Fiscal Policy Strategy

Fiscal Policy Strategy 4th May 2018

External debt and macroeconomic stabilisation Net financial liabilities, public deficit and risk premium (% GDP) Net International Investment Position (% GDP) Source: Bank of Spain. Source: EUROSTAT. 1

Macroeconomic scenario Year on year % change 2015 2016 2017 2018f 2019f 2020f 2021f Real GDP 3.4 3.3 3.1 2.7 2.4 2.3 2.3 GDP deflator 0.6 0.3 1.0 1.5 1.8 1.9 1.9 Private Consumption 3.0 3 2.4 2.0 1.8 1.7 1.7 Public Consumption 2.1 0.8 1.6 1.1 1.2 1.2 1.2 Gross Fixed Capital Formation 6.5 3.3 5.0 4.7 4.4 4.3 4.3 Domestic Demand(*) 3.9 2.5 2.8 2.3 2.2 2.1 2.1 Exports of goods and services 4.2 4.8 5.0 4.8 4.6 4.4 4.2 Imports of goods and services 5.9 2.7 4.7 4.1 4.2 4.0 4.0 External Demand(*) -0.5 0.7 0.3 0.4 0.3 0.2 0.2 Employment (**) 3.2 3 2.8 2.5 2.3 2.1 2.0 Unemployment rate (average) 22.1 19.6 17.2 15.5 13.8 12.3 11.0 Employees affiliated to 3.1 3.2 3.0 3.6 the Social Security (Apr) - - - Net lending (+)/ borrowing (-) vs RoW (***) 1.7 2.1 2.0 1.9 1.8 1.7 1.5 (*) Contribution to GDP growth; (**) full -time equivalent (***) % GDP. Source: MINEICO, MINHAFP. GDP 2018 2019 Bank of Spain (March 2018) 2.7 2.3 GDP 2018 2019 National consensus (March 2018) 2.7 2.4 2

Employment and active population (thousands. 4Q/Dec, 2018Q1/Apr18) Some structural features of the Spanish economy Better position to face the financial crisis: human capital, per capita income and internationalization Direct investment position abroad (% GDP) 2007 2011 2012 2013 2014 2015 2016 2017 2018Q1 /Apr18 Dif. Last- 2013 %y-o-y Last- 2013 Dif. Last- 2011 %y-o-y Last- 2011 Dif. 2011-2007 %y-o-y 2011-2007 Employees 20,717.9 18,153.0 17,339.4 17,135.2 17,569.1 18,094.2 18,508.1 18,998.4 18,874.2 1,739.0 10.1 721.2 4.0-2,564.9-12.4 Affiliates 19,372.8 17,229.9 16,442.7 16,357.6 16,775.2 17,308.4 17,849.1 18,460.2 18,678.5 2,320.8 14.2 1,448.5 8.4-2,142.9-11.1 Source: INE GDP per capita (PPS, euro) GDP per cápita Source: Eurostat 2007 2011 2012 2013 2014 2015 2016 Dif. 2016- Dif. 2011-2011 2007 Spain 26,900 24,200 24,200 24,000 24,900 26,300 26,700 2,500-2,700 2007 2011 2012 2013 2014 2015 2016 2017 Dif. 2017-2011 Spanish FDI abroad 39.0 49.0 51.5 50.3 53.2 54.7 58.1 55.6 6.6 (as % GDP) Source: Bank of Spain. 3

Real GDP (% y-o-y) Result: differential economic growth Private consumption (% y-o-y) (% y-o-y) Advanced Euro area economies (G7) Spain 2009-4.5-3.8-3.6 2010 2.1 2.8 0.0 2011 1.6 1.6-1.0 2012-0.9 1.4-2.9 2013-0.2 1.4-1.7 2014 1.3 2.0 1.4 2015 2.1 2.1 3.4 2016 1.8 1.4 3.3 2017 2.4 2.1 3.1 2018f 2.3 2.4 2.7 2019f 2.0 2.1 2.4 Source: INE, 2018-2021 Satbility Program, IMF (WEO April 2018), and European Commission (Spring forecast 2018). Source: Eurostat. Net lending or net borrowing row (% GDP) 4

Result: A sustainable economic growth Net lending (+) or borrowing (-) vis-à-vis ROW, inflation % and real GDP annual % change (% GDP, %) Real GDP and nominal GDP and employment (% y-o-y) Net lending (+) or borrowing (-) vis-à-vis ROW and unemployment rate (% GDP, %) Source: INE. Source: INE, 2018-2021 Satbility Program. 5

With a relevant role in the contribution of domestic demand to economic growth Contribution to national demand and its components to GDP growth (pp and y-o-y % change) Domestic demand, external demand contributions and real GDP (pp and y-o-y % change) Source: INE 6

Brent oil Price $ per barrel Determinants of the contribution of external demand to economic growth Energy and non-energy trade balance (M ) Brent oil $ per barrel 2011 2012 2013 2014 2015 2016 2017 2018 (Jan- Apr) Source: Eurostat, Bank of Spain and 2018-2021 Satbility Program. 2018 f 112.2 112.4 109.7 99.4 52.1 43.3 54.2 68.1 67.7 Trade balance (M ) 2007 2011 2012 2013 2014 2015 2016 2017 2018 (Jan- Feb) Non-energy -66,200-5,010 13,215 24,461 11,866 857-754 -4,023-1,580 Energy -33,815-42,900-45,046-40,993-36,841-25,835-16,632-20,721-4,523 Total -100,015-47,910-31,831-16,533-24,975-24,978-17,385-24,744-6,103 Balance of Payments (% GDP) Goods y Services 2007 2011 2012 2013 2014 2015 2016 2017 2018 Imports 31.7 29.1 29.2 29.0 30.3 30.7 29.9 31.4 - Exports 25.7 28.9 30.7 32.2 32.7 33.0 32.9 34.1 - Total -6.0-0.2 1.5 3.3 2.5 2.3 3.0 2.7-7 Source: AEAT, Bank of Spain.

Competitiveness Unit Labour costs (Index 100=2010) Exchange rate($/ ), and real effective exchange rate (index) NULC (y-o-y%) 2007 2011 2012 2013 2014 2015 2016 2017 2007-1997 2017-2007 Spain 4.1-1.0-2.6-0.6-0.3 1.4-0.7-0.1 33.8 1.7 Euro area 19 1.4 0.6 2.0 1.1 0.7 0.4 0.8 0.7 14.6 14.3 Exchange rate $/ Real effective exchange rate index ( ) 2011 2012 2013 2014 2015 2016 2017 2018 (Jan-Apr) 2018f 1.392 1.286 1.328 1.329 1.110 1.107 1.129 1.229 1.2300 100.2 95.0 98.2 97.9 88.4 89.5 91.4 93.9 - Source: Bank of Spain and 2018-2021 Satbility Program. Source: OECD. 8

Fiscal consolidation and saving Net lending (+) or net borrowing (-) by institutional sector (% GDP) Source: INE, IGAE and 2018-2021 Satbility Program. (% GDP) 2010 2011 2012 2013 2014 2015 2016 2017 2018f 2019f 2020f 2021f Net lending (+)/ borrowing (-) vis-àvis RoW -3.3-2.9 0.1 2.1 1.5 1.7 2.1 2.0 1.9 1.8 1.7 1.5 9

General Government balance, and economic growth Net lending (+)/net borrowing (-) (%GDP) Source: IGAE, MINHAFP, MINEICO and 2018-2021 Stability Program. 10

Budgetary policy, Expenditure General Government expenditure(%) SPAIN 1996 2000 2004 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018f 2019f 2020f 2021f Total Expenditure/GDP (%)* 43.0 39.2 38.7 39.0 41.2 45.8 45.6 45.3 44.3 45.1 44.6 43.7 41.9 41.0 40.5 39.8 39.1 38.6 Total Expenditure/GDP (y-o-y %)* 3.0 6.7 8.4 9.3 8.9 7.5-0.2-1.5-5.1 0.3 0.2 1.8-0.5 1.6 3.1 2.5 2.4 2.7 Nominal GDP (y-o-y %) 6.2 8.7 7.2 7.2 3.3-3.3 0.2-1.0-2.9-1.4 1.2 4.1 3.6 4.0 4.3 4.2 4.3 4.3 11 Source: INE, IGAE, MINHAFP. Stability Programme *Expenditure excluding financial assistance one-offs expenditure.

