Spain's financial difficulties following the crisis of 2008 were due primarily to a housing bubble.

Question

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Spain's housing market experienced significant growth from 1997 to 2007, with a 180% increase in housing prices. Banks provided easy credit to homebuyers, which increased demand and further inflated prices. However, in 2008, the global financial crisis led to a decline in the housing market and an increase in mortgage defaults, causing significant strain on the Spanish banking system and contributing to the country's overall financial difficulties.

Spain's Financial Difficulties Following the Crisis of 2008 Were Due