Spain 

Graph 2.2: 

Decomposition of debt by sector (consolidated) 

 Graph b.1.1:  Sectoral distribution of energy use and of energy imported from Russia 

Graph b.1.2:  Spain goods and service trade balance – fossil trade contribution 

Graph 3.1: 

Thematic Graphs: Private debt 

Graph 3.2: 

Thematic Graphs: Private Indebtedness 

3 

4 

14 

11 

12 

13 

17 

4 

6 

10 

10 

14 

18 

2 

 
 
 
 
 
 
1.  INTRODUCTION 

In  2021,  over  the  previous  annual  cycle  of  surveillance  under  the  Macroeconomic  Imbalances 
Procedure  (MIP),  the  Commission  identified  “macroeconomic  imbalances”  in  Spain. (1)  These 
imbalances  were related to high external and internal debt,  both public and private, in  a context of still 
high unemployment and had cross-border relevance. The 2022 Alert Mechanism Report concluded that a 
new  in-depth  review  (IDR)  should  be  undertaken  for  Spain  with  a  view  to  assess  the  persistence  or 
unwinding of imbalances. (2) 

The economic recovery from the COVID-19 crisis has gained momentum, but new risks appear on 
the horizon. (3) The outbreak of pandemic halted six years of strong economic growth and dynamic job 
creation, as between 2013 and 2019. This cycle came to an abrupt end in 2020, when Spain experienced 
the  largest  GDP  contraction  (10.8%)  in  the  EU. However,  with  the  economic  recovery,  real  GDP 
increased  by  5.1%  in  2021.  GDP  growth  is  forecast  at  4.0%  in  2022  and  3.4%  in  2023.  The  external 
sector  will  be  the  main  driver  of  GDP  growth  in  2022  while  the  domestic  demand  in  2023.  Russia’s 
invasion of Ukraine has placed a further drag on the economy, due to the continuous disruption in supply 
chains  and  the  surge  in  energy  prices.  As  a  result,  the  recovery  of  the  pre-pandemic  level  of  output  is 
expected to be delayed until mid-2023. Inflation has picked up to 3.0% in 2021 and is forecast at 6.3% in 
2022  driven  by  supply  bottlenecks,  higher  energy  prices  and  disruptions  associated  with  the  war  in 
Ukraine (see also box 2.1).  

This in-depth review presents the main findings of the assessment of imbalances. The assessment is 
backed  by  a  thematic  section  on  corporate  debt  developments.  Spillovers  and  systemic  cross-border 
implications of imbalances are also taken into account. In addition, assessments of structural issues made 
in  previous  IDRs  and  in  the  context  of  fiscal  assessments  are  also  considered  if  relevant.  The  MIP 
assessment matrix is published in the 2022 Country Report for Spain. (4) 

(1)  European Commission (2021), European Semester Spring Package 2021, COM(2021) 500 final. 
(2)  European Commission (2021), Alert Mechanism Report 2022, COM (2021) 741 final. 
(3)  Forecast data are from European Commission (2022), European Economic Forecast: Spring 2022, Institutional Paper 172. 
(4)  European Commission (2022), Country Report Spain 2022, SWD(2022)610 final. 

3 

 
 
                                                           
2.  ASSESSMENT OF MACROECONOMIC IMBALANCES 

Assessment of gravity, evolution and prospects of macroeconomic imbalances 

Spain’s  net  international  investment  position  (NIIP)  continued  to  improve  after  a  temporary 
reversal  during  the  COVID-19  crisis,  yet  it  remains  at  fairly  negative  levels.  The  net  international 
investment position improved since its trough of -98% of GDP in 2009, to -75% at the end of 2019. Due 
to the COVID-19 pandemic, it temporarily  dropped, to -84.9% in 2020. The NIIP improved strongly in 
2021  to  -70%,  to  reach  its  highest  value  since  2005  although  it  remains  beyond  prudential  and 
fundamental  benchmarks.  Against  this  backdrop,  the  composition  of  Spain’s  external  liabilities  helps 
mitigating some of the vulnerabilities. A large part of external debt is composed of government debt and 
central  bank  debt  (largely  Target2  liabilities)  stemming  from  monetary  operations  of  the  Eurosystem, 
which  entails  a  considerably  lower  refinancing  risk  than  that  of  the  debt  held  by  the  private  sector. 
Moreover,  the  NIIP  excluding  non-defaultable  instruments  (NENDI),  accounting  for  the  riskiest 
categories of external liabilities, stood at -40% of GDP in 2021. The improvement of the NENDI (37 pps) 
between 2011 and 2019, during which it surpassed the NIIP prudential threshold, has been faster than that 
of  the  NIIP  (24  pps).  This  reflects  refinancing  towards  net  foreign  direct  investment  (FDI),  which 
contributes to reducing the overall degree of vulnerability. 

Graph 2.1:  Decomposition of Net International Investment Position (NIIP) by sector, Spain 

Source: Eurostat 

Spain’s current account surplus is forecast to return to its pre-pandemic levels and reach 1.8% of 
GDP  in  2022  and  2.1%  in  2023.  The  sharp  contraction  of  GDP  and  heavy  dependence  on  tourism 
deteriorated  the  current  account  balance  throughout  the  pandemic  crisis,  albeit  remaining  in  positive 
territory,  dropping  from  2.1%  in  2019  to  0.8%  in  2020  and  0.9%  in  2021. The  revenue  share  accruing 
from tourism is expected to bounce back over the next years on the back of the gradual normalization of 
international  travel,  although  new  disruptions  on  the  horizon  (notably,  the  fallout  from  the  Russian 
invasion  of  Ukraine)  risk  to  delay  further  the  return  to  pre-crisis  levels  of  tourism  inflows.  The 
dependence  of  Spain  on  imports  from  Russia  is  limited  though  (see  box  2.1).  Overall,  the  adjustment 
perspectives  appear  favourable.  The  current  account  balance  required  to  stabilise  the  NIIP  above  the 
threshold  of  -35%  over  the  next  20  years  is  estimated  at  -0.8%  of  GDP.  The  current  account  norm 
explained  by  fundamentals  is  estimated  to  be  1.2%,  compared  to  a  cyclically  adjusted  current  account 
balance estimated at -0.9% in 2021. 