Budgetary policy, Expenditure by function General government expenditure by function 01 General public services* 02 Defense 03 Public order and safety 04 Economic affairs* 05 Environmen tal protection 06 Housing and community amenities 07 Health 08 Recreation, culture and religion 09 Education 10 Social protection Total Total Expendi Expenditure ture/gd * P* (%) Promemoria: Financial sector assistance expenditure M M GDP % 1996 40,077 6,223 9,033 23,818 3,849 4,768 25,903 6,279 20,854 68,963 209,767 43.0 2000 39,969 7,127 11,031 32,017 4,689 7,431 33,320 8,639 26,384 82,518 253,125 39.2 2004 44,111 9,216 15,452 45,983 7,769 6,811 46,880 11,670 35,117 110,323 333,332 38.7 2007 53,122 10,803 20,141 56,819 10,764 9,814 61,238 16,933 43,336 138,843 421,813 39.0 - - 2008 56,984 11,228 21,878 60,309 10,884 11,807 67,292 18,140 47,044 153,802 459,368 41.2 21 0 2009 60,525 10,930 22,187 61,537 11,518 13,976 72,939 17,648 49,692 172,845 493,797 45.8 205 0,02 2010 59,853 11,267 23,385 62,498 11,358 7,573 71,080 17,861 48,492 179,290 492,657 45.6 545 0,05 2011 66,070 11,138 23,229 55,781 10,174 6,063 69,240 16,214 47,137 180,104 485,150 45.3 5.442 0,51 2012 68,472 9,679 21,194 43,749 9,302 4,824 64,685 12,653 43,307 182,728 460,593 44.3 39.584 3,81 2013 72,577 9,862 21,048 43,743 8,621 4,681 63,307 11,810 42,081 184,448 462,178 45.1 5.148 0,5 2014 71,927 8,969 20,832 45,517 9,096 5,174 63,492 11,958 42,520 183,476 462,961 44.6 2.463 0,24 2015 69,280 10,433 21,841 47,274 9,307 5,561 66,483 12,593 44,360 184,340 471,472 43.7 1.268 0,12 2016 67,817 10,904 21,210 41,486 9,163 5,403 67,598 12,383 44,914 188,289 469,167 41.9 2.866 0,26 2017 64,769 10,365 21,346 43,960 9,905 5,534 69,258 12,676 45,936 192,794 476,543 41.0 789 0,09 2018f 64,804 10,588 21,934 46,773 10,209 5,722 71,198 13,048 47,199 199,816 491,291 40.5 200 0,02 2019f 66,176 11,050 22,435 45,391 10,462 5,874 72,916 13,360 48,298 207,782 503,747 39.8 2020f 67,700 11,410 22,982 46,376 10,726 6,028 74,721 13,691 49,482 212,964 516,082 39.1 2021f 69,498 11,749 23,672 47,666 11,064 6,227 76,889 14,113 50,932 218,346 530,157 38.6 Source: IGAE, MINHAFP Stability Programme, *expenditure excluding financial assistance one-offs expenditure 12

General government revenue General government revenue (% GDP) SPAIN 1996 2000 2004 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017f 2018f 2019f 2020f 2021f Total Revenue/GDP (%) 37.6 38.1 38.7 41.0 36.7 34.8 36.2 36.2 37.6 38.6 38.9 38.5 37.7 37.9 38.3 38.5 38.6 38.7 Total Revenue (y-o-y %) 7.2 7.2 9.3 8.5-7.4-8.3 4.3-1.1 1.0 1.1 2.0 3.0 1.4 4.6 5.3 4.8 4.6 4.6 Nominal GDP (y-o-y %) 6.2 8.7 7.2 7.2 3.3-3.3 0.2-1.0-2.9-1.4 1.2 4.1 3.6 4.0 4.3 4.2 4.3 4.3 Source: INE, IGAE, MINHAFP Stability Programme 13

Tax policy and domestic demand Source: AEAT 1996 2000 2004 2007 2011 2012 2013 2014 2015 2016 2017 2018f 2019f 2020f 2021f Total Taxes 100,390 141,100 193,584 267,889 212,412 218,814 225,278 230,915 242,999 246,475 259,355 273,228 287,962 302,268 317,338 Taxes on products 44,167 66,460 92,746 112,963 91,032 89,935 96,003 99,658 106,946 109,420 114,822 120,215 127,734 133,607 139,749 Other taxes on production 5,795 7,632 9,090 11,669 15,481 18,616 19,007 19,986 20,553 19,873 20,041 20,688 21,000 21,288 21,583 Taxes on income and wealth paid by households and NPISH 2015 2016 Cumulative 2015-2016 PIT -4,813-4,487-9,300 CIT -1,089-1,920-3,009 Total -5,902-6,407-12,309 Impact of tax reform ( M) 2015 2016 2017 Tax reform Impact (GDP pp) 0.34 0.57 0.70 Source: MINHAFP. Cumulative. % of GDP growth vs base year General government consolidated revenues ( M) 39,222 44,601 57,952 86,263 81,513 82,892 82,971 83,772 83,167 85,188 91,463 96,151 100,049 104,923 109,982 Taxes on income and wealth paid by corporations 9,546 19,918 30,191 51,642 20,490 23,491 22,203 21,834 26,001 25,582 27,351 30,360 33,219 36,341 39,758 Capital taxes 1,660 2,489 3,605 5,352 3,896 3,880 5,094 5,665 6,332 6,412 5,678 5,814 5,960 6,109 6,265 Social contributions 61,166 81,425 109,168 136,417 137,802 131,859 128,217 130,052 132,320 136,173 142,908 149,982 157,106 164,569 172,386 Sales and other current revenue 21,995 23,494 30,242 38,299 37,164 40,657 42,144 42,515 40,417 38,984 38,836 41,136 41,634 42,036 42,442 General Government consolidated renues Fiscal burden" (Revenue/GDP) Source: IGAE, MINHAFP 183,551 246,019 332,994 442,605 387,378 391,330 395,639 403,482 415,736 421,632 441,099 464,346 486,702 508,873 532,166 37.6 38.1 38.7 41.0 36.2 37.6 38.6 38.9 38.5 37.7 37.9 38.3 38.5 38.6 38.7 14

