The Big Question: A more positive outlook?

Spain and Portugal have both surpassed the rumours, earlier this year, of a pending financial
crisis and potential contagion from the crisis in Greece. Are lawyers feeling more or less
positive about the future economic outlook than you were a year ago?

“I am feeling
more positive
about the future
economic outlook
for Spain than I
was a year ago.
Spain’s crisis
roared in as a
tremendous
‘double whammy’:
the inevitable
bursting of the real
estate bubble timed
perfectly to coincide with a global crisis of
financial institutions.

The world has stepped back from the brink
of financial meltdown and well over one-half of
Spain’s banking system has passed the famous
(or infamous) stress tests with flying colours.
Now with the virtual mergers, this important
sector (savings banks) of the financial system is
being brought under the discipline of the
market and it will therefore eventually be sorted
out. The enormous excesses of the real estate
sector are slowly being digested – perhaps too
slowly in the opinion of some experts – but it
takes time to cure a bad hangover.

My feeling now is that Spain has been
tremendously ‘perjudicado’ by its binge in the
real estate and savings bank sector but is now
on the road to a slow recovery. Money seems to
be returning and there are no doubt some
bargains to be found!”

Charles C Coward,
Senior Partner, Uría Menéndez

“Although the Portuguese situation is not at
all comparable to Greece, I feel that the
economic situation has deteriorated from last
year. The lack of available cash is spreading
throughout the small and medium-sized
companies in particular, and that is putting
considerable pressure on all businesses. I think
that the situation is linked to the current
financial crisis in Europe and Europe’s
restrictive
policies but I am
confident that it
will improve,
although not in
2010. I also
believe the legal
market has not
been too affected
by this – in our
case, we have
seen an increase
in the demand
for legal services but have also felt some fee
pressure and some delayed payments.”

Miguel Teixeira de Abreu,
Managing Partner, Abreu Advogados

“A year ago, I thought (like
Zapatero) that the recovering
US market and the alwaysstrong
emerging markets
would pull lagging and
relatively rigid economies
like Spain out of the
doldrums, on the timeproven
theory that all ships
prosper on a rising tide.
But now with the end of
the US stimulus program and
the real concern of a US ‘double-dip’ recession, I may (like
Zapatero) have been too naive in my optimism. Moreover,
recent events have shown that Spain has become, to some
extent, uncoupled from other economies and has
important problems of its own. And to a certain extent,
which are more political than economic, there seems to be
good reasons both for optimism and for pessimism.”

Cliff Hendel,
Partner, Araoz & Rueda

“I am marginally more positive than a year ago – I
believe the relevant players understand more precisely the
issues that are at stake, the Greek rescue is a good
example. There is still a long way to go and I anticipate
that the second half of 2010 and 2011 will be extremely
difficult– the post-World Cup summer will be painful for
large sectors of the economy.”

Pedro Rebelo de Sousa,
Managing Partner, SRS Advogados

“I am feeling more optimistic than I was a year ago, but
sentiment is fragile and there will continue to be challenges
ahead.”

Michael J Willisch, Resident Partner,
Davis Polk & Wardwell LLP

“We still live in difficult, uncertain and (hopefully not)
dangerous times – there is some positive news but also still
black clouds on the horizon. We have read that Spain will
re-enter into recession by the
end of the year, but listed
companies are still improving
their results.

In any case my feeling is
clearly more positive than a
year ago. The government has
finally adopted some difficult
reforms and I hope they will
implement them, Spain´s
financial market has also been
reshaped. It is difficult to say
that we are at last back on the
right track, but at least we are not on the negative track
which we have been on for the last two years. In summary,
there is still uncertainty, but (hopefully) better prospects.”

Gonzalo Jiménez-Blanco,
Managing Partner, Ashurst