4 

-400-300-200-100010020030014Q315Q316Q317Q318Q319Q320Q321Q3Assets & liabilities, % of GDPAssets, Central Bank (incl reserves)Liabilities, Central Bank (incl reserves)Assets, General GovernmentLiabilities, General GovernmentAssets, MFI (excl central bank)Liabilities, MFI (excl central bank)Assets, Private sectorLiabilities, Private sectorNet int'l investment position (NIIP) 
   
2. Assessment of macroeconomic imbalances 

The Spanish economy is expected to regain cost competitiveness within the forecast horizon. After a 
decade declining (by -8.0% between 2009 and 2018), real unit labour costs (ULC) picked up by 1.6% in 
2019,  driven  by  the  strong  increase  of  the  statutory  minimum  wage  by  22.3%  and  losses  in  real 
productivity. As in all EU countries, the change in real ULCs in 2020 (+3.8%) is difficult to interpret, as 
the  job  retention  schemes  put  in  place  by  national  governments  during  the  COVID-19  pandemic 
manifests in a deterioration in productivity figures. Following a slight reduction in 2021 (-1.4%) –– real 
ULC are expected to return to their 2019 level over the forecast horizon with further decreases in 2022 
and 2023, under the assumption of a limited transmission of inflationary pressures to wages. 

Private  sector  deleveraging  needs  remain  for  both  corporations  and  households,  despite  a 
significant reduction of debt since 2009.  On the back of positive GDP growth up until the end of 2019, 
the  stock  of  private  debt  was  on  a  declining  trend  since  its  peak  of  204%  of  GDP  in  2009.  Due  to  the 
COVID-19  pandemic  and  the  associated  drop  in  tourism  and  the  implementation  of  diverse  support 
measures aimed at mitigating its impact, the private debt ratio reached 146% of GDP in 2020, up by 18 
pps compared to 2019. The corporate debt ratio registered a more pronounced increase than the household 
debt ratio (12% of GDP vs 6%). Risks persist that the phase-out of state-support measures and potential 
second-round effects on economic growth  from Russia’s  unprovoked invasion of Ukraine could lead to 
further vulnerabilities associated to private sector debt. 

Private  debt  deleveraging  is  expected  to  resume  with  a  pick-up  in  economic  activity.  In  the  last 
quarter  of  2021,  the  consolidated  debt  of  non-financial  corporations’  (NFCs)  amounted  to  80%,  while 
household  debt  totalled  58%  of  GDP.  Debt  ratios  for  both  corporates  and  households  remain  above 
prudential levels and fundamental benchmarks according to Commission estimates. Moreover, excessive 
corporate  indebtedness  emerging  from  the  COVID-19  crisis  could  have  adverse  consequences  for  a 
steady recovery, especially for those firms operating in sectors considerably hit by the economic fallout of 
the pandemic, including also tourism (see section 3 on private indebtedness). Whilst the borrower relief 
measures  and  the  public  guarantee  schemes  implemented  during  the  crisis  by  the  authorities  have 
prevented further financial distress to borrowers and corporates and mitigated the impact of the pandemic 
on  banks’  balance  sheets  by  safeguarding  asset  quality,  uncertainty  remains  about  the  impact  of  their 
phasing  out  on  the  economy.  Nevertheless,  the  close  monitoring  of  asset  quality  developments  remains 
warranted, as the rising pockets of vulnerabilities could be a source of credit deterioration in the future. 
Household  debt  is  expected  to  recover  to  pre-crisis  levels  by  2022  and  is  likely  to  resume  its  gradual 
decline that was underway since 2010. 

5 

Graph 2.2:  Decomposition of debt by sector (consolidated) 

2. Assessment of macroeconomic imbalances 

Source: Eurostat 

General  government  debt  resumed  its  downward  path,  after  a  temporary  increase  in  2020.  The 
general  government  debt  to  GDP  ratio  was  on  a  declining  trend  until  2019,  standing  at  98.3%  of  GDP 
from 105.1% of GDP in 2014. After peaking at 120% of GDP in 2020, due to the economic contraction 
and the deployment of government support measures associated to the COVID-19 crisis, it slightly eased 
to 118.4% of GDP in 2021. The general government debt to GDP ratio is forecast to decline to 115.1% in 
2022 and 113.7% in 2023.   

According  to  the  Commission’s  fiscal  sustainability  assessment,  Spain  faces  high  fiscal 
sustainability challenges over the medium term and medium challenges over the long term. The debt 
sustainability analysis shows that government debt is projected to remain at a high level in the baseline 
scenario. This debt path is sensitive to possible shocks to fiscal, macroeconomic and financial variables, 
as  illustrated  by  alternative  scenarios  and  stochastic  simulations,  most  pointing  to  high  risks.  Over  the 
long  term,  Spain  faces  medium  sustainability  risks.  To  stabilise  debt  over  the  long  term,  it  will  be 
necessary to address the unfavourable initial budgetary position and future budgetary pressures stemming 
from population ageing related to health care and long-term care expenditure. The relinking of pensions 
to  inflation  may  pose  further  challenges  to  the  long-term  sustainability,  which  are  expected  to  be  only 
partially offset by measures encouraging longer working lives, contained in the Plan. The introduction of 
additional offsetting measures to be implemented in 2022 is needed to mitigate the remaining risks. 

The main headwinds ahead affecting public debt developments are related to the return of market 
interest rates to higher levels coupled with additional inflationary pressure. Given long-term average 
maturities, an increase in average funding costs, currently at historically low levels, would take a number 
of years to result in significant increases in the interest burden. High inflation, while potentially leading to 
a  depreciation  of  borrowers’  stock  of  debt  and  to  higher  government  tax  revenues  could  also  result  in 
expenditure pressure. The investor base of Spanish bonds remains broad and diversified. However, Spain 
would need to establish a credible consolidation path in order to bring down its structural deficit in the 
medium-term  and  anchor  expectations  of  future  fiscal  developments.  Based  on  data  from  the  Treasury, 
owing to the projected decline in net issuance in 2022, total gross financing needs are expected to decline 
to EUR 237 billion (around 18.2% of GDP) in 2022, that is 10% and 31% lower than in 2021 and 2020, 
respectively.  

Despite  decreasing  rapidly  in  2021,  the  unemployment  rate  remains  high,  particularly  among  the 
young.  The  outbreak  of  the  pandemic  at  the  beginning  of  2020  halted  seven  years  of  decline  of  the 

6 

0501001502002503003500809101112131415161718192021% of GDPNon financial corporationsHouseholdGovernmentPrivate sectorPrivate sector EU28MIP Threshold    
2. Assessment of macroeconomic imbalances 

unemployment rate (from 26.1% in 2013 to 14.1% in 2019). The unemployment rate jumped up by 3 pps. 
in  the  first  six  months  of  the  crisis,  with  job  losses  mostly  affecting  workers  on  temporary  contracts. 
Following  the  initial  shock,  the  extension  of  the  short-time  work  schemes  (ERTEs)  deployed  at  the 
beginning  of  the  pandemic,  coupled  with  a  gradual  job-rich  recovery  of  the  economy,  allowed  a  fast-
paced recovery of the labour market. The unemployment rate fell to 13.6% in the fourth quarter of 2021, 
the lowest rate in 13 years. However, this is still among the highest in the EU and particularly related to 
young  workers  under  25  (31.4%).  Moreover,  the  long-term  unemployment  rate  remains  above  pre-
pandemic levels. The annual unemployment rate is forecast to decline from 14.8% in 2021 to 13.4% in 
2022 and 13.0% in 2023. 