Tax revenues performance Total Tax revenues( bn) 2007 2011 2012 2013 2014 2015 2016 2017 2018f % 17/16 Personal Income Tax 72.614 69.803 70.619 69.951 72.662 72.346 72.416 77.038 82.056 6.5% Corporate Income Tax 44.823 16.611 21.435 19.945 18.713 20.649 21.678 23.143 24.258 4.8% Other 2.542 2.158 3.027 3.154 3.239 3.759 3.733 4.273 4.683 9.6% Chapter I.- Direct Taxes 119.979 88.572 95.081 93.050 94.614 96.753 97.827 104.454 110.996 6.3% Vat 55.851 49.302 50.464 51.931 56.174 60.305 62.845 63.647 71.575 12.5% Vat* 55.851 49.302 50.464 51.931 56.174 60.305 62.845 67.797 71.575 5.6% Excise Taxes 19.786 18.983 18.210 19.073 19.104 19.147 19.866 20.308 21.612 6.4% Other 3.224 2.965 2.920 2.721 2.956 3.275 3.411 3.563 3.736 4.9% Chapter II.- Indirect Taxes 78.861 71.250 71.594 73.725 78.233 82.727 86.122 87.518 96.923 10.7% Chapter II.- Indirect Taxes* 78.861 71.250 71.594 73.725 78.233 82.727 86.122 91.668 96.923 5.7% Chapter III.- Other Tax revenues 1.836 1.938 1.892 2.073 2.140 2.529 2.300 1.978 2.096 6.0% Total Tax Revenues 200.676 161.760 168.567 168.847 174.987 182.009 186.249 193.951 210.015 8.3% Total Tax Revenues* 200.676 161.760 168.567 168.847 174.987 182.009 186.249 198.100 210.015 6.0% * SII effect corrected Source: AEAT. MINHAFP 15

Fight against fiscal fraud Form 720: Reporting statement of properties and rights situated abroad Fight against fiscal fraud results (M ) Stays at historical records Tax years* 2012-2016 Value of properties declared( M ): stock Shares or stocks in Collective Investment 20,799 Institutions Bank or credit accounts 20,433 Real estate assets and rights on real estate Insurance and life or temporary annuities 13,009 4,028 Reporting Taxpayers 175,988 Securities and rights 45,071 STOCK 103,340 As of Nov. 13th 2017 * Non included singular one-off records.**reduced returns stemming from rectification request self-assessments are included as of 2013 Source: AEAT Tax year* Form 750: Special Tax Return Num of Taxpayers Resulting amount payable ( ) 2012 29,683 1,193,598,829 * Year of property possession 16

Tax base developments Tax base and National Demand (y-o-y % change ) Significant Tax reforms : PIT 1999, 2003 2007; 2008 PIT, CIT; 2010 PIT, VAT; 2012 PIT, CIT,VAT; 2015-2016 PIT, CIT PIT CIT VAT Source: MINEICO, MINHAFP. Estimates as in Draft Budgetary Plan Oct. 2017 17

Fiscal policy and deleveraging Indebtedness by country (% GDP) Non Financial corporations (M ) Source: Bank for International Settlements. Source: Bank of Spain SPAIN EURO AREA Indebtedness(Stocks) (Mill. ) 2011Q4 2017Q3 Dif. M Dif. % Dif. M Dif. % Non finacial private sector 2,290,904 1,839,891-451,013-19.7 1,286,179 9.5 - Non finacial corporations 1,415,741 1,128,343-287,398-20.3 1,286,179 12.8 - Households 875,163 711,548-163,615-18.7 248,100 4.0 Madrid Stock Exchange market cap. 442,034 755,986 313,952 71.0 18

Deleveraging, the ECB and credit developments Loans. New business. Total (y-o-y % change) 10-Y Government bond yield (monthly average %) Loans. New Business. (y-o-y %) Source: Bank of Spain. 2011 2012 2013 2014 2015 2016 2017 2018 (Jan-Mar) Spain -23.7-8.9-19.0-6.0 12.3-13.9 5.8 9.7 Euro Area -7.0-6.7-6.0-3.5 15.2-0.4 3.3-4.3 10-Y Government bond yield 10-Y spread over German bond(pp) 2011 2012 2013 2014 2015 2016 2017 2018 (Jan- Apr) 5.437 5.847 4.562 2.722 1.735 1.393 1.588 1.403 2.829 4.352 2.992 1.558 1.235 1.248 1.201 0.793 19

Commercial Debt incurred by Public Administrations (M ) Funding policy : Central Government Drivers of public debt growth ( % of GDP) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018f Source: BdE. Total Liquidity to Regions and Local Governments: 268,865 M 70% of the liquity fund social policies of the Regional and Local Governments 94,817 M of the liquidity transferred to public sector suppliers General Government debt 39.5 52.8 60.1 69.5 85.7 95.5 100.4 99.4 99.0 98.3 97.0 Change in public debt 3.9 13.3 7.4 9.4 16.2 9.7 4.9-0.9-0.4-0.7-1.3 Factors of debt growth : Primary deficit 2.9 9.3 7.6 6.9 3.8 3.2 2.4 2.1 1.5 0.5-0.2 Interest expenditure 1.5 1.7 1.9 2.5 3.0 3.5 3.5 3.1 2.8 2.6 2.4 Financial sector recapitalisation (deficit) 0.0-0.1-0.1 0.3 3.7 0.3 0.1 0.1 0.2 0.04 0.02 Financial Funds to territorial gov. 0.0 0.0 0.0 0.0 4.3 3.1 3.0 3.4 2.0 1.5 1.4 FADE 0.0 0.0 0.0 0.9 0.5 0.7-0.1-0.2-0.1-0.1-0.1 EFSF (lending to Greece. Irl. Port) 0.0 0.0 0.0 0.2 1.5 0.5 0.1-0.1 0.0 0.0 0.0 Others 0.6 1.0-1.9-2.0-2.7-2.7-3.0-5.3-3.4-1.3-0.9 Contribution of change in nominal GDP -1.1 1.4-0.1 0.6 2.0 1.2-1.1-3.9-3.4-3.8-4.0 Source: MINEICO,BdE. General Gov. Debt target(% GDP) 2018 2019 2020 2021 97,0 95,2 92,4 89,1 Fuente: MINEICO, Stability Programme 2018-2021 20

Structural reforms STRUCTURAL REFORMS PUBLIC SECTOR REFORMS FINANCIAL SECTOR REFORMS Reforms 2012 Labour Market Health sector Education Budgetary framework Budgetary Stability Law Financial Sector SAREB Pension System Reform Single Market Local Administrations Reform Regulatory Bodies. CNMV Recapitalizing Reforms 2013 Energy sector Entrepreneurs Act e- invoicing CORA New Taxation for entrepreneurs R+D+i Commercial debt Act Average payment period Restructuring Reforms 2014 Active employment policy measures and youth guarantee Social Security flat rate Independent Authority for Fiscal Responsibility New Legal framework for Financial Disintermediation Reforms 2015 Active Policies Second Chance Act Tax Reform Reduction of S.S. Contributions Insolvency Regime 21

