Progress here has helped Spain in ceasing to evidence excessive macroeconomic imbalances, in the opinion of the European Commission, expressed in the conclusions of the report it issued on 5 March as part of the European Semester. This is a positive result which should nevertheless not distract us from the need to continue adopting measures that further the correction of the imbalances still in place, even though appreciable progress is being made. Of most visibility and weight has been the redressing of the external deficit. Following a deficit of 10% of GDP in 2007, the external balance posted a surplus of 1.5% of GDP in 2013. From the standpoint of its contribution to GDP growth, net external demand has substantially cushioned the fall-off in domestic demand. The opening-up of our productive system to the external sector through trade flows and foreign direct investment is, as you know, one of the factors that has most boosted the modernisation of the Spanish economy in recent decades. The aggregate share of goods and services imports and exports from 1995 to 2013 has risen from 45% to 66% of GDP, outpacing countries such as France and Italy, although it is still some distance off those economies with greater export potential, such as Germany. The buoyancy of Spanish exports has exceeded the increase in global trade. Our export share in the world total, in real terms, has increased over the past five years to around 2.2%, slightly above the relative weight of our economy in world output.
Such coverage is the norm for exports towards countries with appreciable risk and in transactions which, frequently, have the sovereign guarantee of the importing country. CESCE also provides underwriting on the State’s behalf for the political risks associated with exports (the main such risk being default by the sovereign or by the institutions backed by the sovereign), except in operations at less than two years in EU and OECD countries, where it is considered that there is a sufficiently developed private underwriting market; it also extends guarantees and bonds for participating in international tender procedures and projects. From 1998 to 2007 there was a strong expansion in international banking activity in financing for Spanish companies’ international activity. Banks took on a relevant role in the financing of trade flows to emerging countries and in the opening-up of new markets. Against the backdrop of this boom, the use of instruments offered by export credit agencies for exports became less necessary and less frequent. The international financial crisis The financial instability as from mid-2007 and the outbreak of the crisis in autumn 2008 radically altered this financial landscape, giving way to an across-the-board decline in financing by international banks. The contraction in credit had a particularly severe effect on international trade, which fell by between 20% and 30% in the main economies. The central banks responded to this situation through coordinated action that stabilised bank financing conditions.