overcome, for the winding down of the various measures that central banks and governments have adopted in the face of the risk that this crisis might bring the world economy to the verge of a depressive spiral with grave consequences. the raft of measures adopted has been wide - ranging, and many are based on common principles jointly agreed upon in different international fora. multilateral cooperation is crucial for successfully tackling a global crisis. further headway must thus be made along these lines, harnessing opportunities such as that provided by the g20 meeting in london last april. not in vain, one of the lessons to be drawn from past experience is that economic redeployment behind national borders and protectionism are sure - fire recipes for exacerbating and prolonging global crises such as the present one. among the measures adopted, central banks in the advanced economies reacted decisively by providing abundant liquidity to financial systems and substantially cutting their key interest rates. these standard monetary policy measures were later complemented by other, nonconventional measures. the european central bank began very early to increase liquidity assistance and, from october, banks ’ applications for liquidity began to be met in full, while the range of financial assets accepted as collateral for these operations was widened. the main refinancing rate has been cut by 325 basis points to an all - time low of 1 % following the may meeting. and, as regards extraordinary measures, the term over which liquidity is injected has been extended to 12 months, and funds are provided in currencies other than the euro, thanks to cooperation agreements with other central banks ; the european investment bank has been granted the status of eligible counterparty, in order to smooth the course of the loans this institution makes to european smes ; and the decision has been taken to purchase covered bonds and other similar types of asset - backed bonds. at the same time, an expansionary monetary impulse of unprecedented proportions was set in train in europe, commensurate with the seriousness of the contractionary trends experienced in the real and financial domain. at government level, measures were aimed, first, at supporting financial systems and, further, at stimulating demand. among the former, selective bail - outs of banks of systemic importance in the opening months of 2008 were followed, after the heightening of tensions in markets as from the summer, by the raising of deposit guarantee scheme limits, governmentbacked bank issues, public injections of capital and the purchase or the safeguard

. the origin of this behaviour lies in the overlapping of a series of differing shocks. firstly, the correction of the real estate sector and of the high level of private - sector debt, which had started prior to the crisis, already entailed significant elements of spending containment. further, however, the forceful effects of the international financial crisis and of the global recessionary trends compounded this situation, amplifying the contraction of domestic demand, eliminating any possible external support and exacerbating the loss of confidence. this latter factor was, moreover, particularly affected by the impact of the far - reaching deterioration of the labour market on income expectations, an important matter which i shall return to later. as a result of these factors, there was a marked decline in spanish household spending, both on consumption and on residential investment. in 2008, both items accounted jointly for 80 % of the decline in the contribution of national demand to output, which stood at slightly more than 4 pp for the year on average. naturally, the heightening of the financial crisis in the final stretch of the year, and the subsequent deterioration in macroeconomic expectations, saw the contractionary impulses spread to the other components of domestic spending, meaning that business investment ultimately collapsed in the second half of the year. indeed, the sole prop of spending in 2008 was net external demand, which showed a marked increase with a contribution of 1 pp to gdp growth for the year as a whole and of 2. 3 pp in the final quarter. set against the progressive weakening of the world economy, this improvement in the external contribution was due to the notable slowdown in imports, whereby the fall in gdp is proving more moderate than in other countries. the decline in residential investment, along with the sharp pick - up in the household saving rate to 13 % of disposable income, entailed an abrupt reduction in household net borrowing, insofar as households generated a net lending capacity for an amount equivalent to 0. 6 % of gdp over the year as a whole. the slowdown in household debt intensified to the extent that the debt / gdp ratio began to fall in the closing months of the year. in the case of businesses, the decline in productive investment also led to a sharp reduction in net borrowing, which was ultimately manifest in a slowdown in the rate of increase of the debt ratio, although the interest burden still continued to increase. as a result of the change in the sign and intensity of foreign trade, there has been