Budgetary policy, Fiscal balances Central Government Regional Governments Net lending (+)/net borrowing (-) in terms of stability targets compliance (% GDP) 1996 2000 2004 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017-3.82-1.13-0.95 1.29-2.89-9.18-5.54-5.46-4.26-4.52-3.55-2.71-2.48-1.86-0.63-0.50-0.08-0.32-1.71-2.01-3.17-3.35-1.87-1.58-1.78-1.73-0.84-0.32 Local Governments 0.01 0.09 0.01-0.31-0.48-0.55-0.52-0.4 0.32 0.55 0.53 0.42 0.61 Social Security -0.93 0.44 0.97 1.27 0.66 0.72-0.23-0.1-0.98-1.13-1.04-1.21-1.59-1.48 General Government -5.37-1.10-0.04 1.92-4.42-11.02-9.45-9.31-6.79-6.67-5.84-5.23-4.29-3.07 Promemoria Net financial assitance 0.00 0.06 0,.07-0.33-3.68-0.32-0.13-0.05-0.21-0.04 Source: IGAE, MINHAFP. Excluding financial assistance. Excluding 2008 and 2009 Settlements of the regional financing system for 2010 and 2011 0.59 Balances including negative settlements 2010 2011 Central Government -4.86-3.30 Regional Governments -3.72-5.12 Local Governments -0.65-0.79 Social Security -0.23-0.10 General Government -9.45-9.31 Net financial assitance 0.07-0.33 22

Budgetary policy, Fiscal balances and stability targets 2011 Targ. 2012 Targ. 2013 Targ. 2014 Targ. Targ. Targ. Targ. 2015 2016 ECOFIN SP SP (dec) 2017 Obj. Central Government -5.46-4.8-4.26-3.5-4.52-3.8-3.55-3.5-2.71-2.9-2.48-2.2-1,86-1,1 Regional Governments -3.35-1.3-1.87-1.5-1.58-1.3-1.78-1.0-1.73-0.7-0.84-0.7-0,32-0,6 Local Governments -0.40-0.3 0.32-0.3 0.55 0.0 0.53 0.0 0.42 0.0 0.61 0.0 0,59 0,0 Social Security -0.10 0.4-0.98-1.0-1.13-1.4-1.04-1.0-1.21-0.6-1.59-1.7-1,48-1,4 General Government -9.31-6.0-6.79-6.3-6.67-6.5-5.84-5.8-5.5-5.23-4.2-4.29-4.6-3,07-3,1 General Government including financial assistance Net lending (+)/net borrowing (-) in terms of stability targets compliance (% GDP) -9.64-10.47-6.99-5.97-5.28-4.51-3,11 Source: IGAE, MINHAFP. Excluding 2009 Settlements ofthe regional financing system for 2011 Stability target compliance: 2011 non compliance. 2012 effective action is taken even if the nominal target is not met (fiscal effort). 2013 fiscal effort met. 2014 meets ECOFIN council target ( excluding financial assistance). 2015 non compliance. 2016 compliance. Stability targets 2018 2019 2020 2021 Central Government -0.7-0.3 0.0 0.0 Regional Governments -0.4-0.1 0.0 0.0 Local Governments 0.0 0.0 0.0 0.0 Social Security -1.1-0.9-0.5 0.0 General Government -2.2-1.3-0.5 0,1 Source: IGAE, Stability Programme 2018-2021 23

Regional Governments outturn balances Net lending (+)/net borrowing (-) (% regional GDP) 2000 2004 2007 2008 2009 2010** 2011** 2012 2013 2014 2015 2016 2017(A) Andalucía -0.98 2.13 0.30-1.04-1.66-3.15-3.37-2.11-1.58-1.55-1.19-0.69-0.22 Aragón -0.51-0.54-0.17-1.10-1.66-2.90-2.65-1.67-2.21-1.80-2.07-1.16-0.92 Asturias -1.30 0.19-0.03-0.90-1.55-2.69-3.64-1.02-1.05-1.12-1.54-0.49-0.31 Baleares -0.15-2.27-1.89-3.56-3.43-4.39-4.36-2.01-1.23-1.87-1.82-0.46 0.48 Canarias -0.15-0.63 0.15-0.91-1.27-2.40-1.54-1.14-1.07-0.99-0.69-0.39 0.67 Cantabria -0.25 0.60 0.03-1.30-3.47-3.90-3.75-1.91-1.31-1.48-1.71-1.50-0.37 Castilla-La Mancha -0.16-1.04-0.29-2.86-4.41-6.29-7.64-1.31-2.06-1.89-1.62-0.81-0.72 Castilla y León -0.21 0.15-0.46-1.14-1.66-2.58-2.73-1.49-1.21-1.18-1.38-0.64-0.95 Cataluña -0.31-0.65-0.85-2.89-2.51-4.48-4.11-2.27-2.15-2.66-2.84-0.92-0.56 Extremadura -0.86 0.32 0.54-1.38-1.80-2.45-4.60-1.04-0.98-2.57-2.80-1.68-0.88 Galicia -0.53-0.18-0.02-0.65-1.03-2.31-2.22-1.35-1.14-1.00-0.71-0.58-0.20 Comunidad de Madrid -0.36 0.07-0.44-0.94-0.48-1.01-1.80-1.01-0.94-1.41-1.37-0.64-0.47 Región de Murcia* -0.13-0.04-0.11-2.86-2.50-4.88-4.70-3.26-3.21-2.93-2.52-1.72-1.51 Comunidad Foral de Navarra 0.25 0.01 0.77-4.79-3.26-3.79-3.11-1.77-1.45-0.83-1.38-0.72 1.22 La Rioja -0.84-0.30-1.00-1.35-0.97-3.83-1.47-1.16-1.08-1.32-1.22-0.51-0.39 Comunidad Valenciana -1.83-1.43-1.22-2.18-2.90-4.59-4.95-3.85-2.19-2.60-2.54-1.50-0.73 País Vasco 0.86-0.06 1.11-1.20-3.91-2.44-2.71-1.46-1.24-1.05-0.73-0.62 1.50 Total Regions -0.50-0.08-0.32-1.71-2.01-3.17-3.35-1.87-1.58-1.78-1.73-0.84-0.32 * National Accounts data before considering the effect of the earthquake in Lorca, Murcia, for evaluating target compliance. ** Excluding 2008-2009 Settlements of the regional financing system for 2010-2011 Source: IGAE, MINHAFP. 24

Government consumption (y-o-y %) Budgetary policy and expenditure by economic classification Public sector employees (millions) Source: INE (current prices), IGAE, MINHAFP Source: INE, LFS IQ 2018 General Government (M ) 1996 2000 2004 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018f 2019f 2020f 2021f Government consumption 85,609 108,113 147,817 191,042 209,539 221,046 221,737 219,709 205,293 201,899 202,048 208,923 210,894 214,835 219,509 224,863 230,793 237,599 Compensation of employees 53,087 64,995 84,489 107,445 118,136 125,564 124,884 122,601 113,925 114,711 115,206 119,356 121,325 122,781 125,237 128,206 131,956 136,383 Interest 20,192 26,016 38,688 54,226 59,220 61,033 61,055 61,311 58,639 54,778 55,190 57,474 56,973 58,186 59,450 60,939 62,157 63,401 Gross capital formation 24,541 20,424 17,101 16,892 17,286 18,379 20,279 26,356 30,962 35,656 36,055 33,281 31,405 29,836 28,636 29,111 29,693 30,287 General Government (M ) 17,788 23,716 34,130 50,201 51,496 55,142 50,662 39,649 25,901 23,094 22,243 26,965 21,384 23,188 27,281 26,090 27,087 28,472 Source: IGAE, MINHAFP 25

Budgetary policy and expenditure by economic classification Interest (y-o-y %) Compensation of employees (y-o-y %) Gross capital formation (y-o-y %) Intermediate Consumption (y-o-y %) Source: IGAE, MINHAFP 26