Strong labour market segmentation is a particular vulnerability of the Spanish economy. In 2021, 
25.1%  of  employees  in  Spain  worked  on  a  temporary  contract,  among  the  highest  rates  in  the  EU. 
Widespread use of temporary contracts affects the public sector (30.9%) even more extensively than the 
private  one  (23.6%).  In  addition,  the  rate  of  involuntary  part-time  workers  is  twice  as  big  as  the  EU 
average.  The  large  pool  of  vulnerable  workers  in  the  Spanish  labour  market  makes  it  sensitive  to 
exogenous shocks and undermines accumulation of human capital, thereby having a negative impact on 
productivity. The correction of this challenge would increase labour market resilience and would lift the 
potential output of the economy. 

Assessment of MIP relevant policies 

Since 2021, Spain deployed a number of policy initiatives in order to cushion its immediate impact 
on  the  economy  and  mitigate  its  medium-term  implications.  Those  measures  included  actions 
undertaken  at  the  national  level  in  response  to  the  COVID-19  crisis,  as  well  as  of  the  broader  strategy 
designed  at  the  EU  level  under  the  Recovery  and  Resilience  Facility  (RRF),  together  with  Cohesion 
Policy Funds. Significant policy progress  – both within and outside of the framework of the Plan  – was 
initiated  across  a  number  of  areas,  including  accelerating  the  deleveraging  process  in  the  private  sector 
and favouring a reduction of the high level of unemployment.  

The comprehensive nature of the Spanish Recovery and Resilience Plan (RRP) constitutes a unique 
opportunity to foster policy progress in the areas affected by macroeconomic imbalances. The wide-
ranging reforms and investments contained in the Plan cover all the major vulnerabilities depicted across 
diverse policy fields, making the RRP a pivotal tool contributing to a faster reduction of the imbalances. 
Interventions  in  the  areas  of  public  and  private  finances,  business  productivity  and  labour  market  are 
particularly relevant. 

A  number  of  measures  may  help  to  address  the  high  levels  of  private  and  external  debt,  also  by 
increasing  the  competitiveness  of  the  business  sector.  SMEs  will  benefit  from  improved  access  to 
finance in form of guarantees via the ‘Compañia Española de Reafianzamiento’ (CERSA). CERSA will 
allow access to long-term financing and working capital helping to reduce debt overhang on businesses. 
The guarantees will be granted to SMEs by end-2023. The Plan also includes a set of actions, expected to 
enter into force in the second quarter of 2022, intended to facilitate preventive debt restructuring and debt 
relief  for  natural  persons,  with  the  goal  of  preventing  insolvency  situations  and  facilitate  resource 
reallocation.  Reforms  and  investments  favouring  renewable  energy  and  energy  efficiency  can  reduce 
dependency on energy imports and contribute to reducing external debt. 

A gradual consolidation of public  finances and the broadening of the tax base could help address 
Spain’s  structural  deficits.  In  this  sense,  the  RRP  promotes  further  rounds  of  spending  reviews  to 
increase the share of public revenues, while, with the aim of establishing a more efficient tax system, a 
package  of  measures,  including  combating  tax  fraud  and  a  wide-ranging  tax  reform  is  underway  and 
expected to be approved by beginning of next year. Furthermore, by year-end, the National Procurement 
Strategy designed to improve the efficiency and sustainability of public procurement, is scheduled to be 
adopted. The relinking of pensions to inflation poses additional risks to the long-term fiscal sustainability, 
unless the offsetting measures foreseen by the Plan and to be introduced in 2022 are forceful enough to 
mitigate these risks. 

The  successful  implementation  of  the  ongoing  labour  market  reforms  envisaged  in  the  RRP  is 
expected to contribute to a more efficient functioning of the labour market. The extension in scope 

7 

2. Assessment of macroeconomic imbalances 

and size of short-time work schemes (‘ERTEs’) during the pandemic strongly mitigated the effects of the 
COVID-19  crisis  on  the  labour  market  and  bolstered  a  faster  recovery.    Building  on  this  favourable 
experience,  to  support  firms  and  workers  in  transition,  the  Government  has  created  the  RED 
mechanism (5),  which  became  operational  in  April  2022.  Although  some  of  its  aspects  still  need  to  be 
further  specified,  the  new  mechanism  is  expected  to  reduce  structural  unemployment  and  improve  the 
adjustment process of the economy. Additionally, another reform approved in December 2021 under the 
RRP  aims  at  reducing  the  use  of  temporary  contracts  in  order  to  generalise  the  use  of  open-ended 
contracts (6). This measure is set to favour the correction of labour market duality, which is also key to 
boost labour productivity in the medium to long term. It should also lead to an increase in social cohesion 
and to a reduction of at-risk-of-poverty rates. 

High  regulatory  fragmentation  and  low  innovation  capacity  of  firms  and  regions  continue  to 
adversely affect growth and productivity. Boosting productivity is essential for SMEs, which make up 
a large share of businesses in Spain compared to other large EU Member States. In this regard, despite the 
fact  that  RRP  foresees  some  measures  expected  to  positively  affect  the  development  of  an  industry-
services  ecosystem  and  to  boost  entrepreneurship,  an  additional  effort  to  improve  the  business 
environment,  reduce  regulatory  barriers  and  facilitate  the  growth  of  businesses  could  greatly  increase 
their competitiveness in domestic and foreign markets. 

