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Elsewhere, the government was forced to adopt a series of internal adjustment measures during the year regarding taxes, public expenditure and labour policy. While the impact remains to be seen, these are obviously steps in the right direction judging by the responses of both markets and Spain’s main partners.

Also noteworthy was that at the date of authorisation for issue of these consolidated fnancial statements a number of legislative initiatives were underway (e.g. savings bank reform) afecting a large part of the fnancial sector. These initiatives will certainly bring about a major change to the rules of the game in this market.

Lastly, regarding the outlook for the Spanish economy in 2011, forecasts suggest there will not be any sustained recovery, with no powerful reason to expect GDP growth above 1%. This is hardly enough to have a major impact on job creation and, through this, to expect any meaningful improvement in consumption. We will also have to pay close attention to infation trends, above all the impact on the CPI of commodity prices, and to interest rates, which could see some upward pressure deriving from a pick-up in activity and infationary pressures in Eurozone core countries.

In short, 2011 is shaping up to be a year of transition, with limited scope for sufcient economic recovery to ensure growth in the main macroeconomic fgures.

TELECINCO: PREPARING FOR TAKE-OFF

The adverse economic backdrop caused demand for television advertising to fall more in 2008 and 2009 than at any time before, with prices plummeting as public TV benefted from a dual fnancing model and due to the excess supply of TV space.

In 2010, however, RTVE was legally obliged to stop airing commercials. This was a momentous event for commercial television, helping to partly reverse the inexorable decline in prices seen in previous years.

At Telecinco, our leadership position among commercial networks by audience and advertising sales prices left us poised to beneft from the partial rebound in prices seen in 2010; at the date of authorisation for issue of these consolidated fnancial statements, estimates pointed to growth of around 4% in TV advertising in Spain.

We cannot overlook the audience ratings achieved with the retransmission of the 2010 FIFA World Cup South Africa held in June and July, with Spain emerging as world champion.

If not proftable, the year’s major sporting events at least raise the broadcaster’s profle and audience levels to an extent that could not otherwise be achieved. Accordingly, this investment decision was capped with the ultimate success in sport: the Spanish team holding up the champion’s trophy.

Last year also featured the acquisition of 22% of the pay TV platform, Digital+, and 100% of Prisa’s free-to-air TV business, executing the preliminary agreement signed in 2009 and contingent on meeting certain suspensive conditions (e.g. authorisation by the anti-trust authorities). Telecinco acquired Digital+ through a capital increase with pre-emptive subscription rights and Prisa’s free-to-air TV business through a share swap, with the seller taking a non-controlling interest in Telecinco.

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GESTEVISION TELECINCO, S.A.