Budgetary policy and expenditure by economic classification SPAIN Expenditure General Government (% GDP) General Government (%GDP) 1996 2000 2004 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018f 2019f 2020f 2021f Public consumption 17.5 16.7 17.2 17.7 18.8 20.5 20.5 20.5 19.7 19.7 19.5 19.3 18.9 18.5 18.1 17.8 17.5 17.3 Compensation of employees 10.9 10.1 9.8 9.9 10.6 11.6 11.6 11.5 11.0 11.2 11.1 11.1 10.8 10.6 10.3 10.1 10.0 9.9 Intermediate Consumption 4.1 4.0 4.5 5.0 5.3 5.7 5.6 5.7 5.6 5.3 5.3 5.3 5.1 5.0 4.9 4.8 4.7 4.6 Social Transfers in kind 2.1 2.3 2.5 2.4 2.6 2.9 2.9 2.9 2.7 2.7 2.7 2.6 2.6 2.6 2.5 2.5 2.4 2.4 Social Transfers paid 13.1 11.7 11.6 11.5 12.3 14.4 15.1 15.3 16.2 16.6 16.5 15.8 15.5 15.3 15.2 15.2 14.9 14.7 Interest 5.0 3.2 2.0 1.6 1.5 1.7 1.9 2.5 3.0 3.5 3.5 3.1 2.8 2.6 2.4 2.3 2.3 2.2 Subsidies 1.0 1.2 1.0 1.1 1.1 1.2 1.1 1.1 1.0 1.0 1.1 1.1 1.0 1.0 1.0 0.9 0.9 0.9 Other current expenditure 1.4 1.6 1.6 1.6 1.8 1.9 1.7 1.8 1.7 1.8 1.7 1.5 1.6 1.5 1.4 1.4 1.3 1.3 Gross fixed capital formation 3.6 3.7 4.0 4.6 4.6 5.1 4.7 3.7 2.5 2.3 2.1 2.5 1.9 2.0 2.2 2.1 2.1 2.1 Expenditure (excluding other capital expenditure) Source: IGAE, MINHAFP 41.3 37.7 36.9 37.7 39.8 44.5 44.6 44.5 43.6 44.5 43.9 43.0 41.4 40.4 39.9 39.2 38.5 38.0 27

Latest budgetary execution data available Net lending (+)/net borrowing (-) (M ; %GDP) Feb-17 Feb-18 Feb 18-17 Feb 18/17 Feb-17 Feb-18 Feb 18-17 Million y-o-y % % GDP Change p.p Central Government -11,186-10,796 390-3.5-0.96-0.89 0.07 Regional Governments -1,384-566 818-59.1-0.12-0.05 0.07 Social Security 1,479 1,407-72 -4.9 0.13 0.12-0.01 Balance General Gov.* -11,091-9,955 1,136-10.2-0.95-0.82 0.13 Revenue General Gov. 55,170 58,958 3,788 6.9 4.74 4.86 0.12 Expenditure General Gov* 66,454 68,955 2,501 3.8 5.71 5.68-0.03 (*)General Government excluding Local governments. Central gov. non including -44 M financial assistance in 2018 ( and -193 M in 2017) Q4 2016 Q4 2017 Q4 17-16 Q4 17/16 Q4 2016 Q4 2017 Q4 17-16 Million y-o-y % % GDP Change p.p Local Gov. Balance 6,847 6,812-35 -0.5 0.61 0.59-0.03 Mar-17 Mar-18 Mar 18-17 Mar 18/17 Mar-17 Mar-18 Mar 18-17 Million y-o-y % % GDP Change p.p State Balance (Estado) -5,207-4,459 748-14.4-0.45-0.37 0.08 State revenue 41,850 45,363 3,513 8.4 3.60 3.74 0.14 State expenditure 47,057 49,822 2,765 5.9 4.04 4.11 0.06 Primary balance 1,123 1,586 463 41.2 0.10 0.13 0.03 Source: IGAE 28

Tax policy and Tax bases TAX BASES: % change (y-o- y) 2011 2012 2013 2014 2015 2016 2017 On income -1.4-3.1 0.7 1.7 2.0 4.4 5.3 Gross households income 0.4-4.4-1.3 0.3 3.4 3.3 4.2 Corporate income tax base -15.2 8.0 16.5 10.7-6.7 11.1 11.7 On expenditure -4.3-3.4-6.0 3.7 3.3 3.1 6.2 Final expenditure subject to VAT -5.8-4.5-6.1 4.9 4.5 4.4 6.5 Consumption subject to excise duties 4.0 1.7-5.6-1.9-2.8-4.0 4.5 Total tax bases on income and expenditure -2.7-3.2-2.2 2.5 2.5 3.8 5.6 Source: AEAT 29

Fiscal Policy and domestic demand (II): Gross Revenue Large Corporations and SMEs receipts 2015 2016 2017 2018 2015 2016 2017 (M ) % (M ) % (M ) % Jan- Feb-18 IV.15 I.16 II.16 III.16 IV.16 I.17 II.17 III.17 IV.17 TOTAL 143,271 1.8 147,174 2.7 158,573 7.7 5.6-0.5-0.4-5.8 2.6 12.3 7.1 15.9 8.0 2.3 Large corporations and groups 102,347-0.1 104,045 1.7 111,248 6.9 4.9-2.7-1.7-9.9 1.4 13.7 6.5 18.0 7.9-0.6 SMEs 40,924 6.8 43,129 5.4 47,325 9.7 6.5 6.2 2.6 5.5 5.2 8.2 8.3 11.2 8.2 11.2 Payroll witholdings 45,177-0.6 45,424 0.5 47,709 5.0 7.5-4.7-3.8 0.9 1.7 4.3 4.6 3.8 5.2 6.6 Large corporations and groups 30,507-0.3 30,796 0.9 31,999 3.9 7.0-4.0-2.7 1.1 2.1 4.1 3.8 2.1 4.4 5.5 SMEs 14,670-1.1 14,628-0.3 15,710 7.4 8.1-6.0-5.9 0.4 1.0 4.8 6.4 7.5 7.0 8.8 Instalment payments PIT 1,996 12.7 2,541 12.9 2,735 7.6 6.6 13.1 14.1 13.1 13.7 10.9 8.1 8.3 6.6 7.5 Instalment payments CIT 18,272 4.4 19,652 7.6 21,299 8.4-1.3-50.0 31.3 109.9-7.6 Large corporations and groups 16,436 3.3 17,420 6.0 18,446 5.9-3.1-56.5 31.9 132.6-11.5 SMEs 1,835 15.1 2,232 21.6 2,853 27.8 17.9 11.1 25.7 25.9 28.5 VAT (gross)* 77,571 2.3 79,557 2.6 86,831 9.1 4.5 1.9 1.4 2.4 2.7 3.8 8.6 10.1 9.6 8.3 Large corporations and groups** 55,403-1.0 55,829 0.8 60,803 8.9 3.8-1.7-1.1 0.4 1.0 2.9 8.1 9.3 9.8 8.4 SMEs 22,168 11.5 23,728 7.0 26,028 9.7 5.5 11.5 7.9 7.5 7.0 5.9 9.5 12.2 9.1 8.2 * SII effect corrected ** Import VAT included. Source: AEAT 30