Conclusion 

Spain  is  facing  vulnerabilities  relating  to  high  external  and  internal  debt,  both  government  and 
private, in a context of high unemployment, and which have cross-border relevance. After the initial 
shock caused by the COVID-19 pandemic, in 2021 external and private debt to GDP ratios resumed their 
gradual  decline  observed  before  the  pandemic,  supported  by  the  rebound  in  GDP  growth.  Private  debt 
ratios are still higher than before the COVID-19 crisis, primarily due to the magnitude of the impact of 
the COVID-19 crisis on Spain. The net international investment position recovered in 2021, and reached 
its highest level since 2005, although more improvement is needed given its size. The current account has 
been in surplus in recent years, though it narrowed in 2020 and 2021. The government debt to GDP ratio 
stood at 118.4% of GDP in 2021, marginally lower than in 2020 but still well above its 2019 level. The 
Spanish financial system remains resilient and asset quality has been preserved during the pandemic. The 
NPL  ratio  for  corporates  decreased  to  4.29%  in  December  2021,  down  from  4.51%  at  the  end  of 
December 2020 (7), according to data from the Spanish Central Bank. Nonetheless, certain risks related to 
the rise of contingent liabilities stemming from the sizable value of public guarantees deployed during the 
COVID-19  crisis  call  for  close  monitoring  in  the  coming  months.  The  unemployment  rate  started  to 
decrease  again  in  2021,  but  labour  market  segmentation  and  youth  unemployment  remain  high.  Going 
forward,  the  stocks  of  internal  and  external  debts  are  expected  to  continue  moderating.  Against  this 
backdrop, the war in Ukraine is expected to lead to a slow-down in economic activity and might pose an 
additional  challenge  to  corporate  sector,  especially  in  energy-intensive  industry,  transport  and 
construction.  Moreover,  consumption  and  investment  decisions  could  be  also  affected  due  to  the 
persisting high levels of energy prices, high inflation and uncertainty about the geopolitical situation. The 
dependence on Russian imports is rather limited, but exposure to increases in energy prices is a pressing 
concern (see box 2.1). Altogether, these developments could affect the ongoing consolidation process and 
delay the further reduction of debt ratios.  

A  number  of  policy  initiatives  have  the  potential  to  accelerate  the  deleveraging  process  in  the 
private and public sector, depending on their effectiveness and speed of their implementation. The 
RRP,  thanks  to  its  cross-cutting  nature  and  scope  has  the  potential  to  provide  significant  impetus  for 
addressing  Spain’s  macroeconomic  vulnerabilities  and  raise  the  competitiveness  of  Spain’s  business 
sector.  The  measures  implemented  so  far,  and  planned  until  2023  include  actions  improving  access  to 
finance  for  SMEs  and  measures  intended  to  facilitate  preventive  debt  restructuring  and  debt  relief  for 

(5)  2)  The RED mechanism is a new employment flexibility and stabilisation mechanism created with the objective to establish a 
permanent scheme to adjust to cyclical and structural shocks, by covering the suspension or reduction of working time through 
an employment regulation plan that includes the requirement to improve or retrain workers in the skills identified as being in 
demand. The scheme has two modalities: one for cyclical macroeconomic shocks, and the other for sectoral transformation.  
(6)  Although it is still early to draw conclusions, initial data point at a declining trend in the use of temporary contracts. Their share 

in the total number of new contracts has decreased from 90% in December 2021 to 52% in April 2022.    

(7)  ) The level of NPLs for the total economy stood at 2.8% at the end of 2020 and increased to 2.9% at the end of 2021 

8 

                                                           
2. Assessment of macroeconomic imbalances 

natural  persons.  The  lower  projected  fiscal  deficit,  coupled  with  measures  aimed  at  improving  the 
efficiency  of  both  the  expenditure  and  revenue  side  are  expected  to  contribute  to  accelerating  the 
downward trajectory of public debt. Strong current account surpluses over the next years will be essential 
to reduce the stock of external liabilities. High regulatory fragmentation and low innovation capacity of 
firms  and  regions  continue  to  adversely  affect  growth  and  productivity.  The  ongoing  labour  market 
reforms  are  expected  to  reduce  segmentation  and  boost  labour  productivity,  notably  by  upskilling  and 
reskilling of the labour force. 

Based  on  the  findings  in  this  in-depth  review,  the  Communication  “European  Semester  –  2022 
Spring  Package” (8)  sets  out  the  Commission’s  assessment  as  to  the  existence  of  imbalances  or 
excessive imbalances in Spain, in line with Regulation 1176/2011. 

(8)  European Commission (2022), European Semester Spring Package 2022, COM(2022)600 final. 

9 

 
 
                                                           
2. Assessment of macroeconomic imbalances 

Box 2.1: 

Exposures to the commodity price surge, and to Russia 

This  box reviews and  summarizes the risks for the macroeconomic vulnerabilities in  Spain 
related to the increase in commodity prices, and the magnitude of exposures to the Russian 
economy.  The  surge  in  commodity  prices  since  2021  has  been  aggravated  by  the  Russian  military 
aggression  against  Ukraine.  Available  data  suggests  that  the  exposure  to  sharp  increase  in  energy 
prices is a  pressing concern, however, the dependence on Russian imports is rather limited. Given 
also  the  moderate  financial  links  to  Russian  entities,  exposure  to  Russia  is  not  expected  to  have  a 
significant impact on the Spanish economy over the medium term. 

 Graph b.1.1: 

Sectoral distribution of energy use and of energy imported from Russia 

Notes: The left panel displays the distribution of primary energy usage in Spain according to Eurostat energy balances. The horizontal axis displays the 
relative importance of energy-consuming sectors. The vertical axis displays the importance of energy importance from Russia in satisfying that need. Note 
that this dependence on Russia differs according to sector’s use of natural gas vs oil and coal. For comparison, the right hand panels displays the same 
concept for the EU aggregate. Russian imports include oil and petroleum products,natural gas and solid fossil fuels. 
Sources: Eurostat and European Commission services calculations 
The  distribution  of  energy  use  by  sector  is  roughly  comparable  to  the  EU  average.  The 
exceptions include transport and especially energy production sectors, for which the share of energy 
consumption  in  Spain  is  slightly  higher  than  in  the  EU  (Graph  b.1.1).  Overall,  the  reliance  across 
different sectors to energy  imports from Russia is limited, including on imports of  natural gas (see 
Table  b.1.1).  Therefore,  the  current  energy  crisis  is  affecting  the  economy  chiefly  through  price 
increases, while to a much lesser extent it is due to potential supply disruptions.  

Graph b.1.2: 

Spain goods and service trade balance – fossil trade contribution 

Notes: The graph displays the trade balance as % of GDP, and highlights net trade of petroleum products, natural gas and solid fossil fuels (mainly coal), in 
2015 import prices. The ‘fossil price impact’ component details the impact of price changes on the (also changing) real trade balance. 2022 and 2023 figures 
reflect central assumptions of the Commission spring forecast, notably combining the forecasted fossil price evolution with broadly forecasted import 
quantities of fossil energy sources. 
The fuel price surge is likely to have a  strong  impact  on  the trade balance.  The commodity 
price increase is expected to depress the trade balance by around 4 pp. of GDP in 2022 (see Graph 
b.1.2). Nonetheless, the current account is likely to remain in surplus. 

