Spain's Zombie Developments

By Bloomberg Photos - 2013-03-26T10:56:24Z

Photograph by Markel Redondo/Panos

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The Bubble Bursts

Spain's zombie developers are finally about to die.

Spanish banks are pulling the plug on thousands of builders kept alive during the past five years even as they built almost nothing. The banks, forced by the government last year to set aside provisions for the developers, have no incentive to keep funding them.

The final collapse of an industry that accounted for as much as 18 percent of Spain's growth amid the country's decade-long real estate boom will add to unemployment, already at a record 26 percent, depress consumer spending needed to turn around the economy and push down the value of residential real estate that's already dropped more than 30 percent since 2007.

Left, the incomplete Francisco Hernando housing complex in Sesena.

To read the full Bloomberg article, click here.