(% y-o-y) Economic indicators of the Spanish Fiscal Agency (AEAT) Sales, Employment and Wages of Large Enterprises 2011 2012 2013 2014 2015 2016 2017 2018 oct-17 nov-17 dic-17 ene-18 feb-18 Sales, calendar and seasonal adjusted and deflated Total sales -3.6-6.7-2.1 3.7 5.7 3.4 3.7 3.5 3.7 3.6 3.6 3.0 4.0 -Exports 6.3 0.7 2.5 5.9 8.6 3.7 5.5 5.0 5.1 3.7 4.0 3.8 6.2 -Imports 7.1-8.1 0.1 8.7 7.0 2.9 3.0 3.3 4.5 4.3 2.6 3.7 2.9 * Domestic sales -5.8-8.5-3.3 3.0 4.8 3.3 3.1 3.3 3.1 3.4 3.4 3.2 3.4 - Consumption -1.9-4.1 0.0 2.5 7.7 7.3 2.8 3.0 2.0 4.2 3.2 1.9 4.2 Goods -2.9-3.6-1.0 2.1 8.9 6.4 2.6 2.6 0.9 4.1 4.8 0.5 4.8 Services 0.6-5.2 2.7 3.4 4.7 9.4 3.5 4.0 5.1 4.5-1.0 5.3 2.7 - Capital -14.8-21.3-10.8 3.9 6.0 2.3 2.5 7.2 4.8 3.5 3.6 7.4 6.9 Equipment and software -3.3-9.8 5.2 10.4 7.2 4.1 3.6 8.5 4.7 4.6 6.2 8.3 8.7 Construction -21.7-29.8-26.2-5.0 4.1-0.6 0.6 4.8 5.1 1.6-0.8 5.9 3.7 - Intermediate goods -4.5-6.9-2.8 3.1 3.7 2.3 3.4 2.7 3.1 3.2 3.4 2.8 2.6 Employment and salaries Recipients of revenue for work -0.3-3.7-2.8 1.1 3.1 3.2 3.6 3.5 3.6 3.5 3.4 3.4 3.5 Average gross earnings 1.2-0.3-0.1-0.4 0.4 0.2-0.1 0.8 0.3 0.3 0.3 0.8 0.8 Source: AEAT. 31

Public Sector Reform Accountability Transparency Expenditure rule, debt ceiling and target deficit of all levels of government. Reduced risk of breaching rules by the followup procedure of the Payments to Suppliers General State Controller provided with new instruments (adjustment plans and Treasury adjustment), in exchange for liquidity (Liquidity mechanisms). Budgetary control reinforced by mutualisation of the Regional and Local government's debt. Independent assessment of effective compliance of the budget stability principle (AIREF). Recovery of the Local Government civil servants with national qualification. Monthly reporting on the budgetary execution. Publication of the Economic and Financial rebalancing plans. Institutionalization of national accounts compiling. (Technical Committee of National Accounts). Providing new information such as: period of payment to suppliers,treasury plans, staff, health expenditure, Public sector bodies... Sanctions regime derived from the non compliance with the provision of information. Local Governments competences are limited depending on the financial resources at their disposal. New regime includes new criminal offenses (penal code reform) and administrative (Transparency Law). 32

Debt by Regions(% GDP) Map of debt by Regions 2007 2017 Var Andalucía Aragón Asturias Baleares Canarias Cantabria Castilla y Castilla-La Cataluña Extremadura Galicia Madrid Murcia Navarra País La Valencia TOTAL León Mancha Vasco Rioja Regions M 7,177 1,165 744 1,798 1,562 434 1,894 1,829 15,776 785 3,712 10,103 648 645 642 276 11,906 61,096 %GDP 4.8 3.4 3.2 6.9 3.7 3.4 3.4 4.7 7.8 4.5 6.6 5.2 2.3 3.6 1.0 3.5 11.3 5.7 M 34,260 7,959 4,244 8,802 7,044 3,033 11,870 14,430 77,740 4,401 11,210 32,783 8,795 3,628 10,149 1,570 46,187 288,105 %GDP 22.1 22.1 18.7 29.4 15.9 23.2 20.8 36.0 34.8 23.8 18.4 14.9 29.0 18.3 14.1 19.3 42.5 24.8 M 27,083 6,794 3,500 7,004 5,482 2,599 9,976 12,601 61,964 3,616 7,498 22,680 8,147 2,983 9,507 1,294 34,281 227,009 p.p 17.3 18.7 15.5 22.5 12.2 19.8 17.4 31.3 27.0 19.3 11.8 9.7 26.7 14.7 13.1 15.8 31.2 19.1 Source: Bank of Spain 33

Map of deficit by Regions Deficit by Regions(% GDP) 2007 2017 Var. Andalucía Aragón Asturias Baleares Canarias Cantabria Castilla y Castilla-La Cataluña Extremadura Galicia Madrid Murcia Navarra País La Valencia TOTAL León Mancha Vasco Rioja Regions M 453-58 -6-495 64 4-257 -113-1,728 95-11 1-30 138 725-80 -1,282-2,580 %GDP* 0.30-0.17-0.03-1.89 0.15 0.03-0.46-0.29-0.85 0.54-0.02 0.00-0.11 0.77 1.11-1.00-1.22-0.24 M -335-333 -71 144 295-49 -541-288 -1,243-163 -124-1,025-457 241 1,074-32 -796-3,703 %GDP -0.22-0.92-0.31 0.48 0.67-0.37-0.95-0.72-0.56-0.88-0.20-0.47-1.51 1.22 1.50-0.39-0.73-0.32 M -788-275 -65 639 231-53 -284-175 485-258 -113-1,026-427 103 349 48 486-1,123 p.p -0.52-0.75-0.28 2.37 0.52-0.40-0.49-0.43 0.29-1.42-0.18-0.47-1.40 0.45 0.39 0.61 0.49-0.08 Source: IGAE * In the calculation of % GDP it has been used the data published by the IGAE in regional accounts updated by applying the regional GDP published by the Bank of Spain for that year. (In 2007 the deficit was calculated on the national GDP ). 34

Real GDP by Regions(y-o-y %) Map of real GDP by Regions Andalucía Aragón Asturias Baleares Canarias Cantabria Castilla y Castilla-La Cataluña Extremadura Galicia Madrid Murcia Navarra País La Valencia TOTAL León Mancha Vasco Rioja Regions 2007 y-o-y % 3.78 4.72 3.03 3.46 3.18 2.95 3.34 5.88 3.48 4.22 4.31 4.09 4.43 3.59 3.17 4.14 3.37 3.77 2017 y-o-y % 2.71 3.59 3.48 2.75 2.91 3.20 1.93 2.51 3.29 2.44 3.09 3.41 3.35 2.83 3.05 1.79 3.18 3.24 Var. p.p. -1.07-1.13 0.45-0.71-0.27 0.25-1.41-3.37-0.19-1.78-1.22-0.68-1.08-0.76-0.12-2.35-0.19-0.53 Source: Bank of Spain 35

Map of nominal GDP per capita by Regions Nominal GDP per capita by Regions(Euros) Andalucía Aragón Asturias Baleares Canarias Cantabria Castilla y Castilla-La Cataluña Extremadura Galicia Madrid Murcia Navarra País La Valencia TOTAL León Mancha Vasco Rioja Regions 2007 Euros 18,459 26,141 21,759 25,502 21,167 22,436 22,082 19,322 28,124 16,102 20,470 31,617 19,923 29,451 30,259 25,492 21,610 23,893 2017 Euros 18,470 27,403 22,046 25,772 20,425 22,513 23,555 19,681 29,936 17,262 22,497 33,809 20,585 30,914 33,088 26,044 22,055 24,999 Var Euros 11 1,262 287 270-742 77 1,473 359 1,812 1,160 2,027 2,192 662 1,463 2,829 552 445 1,106 % 0.1% 4.8% 1.3% 1.1% -3.5% 0.3% 6.7% 1.9% 6.4% 7.2% 9.9% 6.9% 3.3% 5.0% 9.3% 2.2% 2.1% 4.6% Source: Bank of Spain 36