Spain’s  financial  links  to  Russian  entities  are  moderate  and  do  not  represent  a  source  of 
concern.  Table  b.1.1  shows  that  FDI,  portfolio  and  other  investment  assets  held  in  and  towards 
Russia are well below the EU  average. Exposures to Russian commodities are also limited and the 
imports  of  gas  and  oil  from  Russia  take  place  on  a  smaller  scale.  In  terms  of  energy  mix,  Spain  is 
planning to phase out the use of coal and limit the scale of nuclear sources in power generation, with 
renewable energy largely filling the gap. While oil will continue to play a role in the Spanish energy 

10 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2. Assessment of macroeconomic imbalances 

mix for the next decade, a drop of the gas share is envisaged by 2030. On the other hand, the tourism 
sector can be affected more prominently as the share  of Russian tourists was not negligible, even if 
still below the EU average.  

Table b.1.1:  

Selected exposures 

Data sources: Eurostat for commodity exposures, European Commission Figaro for value-added exposures, BIS for consolidated banking exposures, 
European Commission FinFlows for other financial exposures. Energy gross inland consumption excludes net imports of electricity and derived heat. 

11 

Trade & financial exposuresunitESEUEnergy mixunitESEUDomestic value added embodied in exports to Russia% of GDP0.3%0.4%Solids fossil fuels (incl. peat)% of gross inland consumption 20202.8%10.8%Non-energy Russian import content in final demand% of GDP0.2%0.4%Oil and petroleum products% of gross inland consumption 202041.0%32.7%Russian tourist nights spent% of total 20192.0%2.7%Natural gas% of gross inland consumption 202025.0%24.4%FDI assets held in Russia% of 2020 GDP0.1%2.5%Renewables and waste% of gross inland consumption 202017.6%19.0%Portfolio & other inv. assets held in Russia% of 2020 GDP0.1%0.9%Nuclear% of gross inland consumption 202013.6%13.1%FDI liabilities towards Russia% of 2020 GDP0.3%1.2%Commodity exposuresunitESEUPortfolio & other inv. liabilities towards Russia% of 2020 GDP0.2%1.1%Net petroleum imports from all countries% of GDP 20211.4%1.2%Consolidated banking exposures towards Russia% of 2021 GDP0.1%0.5%Crude oil imports from Russia '20% of oil imports1.8%25.7%Net gas imports from all countries% of GDP 20210.7%0.6%Gas imports from Russia '20% of gas imports10.4%43.6% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table 2.1: 

Selected economic and financial indicators (Part 1), Spain 

2. Assessment of macroeconomic imbalances 

(e) estimate based on ECB quarterly data 
(1) Potential output is the highest level of production that an economy can reach without generating inflationary pressures. 
The methodology to compute the potential output is based on K. Havik, K. Mc Morrow, F. Orlandi, C. Planas, R. Raciborski, W. 
Roeger, A. Rossi, A. Thum-Thysen, V. Vandermeulen, The Production Function Methodology for Calculating Potential Growth 
Rates & Output Gaps, COM, European Economy, Economic Papers 535, November 2014. 
(2) Deviation of actual output from potential output as % of potential GDP. 
(3) Current accounts in line with fundamentals ("current account norms") are derived from reduced-form regressions 
capturing the main determinants of the saving-investment balance, including fundamental determinants, policy factors and 
global financial conditions. See L. Coutinho et al. (2018), "Methodologies for the assessment of current account benchmarks", 
European Economy, Discussion Paper 86/2018, for details.  
(4) This benchmark is defined as the average current account required to reach and stabilise the NIIP at -35% of GDP over the 
next 20 years. Calculations make use of Commission’s T+10 projections. 
(5) NENDI is a subset of the NIIP that abstracts from its pure equity-related components, i.e. foreign direct investment (FDI) 
equity and equity shares, and from intracompany cross-border FDI debt, and represents the NIIP excluding instruments that 
cannot be subject to default. 
(6) Fundamentals-based benchmarks are derived from regressions capturing the main determinants of credit growth and 
taking into account a given initial stock of debt. Prudential thresholds represent the debt threshold beyond which the 
probability of a banking crisis is relatively high, minimising the probability of missed crisis and that of false alerts. Methodology 
to compute the fundamentals-based and the prudential benchmarks based on Bricongne, J. C., Coutinho, L., Turrini, A., 
Zeugner, S. (2019), “Is Private Debt Excessive?”, Open Economies Review, 1- 42. 
Source: Eurostat and ECB as of 2022-05-02, where available; European Commission for forecast figures (Spring forecast 2022) 

12 

all variables y-o-y % change, unless otherwise stated2003-072008-122013-17201820192020202120222023Real GDP 3.5-1.31.92.32.1-10.85.14.03.4Potential growth  (1)3.61.20.20.81.00.20.51.21.3Contribution to GDP growth:Domestic demand 4.7-3.01.42.61.8-8.24.12.03.4Inventories 0.0-0.20.20.3-0.2-0.50.50.00.0Net exports -1.21.80.3-0.60.5-2.20.52.00.0Contribution to potential GDP growth (1):Total Labour (hours) 1.70.1-0.20.20.50.10.10.60.5Capital accumulation 1.70.70.20.40.50.30.30.50.6Total factor productivity 0.20.40.20.10.0-0.10.00.10.2Output gap (2)3.4-4.3-5.21.02.1-9.1-4.9-2.2-0.2Unemployment rate9.719.121.915.314.115.514.813.413.0Harmonised index of consumer prices (HICP)3.22.30.51.70.8-0.33.06.31.8GDP deflator 3.80.50.51.21.31.12.23.72.4External positionCurrent account balance (% of GDP), balance of payments-7.0-3.92.31.92.10.80.91.82.1Trade balance (% of GDP), balance of payments-4.4-0.93.52.72.91.51.5..Primary income balance (% of GDP)-1.5-1.7-0.20.10.20.60.5..Secondary income balance (% of GDP)-1.1-1.3-1.0-1.0-1.0-1.2-1.1..Current account explained by fundamentals (CA norm, % of GDP) (3)-1.9-0.70.61.21.31.31.21.41.6Required current account to stabilise NIIP above -35% of GDP over 20Y (% of GDP) (4)-0.31.60.0-0.1-0.2-0.3-0.8-0.8-0.6Capital account balance (% of GDP)0.60.40.40.50.30.40.9..Net international investment position (% of GDP)-66.5-91.3-89.7-80.1-75.0-84.9-70.0..NENDI - NIIP excluding non-defaultable instruments (% of GDP) (5)-35.6-71.8-64.7-52.7-46.8-52.4-40.0..Net FDI flows (% of GDP)3.30.11.0-1.40.51.7-0.8..CompetitivenessUnit labour costs (ULC, whole economy)3.40.4-0.31.53.06.10.22.11.2Nominal compensation per employee 2.92.00.41.62.3-1.42.93.33.5Labour productivity (real, hours worked)0.51.70.8-0.20.2-0.3-1.80.51.7Real effective exchange rate (ULC)2.4-1.7-0.91.2-0.1....Real effective exchange rate (HICP)1.2-0.5-0.22.0-1.60.70.7..Export performance vs. advanced countries (% change over 5 years)8.6-4.4-1.42.00.8-6.4...Private sector debtPrivate sector debt, consolidated (% of GDP)158.6198.3157.7132.7128.6146.5138.3..Household debt, consolidated (% of GDP)70.183.269.059.056.962.458.4..Household  debt, fundamental benchmark (% of GDP) (6)35.546.547.843.442.848.546.6..Household  debt, prudential threshold (% of GDP) (6)49.142.038.841.141.840.840.8..Non-financial corporate debt, consolidated (% of GDP)88.5115.188.773.771.784.179.8..Corporate debt, fundamental benchmark (% of GDP) (6)39.849.055.352.551.958.656.6..Corporate debt, prudential threshold (% of GDP) (6)60.357.355.057.057.557.457.4..Private credit flow, consolidated (% of GDP) 25.3-0.7-3.80.01.14.42.4..Corporations, net lending (+) or net borrowing (-) (% of GDP)-3.45.96.65.03.76.17.27.27.3Households, net lending (+) or net borrowing (-) (% of GDP)-3.9-0.21.2-0.11.76.11.60.50.3Net savings rate of households (% of net disposable income)3.94.62.81.44.210.8...forecast 
 
