September 28, 2007 (LPAC)--The financial firm of Morgan Stanley has issued a report warning that the U.S. mortgage crisis is just a preliminary of a larger blow-out of the entire European mortgage bubble, the German edition of the Financial Times reported today. Belgium, Denmark, Greece, Great Britain, Sweden and Spain have seen a very high growth in the price of houses since 1997, which, as compared to population growth, income levels, and cost of money, is even more unbalanced than the situation in the United States.

Foreclosures in Belgium, Ireland and the Scandinavian countries are increasing. Spain and Britain are countries where it can be said that the bubble is already collapsing. In Britain, foreclosures have increased 30% in one year.

The situation in Spain is identified as "particularly critical," with more than 15 percent of all house and apartment properties empty, according to a study by a U.N. representative Miloon Kothari. In total, Spanish banks have issued mortgage loans for 700 billion euros, an incredible 97% of which carry an adjustable interest rate.