Abstract
This paper analyses and models the formation of the interest rates in the Eurozone, in particular the Euribor. The analysis includes the revision of the different theories about the determination of interest rates (financial, credit and savings) among which we select the most relevant indicators. The model explains the Euribor evolution through the changes in prices, public deficit, money supply and foreign interest rates. The model gives evidence of the imbalance between the Euribor and the needs of the Spanish economy for the last 12 years.