   
 
Table 2.2: 

Selected economic and financial indicators (Part 2), Spain 

2. Assessment of macroeconomic imbalances 

(7) Unweighted average of price-to-income, price-to-rent and model valuation gaps. The model valuation gap is estimated 
in a cointegration framework using a system of five fundamental variables; total population, real housing stock, real 
disposable income per capita, real long-term interest rate and price deflator of final consumption expenditure, based on 
Philiponnet, N., Turrini, A. (2017), "Assessing House Price Developments in the EU," European Economy - Discussion Papers 2015 - 
048, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission. Price-to-income and price-to-
rent gaps are measured as the deviation to the long term average (from 1995 to the latest available year). 
(8) Price-to-income overvaluation gap measured as the deviation to the long term average (from 1995 to the latest available 
year). 
(9) Domestic banking groups and stand-alone banks, EU and non-EU foreign-controlled subsidiaries and EU and non-EU 
foreign-controlled branches. 
Source: Eurostat and ECB as of 2022-05-02, where available; European Commission for forecast figures (Spring forecast 2022) 

13 

all variables y-o-y % change unless otherwise stated2003-072008-122013-17201820192020202120222023Housing marketHouse price index, nominal14.2-6.61.06.75.22.23.7..House price index, deflated10.4-8.20.45.24.12.21.7..Overvaluation gap (%) (7)21.114.9-9.02.95.58.511.8..Price-to-income overvaluation gap  (%) (8)18.618.1-7.10.11.19.310.3..Residential investment (% of GDP)11.16.94.35.45.96.05.4..Government debtGeneral government balance (% of GDP)1.0-9.3-5.3-2.6-3.1-10.3-6.9-4.9-4.4General government gross debt (% of GDP)42.162.7102.7100.598.3120.0118.4115.1113.7Banking sectorReturn on equity (%).1.16.18.36.8-3.6...Common Equity Tier 1 ratio.9.412.413.513.814.7...Gross non-performing debt (% of total debt instruments and total loans and advances) (9).4.45.73.22.72.5...Gross non-performing loans (% of gross loans) (9)..6.13.73.12.82.9..Cost of borrowing for corporations (%)4.13.62.41.71.51.51.3..Cost of borrowing for households for house purchase (%)4.03.42.22.01.71.51.4..forecast 
   
 
3.  THEMATIC CHAPTER: PRIVATE INDEBTEDNESS 

Non-financial corporate debt increased with the COVID-19 crisis, also because of the importance of 
the  tourism  for  Spain  and  therefore  warrants  a  more  detailed  analysis  this  year.  Following  the 
outbreak  of  the  COVID-19  pandemic  and  the  implementation  of  diverse  support  measures  aimed  at 
mitigating  its  impact,  the  private  sector  debt  ratio  accelerated  in  Spain.  The  private  debt  to  GDP  ratio 
increased  during  the  crisis,  to  146.5%  in  the  last  quarter  of  2020.  This  increase  reverted  the  declining 
trend  observed  from  2010  to  2019  and  was  steered  by  the  increase  of  corporate  indebtedness  and,  to  a 
larger  extent,  by  the  sizeable  fall  in  GDP  experienced  by  Spain  since  the  beginning  of  the  pandemic. 
From the second quarter of last year, private indebtedness returned to a gradual downward path, reflecting 
the pick-up in economic activity since spring 2021.  

Corporate indebtedness reached 84% of GDP in 2020, up by more than 12 pps compared to 2019, 
with sharper increase in tourism-related and communication sectors. The debt to GDP ratio for non-
financial corporates level stood 27 pps above the prudential threshold and 26 pps above the fundamental 
benchmark in 2021, respectively (Graph 3.1). The household debt to GDP ratio stood 22 pps above the 
prudential threshold and 14 pps above the fundamental benchmark in 2021, respectively. 

Graph 3.1: 

Thematic Graphs: Private debt 

Source: European Commission services 

NFC  credit  flows  increased strongly with  the  COVID-19  crisis.  NFC  credit  increased  from  1.1%  of 
GDP in 2019 to 4.8% in 2020. The ratio remained elevated in 2021, at 2.4%. Net corporate credit flows 
increased  in  light  of  marked  revenue  losses  and  perceived  liquidity  shortages  in  2020,  which  also 
contributed  to  a  strong  increase  in  corporate  deposit  holdings.  Credit  standards  for  lending  to  non-
financial  corporations  tightened  moderately  in  the  last  quarter  2021  and  further  in  the  first  quarter  of 
2022,  mainly  reflecting  banks’  higher  risk  perception  and  lower  risk  tolerance.  Going  forward,  in  the 
second  quarter  of  2022,  credit  standards  are  set  to  continue  tightening,  while  demand  for  new  loans  is 
expected to decrease. 

