Spain's real estate bubble bursts

Spain's biggest real estate group Martinsa-Fadesa has filed for bankruptcy. The announcement has had a domino effect for construction and real estate companies on the stock markets. Some politicians have called for the state to intervene and offer state aid. The daily El Mundo opposes this: "Martina-Fadesa is the real estate group that holds the greatest area of built-up square metres in the country (28 million) and owns 170,000 living units currently under construction. ... Experts fear that Martinsa ... will be only the first of a long series to declare bankruptcy in this sector. ... One issue that needs to be analysed is the shady connection between real estate groups and financial institutes that provided great sums for companies with dubious solvency records. ... There is no justification for the government to rush to the financial aid of a sector that has proceeded with so little transparency."

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