September 8, 2007 (LPAC)--During a highly-publicized visit Sept. 5 to the Madrid headquarters of the British Monarchy-controlled Banco Santander, Spanish Premier Jose Rodriguez Zapatero loudly proclaimed that the Spanish economy is in excellent shape, and well-positioned to face "turbulence" in the financial markets as well as recent problems in Spain's own real estate market. Don't worry, he said, Spain's economy and its financial institutions are "international models of solvency and efficiency."

Santander's president Emilio Botin replied by pointing to the "strength" of Spanish banks, and their "prudent" risk management, while boasting of the deal to purchase ABN Amro with Santander's partner Royal Bank of Scotland.

But in the real world, Spain's real estate market is in extreme meltdown. And French bankers are warning that Banco Santander itself could well be among the next wave of big banks to go under, because of its enormous exposure to the U.S. subprime market. Speaking before Botin, Zapatero insisted that Spain would continue to maintain high growth and job creation rates. But just a few hours earlier, his own Finance Minister Pedro Solbes had warned that Spain faces a situation of great "uncertainty," which, he said, bodes ill for the economy.