Vulnerabilities in the corporate sector remain and may only become visible with some delay after 
the  COVID-19  crisis.  According  to  balance  sheet  data  on  loan  stocks  from  the  European  Banking 
Authority, at the end of 2020 bankruptcies in the accommodation and food sector were about 2.5 times 
higher than in 2015, and they started to decline only moderately from early 2021 onwards (Graphs 3.2.d). 
Bankruptcies  in  wholesale  and  industry  also  increased,  but  more  moderately.  In  contrast,  new  business 
registrations dropped sharply  at the beginning of the pandemic but returned quickly  thereafter to levels 
comparable  to  before  the  crisis,  with  little  differences  across  sectors.  The  share  of  corporate  non-

14 

020406080100120140040608101214161820% GDP(a) Fundamental-based and prudential benchmark and NFC debtNFC debt, consolidated,  % of GDPFundamentals-based benchmark, % of GDPPrudential benchmark, % of GDP0.010.020.030.040.050.060.070.080.090.0990103050709111315171921%GDP(b) Fundamental-based and prudential benchmarks and HH debtHousehold debt, %GDPFundamentals-based benchmark, household debtPrudential benchmark, household debt 
  
3. Thematic chapter: Private Indebtedness 

performing loans for the corporate sector as a share of total loans and advances was on a downward path 
until the beginning of the COVID-19 crisis, a trend that was not significantly affected by the outbreak of 
the pandemic. According to data from the Spanish Central Bank, NPL ratio for corporates stood at 4.51% 
in end-December 2020, before declining to 4.29% in December 2021. 

The economic fallout from the pandemic and the subsequent recovery significantly differed across 
sectors. Real gross value added in trade, tourism and transport registered a y-o-y drop of roughly 50% in 
the  second  quarter  of  2020.  Gross  value  added  in  the  manufacturing  industry  and  construction  also 
dropped markedly (around 25%), yet displaying an uneven recovery profile afterwards. While at the end 
of 2021 the industrial output was only 3% below its level in Q4-2019, the gap in construction was still 
14% (Graph 3.2.a).  

Fixed investment  in equipment recovered, but investment in construction is lagging behind. Fixed 
investment  in  equipment  is  already  above  its  pre-crisis  levels.  Some  statistical  issues  seem  to  have 
amplified  the  poor  performance  of  the  construction  sector  in  2020-2021,  due  to  the  way  in  which  the 
execution  of  a  construction  project  is  distributed  over  time  in  the  national  accounts.  Uncertainty, 
reflecting the lingering pandemic, continues to be the biggest constraint to investment reported by SMEs 
and services in Spain, according to the EIB investment report. (19) 

Excessive corporate indebtedness could  hamper  investment  and  business growth in the upcoming 
future,  affecting  particularly  those  corporates  particularly  stressed  by  the  economic  fallout  of 
pandemic. Particularly, as the public support measures are expected to be gradually phased out from the 
end of the first quarter of 2022, a number of businesses might encounter difficulties repaying the principal 
component of the government-guaranteed loans taken, leading to those loans being classified as stage 2 
loans and thereby potentially  facing insolvency  situation.  Given the  sizeable value of public guarantees 
granted  to  the  corporate  sector  during  the  COVID-19  crisis,  the  risk  related  to  the  rise  of  contingent 
liabilities in the coming months warrant close monitoring. 

Tourism sector 

Tourism  continues  to  represent  a  highly  relevant  economic  activity  in  Spain.  The  sector  of 
accommodation and food service activities accounted for 6.4% of total gross value added (GVA) in 2019, 
compared to 2.9% on average in the EU. Spain’s tourism sector is characterized by a strong international 
dimension,  with  cross-border  tourists  accounting  for  more  than  60%  of  the  nights  spent  in  touristic 
accommodation establishments in 2019.  

Spain’s  tourism  industry  was  heavily  affected  at  the  onset  of  the  COVID-19  pandemic,  before 
moderately  recovering  in  2021.  After  the  outbreak  of  the  crisis  and  the  introduction  of  strict 
containment measures, tourism collapsed quickly. Throughout 2020, the gross value added generated by 
the  tourism  industry  dropped  to  3.5%  of  total  GVA  in  2020,  while  in  nominal  terms,  firms’  profits 
dropped  by  as  much  as  50%  in  2020,  according  to  Eurostat  data.  Sectoral  employment  has  been  more 
stable, at 90% of 2019 level in the fourth quarter of 2021, only slightly less than for the EU as a whole. 
The  mild  decrease  reflects  to  a  large  extent  the  effective  deployment  of  short-time  work  schemes  to 
mitigate  the crisis impact on  the  labour  market. In 2021, the  tourism sector recovered from some of  its 
losses, showing a turning point in May with the end of the state of emergency, the reinstatement of free 
movements  across  the  country  and  softer  restrictions  affecting  the  catering  industry.  Tourism  activity 
recovered more dynamically from mid-2021 onwards, with nights spent reaching 83% of their 2019 level 
in  October  2021  (Graph  3.2.f),  with  domestic  tourism  registering  a  swifter  recovery  than  international 
tourism. 

Vulnerabilities in the tourism sector have increased during the pandemic. Corporate debt seemed to 
have increased more in the accommodation and food sector than in other areas, according to balance sheet 
data on loan stocks from the European Banking Authority (Graph 3.2.c). Moreover, bankruptcies in those 
industries almost tripled in 2020, whereas  new business registrations dropped only temporarily  in early 
2020  (Graph  3.2.d  and  3.2.e).  The  NPL  ratio  in  the  tourism  sector  stayed  relative  stable  due  to  loan 
moratoria introduced in response to the COVID-19 crisis, but started to increase lately, from 4.7% in the 

(19)  EIB (2022), EIB Investment Survey 2021 - Spain Overview, European Investment Bank, Luxembourg. 

15 

                                                           
3. Thematic chapter: Private Indebtedness 

fourth quarter of 2019 to 5.4% in the fourth quarter of 2021, according to the European banking authority. 
Overall,  this  points  to  increasing  difficulties  of  tourism  establishments  to  overcome  the  cumulative 
effective of the COVID-19 pandemic. 

Developments  in  the  tourism  sector  in  the  near  future  are  likely  to  remain  volatile  and  highly 
dependent on the full normalisation of international travel.  As the containment measures put in place 
during  the  pandemic  period  have  gradually  been  eased,  the  tourism  activity  and  the  revenue  share 
accruing  from  the  tourism  and  accommodation  industry  is  expected  to  bounce  back.  Nonetheless,  new 
disruptions,  including  the  fallout  from  the  war  in  Ukraine,  risk  delaying  further  the  return  to  pre-crisis 
levels of tourism inflows and can expose the sector to additional vulnerabilities.  A new  shock could be 
detrimental for firms that have been sailing into headwind for the last two years. In this context, the newly 
created  RED  mechanism  is  expected  to  support  job  preservation  and  facilitate  job  reallocation  to  other 
sectors from the most affected ones, including tourism.  