Liquidity measures Total amount of Liquidity mechanisms to Local and Regional Governments: 268.9 bn 70% 70% of the total of the liquidity measures intended to fund Social Policies 2012-2014: 133.9 bn Suppliers payment financing plan: 41.8 bn 2012: 27.3 bn 2013: 6.5 bn 2014: 8.0 bn ICO Line 2012: 5.4 bn Liquidity Fund: 62.8 bn 2012: 16.6 bn 2013: 22.9 bn 2014: 23.2 bn Other measures: 23.9 bn 2012: 10.6 bn 2013: 7.8 bn 2014: 5.5 bn 37

Liquidity measures 2015: 50.0 bn 2016: 36.1 bn Financing Funds: 38.5 bn Financial Facility: 14.3 bn Liquidity Fund: 22.8 bn Social Fund: 0.683 bn Fund for financing Local Govs.: 0.7 bn Financing Funds: 31,9 bn Financial Facility: 3.0 bn ( 0.4 bn due to 0.3% to 0.7% target) Liquidity Fund: 28.2 bn 1Q: 5.3 bn 2Q: 2.7 bn 3Q: 2.8 bn 4Q: 9.1 bn Extra FLA: 6.0 bn ( 4.3 bn Extra FLA I + 1.6 bn Extra FLA II) 0.3% to 0.7% targets: 2.4 bn Fund for financing Local Govs.: 0.7 bn Other measures 2015: 11.5 bn Other measures 2016: 4.2 bn The amounts of the FFCCAA 2015 and FFCCAA 2016, are amounts arranged Fuente: MINHAFP. 38

Liquidity measures 2017: 29.4 bn 2018: 1Q + 2Q 19.4 bn Financing Funds: 28.3 bn Financial Facility: 3.6 bn Financing Funds: 18.6 bn Financial Facility: 6.2 bn Liquidity Fund: 24.0 bn: 1Q: 5.9 bn 2Q: 4.0 bn 3Q: 5.7 bn 4Q: 6.3 bn Extra FLA: 2.1 bn Liquidity Fund: 11.4 bn: 1Q: 7.4 bn 2Q: 3.9 bn Fund for financing Local Govs.: 0.7 bn Fund for financing Local Govs.: 1.0 bn Other measures 2017: 1.1 bn Other measures 2018: 0,8 bn Fuente: MINHAFP. The amounts of the FFCCAA 2017 are amounts arranged. The amounts of the FFCCAA 2018 are amounts assignated by CDGAE Fuente: MINHAFP. 39

COMMERCIAL DEBT (M ) EDP DEBT (M ) 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 Andalucía 2,346.60 2,310.40 1,613.47 1,376.36 632.72 599.30 21,064.36 24,440.87 29,372.78 31,644.88 33,324.75 34,259.72 Aragón 329.83 505.90 456.64 346.94 143.61 203.87 4,606.80 5,368.72 6,009.61 6,930.02 7,486.48 7,958.79 Asturias 1.57 196.08 141.51 211.77 201.91 151.75 2,675.18 3,051.92 3,479.01 3,876.34 4,103.03 4,244.38 Illes Balears 47.80 752.69 203.41 288.29 191.75 196.70 6,130.27 6,883.85 7,798.40 8,329.67 8,572.76 8,801.74 Canarias 422.50 573.91 263.08 167.17 238.27 173.37 4,686.71 5,281.25 6,034.20 6,669.08 6,938.83 7,044.23 Cantabria 18.97 86.08 139.27 157.66 175.26 206.45 2,032.34 2,177.84 2,427.74 2,677.39 2,889.56 3,033.41 Castilla y León 14.07 274.68 473.02 390.72 140.42 190.01 7,933.15 8,527.35 9,359.01 10,557.18 11,316.34 11,869.63 Castilla-La Mancha 886.21 946.57 317.08 219.89 140.41 156.28 10,189.68 11,343.20 12,858.39 13,425.98 14,054.52 14,429.53 Cataluña 2,070.06 3,166.45 2,145.10 1,597.75 1,643.90 1,733.29 52,354.61 58,179.43 64,466.19 72,675.02 75,117.85 77,739.71 Extremadura 387.55 453.39 324.95 290.58 98.33 150.56 2,435.57 2,630.14 3,091.93 3,576.28 4,059.09 4,401.44 Galicia 0.00 0.00 257.05 535.67 392.65 110.39 8,323.75 9,212.38 9,960.90 10,375.09 10,853.91 11,210.13 Madrid 1,789.81 894.47 1,053.41 1,410.54 1,088.56 446.67 20,906.25 22,863.08 25,414.10 28,685.96 30,417.32 32,783.02 Región de Murcia 689.75 761.61 223.27 324.29 314.51 259.72 4,627.70 5,542.58 6,837.83 7,600.87 8,305.15 8,794.60 C.F. De Navarra 0.00 0.00 82.49 87.17 96.41 106.39 2,847.14 3,136.08 3,197.28 3,321.85 3,460.79 3,628.36 País Vasco 0.00 0.00 231.69 244.47 260.51 240.54 7,259.29 8,279.94 8,914.97 9,485.57 9,958.50 10,149.06 La Rioja 0.00 107.58 101.64 83.07 76.13 94.89 1,044.51 1,142.64 1,296.29 1,435.64 1,487.43 1,569.77 C.Valenciana 2,114.90 4,199.19 1,446.40 1,262.12 937.42 790.11 30,065.43 32,458.75 37,422.44 42,002.66 44,662.90 46,187.21 TOTAL Regions 11,119.61 15,228.99 9,473.45 8,994.45 6,772.77 5,810.28 189,182.74 210,520.01 237,941.06 263,269.48 277,009.19 288,104.70 Source: Bank of Spain. MINHAFP Commercial Debt and EDP Debt by Regions (M ) Debt by Regions (2012-2017) 40

Territorial financing system Territorial financing system by Regions (M ) Regions 2010 2011 2012 2013 2014 2015 2016 2017 2018 (PGE2018) Cataluña 15,773.15 15,268.52 15,458.06 15,477.64 14,875.59 15,362.89 17,368.96 18,717.51 19,141.79 Galicia 6,438.82 6,070.97 6,080.13 6,210.27 5,998.88 6,323.25 6,786.25 7,094.02 7,383.80 Andalucía 16,586.06 15,468.46 14,915.91 15,404.04 15,023.00 15,408.68 17,241.14 18,329.00 18,954.52 Asturias 2,412.39 2,293.90 2,303.84 2,328.56 2,252.83 2,388.44 2,521.26 2,597.06 2,722.41 Cantabria 1,421.22 1,430.54 1,462.55 1,502.39 1,460.50 1,529.86 1,581.05 1,709.30 1,783.97 La Rioja 754.93 782.66 792.51 796.95 770.18 816.83 892.04 932.97 945.47 Murcia 2,663.61 2,506.19 2,483.95 2,547.63 2,465.43 2,573.51 2,857.24 3,073.03 3,203.09 Valencia 8,722.02 8,042.51 8,321.29 8,359.91 8,029.00 8,077.08 9,098.98 10,091.82 10,172.70 Aragón 2,917.75 2,894.39 2,859.09 2,907.20 2,830.50 2,930.86 3,136.75 3,329.10 3,551.91 Castilla-La Mancha 4,321.43 4,142.46 4,109.75 4,170.70 3,978.90 4,242.95 4,472.18 4,657.19 4,895.03 Canarias 4,120.31 3,786.06 3,477.33 3,632.41 3,600.15 3,710.84 3,936.13 4,466.50 4,876.61 Extremadura 2,728.80 2,513.30 2,441.38 2,509.26 2,489.05 2,636.79 2,855.90 2,954.09 3,032.44 Baleares 1,793.82 1,616.39 1,968.70 1,960.14 1,897.50 2,059.25 2,187.10 2,414.61 2,575.74 Madrid 11,084.97 11,755.29 12,334.21 11,323.15 10,952.19 11,605.22 12,525.84 13,473.06 14,333.99 Castilla León 5,849.02 5,523.06 5,514.33 5,602.15 5,330.01 5,600.29 5,957.39 6,164.94 6,430.39 Total general 87,588.30 84,094.69 84,523.02 84,732.39 81,953.70 85,266.75 93,418.22 100,004.21 104,003.84 41

