Analysis:Whatever about cultural differences, the similarities between Ireland and Spain on the economic front are everywhere and - as of this week - becoming quite worrying. Thankfully, there are some reassuring differences as well.
Like Ireland, Spain's economy has ridden high on the back of a construction boom. A bit lower than our own, its latest available rate of economic growth, 3.8 per cent for the third quarter of last year, compares favourably with 2.7 per cent for the euro zone.
Behind that performance, however, are other less favourable comparisons. Spain and Ireland have the highest shares of construction activity in the euro zone, 12 and 9 per cent respectively - well above the euro zone average of 6 per cent.
Together with Ireland, Spanish lending growth and house price growth are the highest in the euro zone. Correspondingly, and like Ireland, personal and corporate indebtedness has been growing strongly.
Recent trends in Spain's leading stock market index, Ibex, has also been strongly influenced by high recent profitability in the construction sector - mirroring the Iseq experience. So when the value of the Ibex fell by 2.7 per cent on Tuesday, and slipped a further 0.4 per cent yesterday, it was tempting to become worried about Ireland's property market.
The talk in Spain yesterday was of a "10-year property boom fading", of a "property bubble bursting" and of a "sharp slide in property stocks".
While there are reasons to worry about our own property market, the closer one looks at the Spanish experience, the less relevant its present problems seem.
Spain's construction boom is less diversified than our own. Holiday homes and apartments for non-residents have been a crucial driver in the Spanish one.
Only partly backed by the strength of the domestic economy and corresponding population growth as in Ireland, Spanish property development is more heavily weighted in favour of the more fickle foreign investor.
The importance of the difference is that a larger proportion of Irish property buyers are people who have family and career roots here whereas the more footloose buyer in Spain is increasingly attracted by alternative destinations like Bulgaria and Croatia.
The fact that property prices were still growing in Spain by 7.2 per cent annually in the first quarter of the year, albeit at their slowest rates since 1998, suggests that the only bubble being burst is a corporate one.
The Valencia property firm Astroc is a case in point. Having increased tenfold in February, shares in the company have lost over 60 per cent this week, spreading a contagion of fear in relation to property stocks.
Falls in share prices of established financial institutions such as Santander and BBVA, were far more modest reflecting their more diversified loan book.