Policy measures supporting corporates  

The  Spanish  authorities  have  implemented  several  measures  aimed  at  minimising  the  negative 
impact of the pandemic on corporates, which also helps to limit debt vulnerabilities (20). Between the 
first quarter of 2020 and the July 2021 a sizeable package of cross-cutting legislative acts and financial 
aid  schemes  provided  stimulus  to  the  economy,  supporting  borrowers  and  corporates  and  particularly 
targeting  small  and  medium  size  enterprises  (SMEs)  and  self-employed  workers.  The  key  measures 
included  a  deferral  of  tax  payments  for  SMEs  and  a  more  flexible  use  of  short-time  work  schemes 
(ERTEs), including reduced social security contributions for firms.  

To further support the business sector, two guarantee programs were approved at the onset of the 
pandemic  by  the  government.  Thereby  the  State  guaranteed  the  financing  provided  by  financial 
institutions  to  companies  and  self-employed.  EUR  100  billion  guarantees  were  envisaged  to  facilitate 
access  to  credit  and  liquidity  for  companies  and  the  self-employed  to  cope  with  the  impact  of  the 
pandemic and EUR 40 billion were approved to cover investment needs. These programs are managed by 
the public development bank (Instituto de Crédito Oficial, ICO).  In addition the authorities approved a 
solvency support fund worth €10 billion to provide capital support to enterprises. Furthermore, a series of 
legislative and non-legislative payment moratoria adopted between March and July 2020 played a crucial 
role in providing borrowers with a temporary breathing space. An additional financial scheme amounting 
to  €11  billion  aimed  at  sustaining  the  flow  of  credit  to  the  economy  by  helping  firms  whose  financial 
situation had significantly deteriorated throughout the pandemic.  

(20)  The emergency actions implemented by the Spanish governments were carried out in light of the amendments to the Temporary 

Framework approved by the Commission on 3 April 2020.  

16 

 
 
                                                           
Table 3.1: 

Private debt indicators, Spain 

3. Thematic chapter: Private Indebtedness 

Notes: (f) European Commission forecast, . (1) Quarterly data is non-consolidated. (2) Gross non-performing bank loans and 
advances to Households and non profit institutions serving households (% of total gross bank loans and advances to 
Households and non profit institutions serving households). (3) Gross non-performing bank loans and advances to Non-
financial corporations (% of total gross bank loans and advances to Non-financial corporations). (4) Quarterly data is 
annualized. 
Sources: Sources: (a) Eurostat, (b) Ameco, (c) European Commission calculations, (d) ECB. 

17 

2003-072008-122013-18201920202021f|21Q121Q221Q321Q4SourceStocksPrivate debt level (% of GDP)(1)(a,d)159198154129147138|171168165161Private debt level (% of potential GDP)(1)(a,b,d)164190147131133131|153156154153Prudential threshold (% of GDP)(c)1089995999898|Fundamental benchmark (% of GDP)(c)749510295107103|FlowsPrivate credit flows (transactions, % of GDP)(4)(a)25.3-0.7-3.11.14.42.4|2.016.8-3.10.5Private credit flows (transactions, % of potential GDP)(4)(a,b)26.1-0.5-2.91.24.02.3|1.815.6-2.90.5Benchmark for flows (% of GDP)(c)|Households (HH)StocksHH debt level (% of GDP)(a,d)708367576258|63616058HH debt level (% of potential GDP)(a,b,d)728064585756|56575656Prudential threshold (% of GDP)(c)484239424141|Fundamental benchmark (% of GDP)(c)354647434847|Debt (% of gross disposable income)(a,b,d)111130107919493|93959393Interest paid (% of gross disposable income)(a,b)3.13.41.10.60.4|0.30.30.30.5Debt (% of gross financial assets)(a,d)40.749.333.229.227.826.1|27.226.926.826.1Share of variable rate loans for house purchase (%)(d)88.685.654.235.834.525.9|Domestic  loans in forex (% of dom. loans)(d)0.31.10.70.50.40.3|FlowsHH credit flows (transactions, % of GDP)(4)(a)10.7-0.4-1.60.0-0.40.6|-0.85.1-2.80.7HH credit flows (transactions, % of potential GDP)(4)(a,b)11.0-0.3-1.50.0-0.40.5|-0.74.8-2.60.7Benchmark for flows (% of GDP)(c)4.12.2-0.10.91.00.9|Savings rate (% gross disposable income)(b)8.39.06.68.315.011.4|Investment rate (% gross disposable income)(b)15.39.94.95.55.69.4|p.m. Bank HH NPLs (% of HH loans)(2)(d)4.6|Non-financial corporations (NFC)StocksNFC debt (% of GDP)(1)(a,d)8911586728480|109107105103NFC debt (% of potential GDP)(1)(a,b,d)9211082737676|97999898Prudential threshold (% of GDP)(c)595755575757|Fundamental benchmark (% of GDP)(c)404955525957|Debt (% of value added)(a,b,d)166202156128155146|194196192188Interest paid (% of gross operating surplus)(a,b)17.715.86.33.83.8|3.23.32.83.2Debt (% of gross financial assets)(a,d)119137100838377|Domestic  loans in forex (% dom. Loans)(d)1.41.21.72.11.71.9|1.91.71.81.9FlowsNFC credit flows (transactions, % of GDP)(4)(a)14.6-0.3-1.51.14.81.8|2.811.6-0.4-0.2NFC credit flows (transactions, % of potential GDP)(4)(a,b)15.1-0.1-1.41.14.31.7|2.510.8-0.4-0.2Benchmark for flows (% of GDP)(c)|Investment (% of value added)(b)28.721.324.527.526.423.7|Savings (% of value added)(b)21.529.735.233.434.834.4|p.m. Banks NFC NPLs (% of NFC loans)(3)(d)10.84.74.6|Total private sector (Households and Non-financial corporations) 
 
   
 
Graph 3.2: 

Thematic Graphs: Private Indebtedness 

3. Thematic chapter: Private Indebtedness 

Source: European Commission services 

18 

0204060801001201401602010=100, chain linked values(b) Real fixed capital formationTotal fixed assetsTotal ConstructionMachinery and equipment and weapons systemsIntellectual property products-3-2-101234567EMFTotalGLCDJHILoans in % of total assets, % change 2020-2019(c ) Total loans in % of assets, by NACE sectorsource: Bach database50607080901001101202019Q1=100(a) Real gross value addedIndustryConstructionTrade, tourism, transportReal estatesource:Eurostat02040608010012014020M0120M0320M0520M0720M0920M1121M0121M0321M0521M0721M0921M1122M01% of same month in 2019(f) Nights spent at tourist accommodationstotalforeigndomesticsource: Eurostat20406080100120140Index, 2015=100(e ) Business registrationsIndustryWholesale and retail tradeTransportation and storageAccommodation and foodsource: Eurostat050100150200250300350400Index, 100=2015(d) Business bankruptciesIndustryWholesale and retail tradeTransportation and storageAccommodation and foodsource: Eurostat