Regions Advance payments 2016 2017 2018 (PGE 2018) 2014 territorial financing system settlements (including convergence funds) Total 2016 advance payments Territorial financing system: 2016-2018 Territorial financing system by Regions(M ) 2015 territorial financing system settlements (including convergence funds) Total 2017 advance payments Reimbursement of 2009 negative territorial financing system settlements extended to 204 installments Reimbursement of 2009 negative territorial financing system settlements extended to 204 installments Reimbursement of 2009 negative territorial financing system settlements extended to 204 installments 2016 territorial financing system settlements (including convergence funds) Cataluña 15,942.49-124.79 1,551.27 17,368.96 16,962.95-124.79 1,879.36 18,717.51 17,648.09-124.79 1,618.49 19,141.79 Galicia 6,457.93-84.81 413.13 6,786.25 6,750.92-84.81 427.91 7,094.02 7,026.13-84.81 442.47 7,383.80 Andalucía 16,385.30-223.26 1,079.09 17,241.14 17,315.01-223.26 1,237.25 18,329.00 18,084.66-223.26 1,093.11 18,954.52 Asturias 2,383.08-29.85 168.03 2,521.26 2,505.57-29.85 121.34 2,597.06 2,576.18-29.85 176.08 2,722.41 Cantabria 1,562.39-19.12 37.78 1,581.05 1,639.97-19.12 88.45 1,709.30 1,698.69-19.12 104.40 1,783.97 La Rioja 846.85-9.88 55.07 892.04 884.33-9.88 58.52 932.97 904.86-9.88 50.49 945.47 Murcia 2,635.58-29.25 250.91 2,857.24 2,813.18-29.25 289.11 3,073.03 2,952.58-29.25 279.76 3,203.09 Valencia 7,875.24-91.24 1,314.98 9,098.98 8,502.70-91.24 1,680.36 10,091.82 8,695.94-91.24 1,568.00 10,172.70 Aragón 2,979.66-35.38 192.47 3,136.75 3,199.71-35.38 164.77 3,329.10 3,314.73-35.38 272.56 3,551.91 Castilla-La Mancha 4,287.04-51.30 236.43 4,472.18 4,470.03-51.30 238.46 4,657.19 4,627.79-51.30 318.54 4,895.03 Canarias 3,790.63-56.59 202.08 3,936.13 4,046.10-56.59 476.99 4,466.50 4,253.81-56.59 679.38 4,876.61 Extremadura 2,707.70-39.79 187.99 2,855.90 2,815.03-39.79 178.85 2,954.09 2,904.46-39.79 167.77 3,032.44 Baleares 1,521.62-12.68 678.16 2,187.10 1,717.58-12.68 709.71 2,414.61 1,809.90-12.68 778.52 2,575.74 Madrid 11,711.23-55.02 869.64 12,525.84 12,789.67-55.02 738.41 13,473.06 13,305.63-55.02 1,083.37 14,333.99 Castilla León 5,667.42-73.87 363.84 5,957.39 5,924.58-73.87 314.23 6,164.94 6,109.22-73.87 395.05 6,430.39 Total general 86,754.17-936.83 7,600.88 93,418.22 92,337.33-936.83 8,603.71 100,004.21 95,912.68-936.83 9,027.99 104,003.84 Total 2018 42

Total Liquidity to Regions and Local Governments LIQUIDITY MECHANISMS GRANTED TO LOCAL AND REGIONAL GOVERNMENTS, YEARS 2012, 2013, 2014, 2015, 2016, 2017 and 2018. TOTAL TOTAL TOTAL TOTAL TOTAL TOTAL TOTAL LIQUIDITY LIQUIDITY LIQUIDITY LIQUIDITY LIQUIDITY LIQUIDITY 2017 LIQUIDITY 2018 2012 2013 2014 2015 2016 TOTAL LIQUIDITY 2012-2018 ANDALUCIA 10,167.83 6,947.84 6,366.07 5,345.15 4,994.07 4,617.87 3,029.75 41,468.59 ARAGON 840.50 105.08 228.65 1,626.69 1,129.18 924.40 525.33 5,379.84 CAST, LA MANCHA 5,339.37 1,608.58 2,442.40 2,033.39 2,033.48 1,846.85 846.59 16,150.67 CASTILLA - LEON 1,860.33 223.54 197.10 2,355.93 211.30 612.18 836.55 6,296.93 CATALUÑA 12,920.44 14,771.06 11,102.11 14,167.79 10,789.85 7,957.57 5,892.99 77,591.82 CANARIAS 1,731.64 1,076.68 1,027.08 1,349.07 1,346.78 572.90 407.89 7,512.03 EXTREMADURA 511.23 144.62 441.84 930.63 918.87 560.36 223.33 3,730.87 GALICIA 637.16 252.25 228.90 1,917.46 2,051.52 2,112.22 862.98 8,062.50 C. VALENCIANA 14,404.67 6,355.84 9,673.48 10,889.69 7,799.89 5,902.96 3,547.90 58,574.42 ASTURIAS 734.27 696.71 159.40 745.86 87.76 336.85 262.94 3,023.78 BALEARS (ILLES) 2,084.45 1,678.35 1,793.44 1,673.06 1,551.01 1,286.11 813.94 10,880.36 CANTABRIA 624.63 378.31 396.00 572.88 511.65 527.83 252.13 3,263.43 MADRID 4,379.68 826.91 133.60 2,058.29 212.22 0.00 0.00 7,610.69 MURCIA 2,262.02 1,413.47 1,789.35 1,492.14 1,662.10 1,464.11 603.15 10,686.34 RIOJA (LA) 138.19 65.05 25.90 372.85 90.71 0.00 251.81 944.52 PAIS VASCO 0.0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 NAVARRA 0.0 1.16 0.00 0.00 0.00 0.00 0.00 1.16 Ceuta 82.12 0.00 0.00 0.00 0.00 0.00 0.00 82.12 TOTAL in the Regions* 58,718.54 36,545.44 36,005.33 47,530.89 35,390.40 28,712.21 18,357.28 261,260.08 Local Governments 1,255.40 671.50 684.59 2,512.00 749.71 731.55 1,000.00 7,604.76 Total liquidity mechanisms Regional and EELL 59,973.94 37,216.94 36,689.92 50,042.89 36,140.11 29,443.75 19,357.28 268,864.84 Including suppliers financing plan by Local Government in the region. The amounts are arranged except FFCCAA2018 that are amounts assigned by CDGAE Source: MINHAFP M 43