Spain Business
Spain Business Brief - Friday July 18 2008
By h.b. - Jul 18, 2008 - 9:11 PM
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The volume of so-called doubtful credits in financial institutions in Spain rose in May by 1.5% to take the annual increase to be 123% more than a year previously at 27.7 billion €. The numbers come from the Bank of Spain, and it means the bad debt rate is now 1.53% - up from 0.768% a year ago.
There are partial strike stoppages on the AVE high speed services across Spain today with minimum services set at 80%. 160 workers who are middle ranked Head of Trains, are protesting at plans from Renfe to do away with the category, and are also angry that 100% minimum services have been imposed on the line between Madrid and Málaga.
Reports are that some 800 passengers have had to change their bookings because of the action.
The European Central Bank has said that it will not change interest rates to help Spain, Ireland or Portugal, underlining that its main mission is to control inflation. Jean-Claude Trichet has said, in an interview with the ‘Irish Times’ that is was the same as the Federal Reserve in the United States not looking at the particular interests of Misuri, California or Texas.
The stock market regulatory body, the National Council for Monetary Values, has now revealed that the reported bid by a group of Mexican investors who were interested in the purchase of 30% of the Banco Popular through the Blueprime company, was ‘simply smoke’. The regulator will now determine if any crime has taken place in the incident comes 25 days later.
The high price of aviation fuel has lead to a cut back in operations in Spain from two low-cost airlines.
Spanair has decided that only Madrid and Barcelona will be future bases for its flights. As the airline outlines planned cutbacks as part of a viability plan in these days of high oil prices, it has become clear that the other bases of Spanair at Palma, Málaga, Tenerife, Bilbao and Las Palmas de Gran Canaria, will all lose that category. It means a centralisation of pilots, cabin staff and mechanics in the company.
Staff cuts of 1,100, some 29% of the workforce were announced earlier this week. The airline is also going to leave nine of its planes on the ground during September and October.
Ryanair has also given details of its cutbacks because of the increased fuel prices and the suspension of their services in Palma and Valencia as part of a 14% cutback in flights. Flights to another five Spanish destinations are also set to be suspended between November 4 and December 19.
Ryanair Chairman, Michael O’Leary, said that airport charges and the massive increase facing the company in fuel prices made it more profitable for Ryanair to leave planes on the ground during the time.
Troubled real estate business, Martinsa-Fadesa, which filed for bankruptcy protection last Tuesday, has said that it will complete and hand over the keys for 12,578 properties which are pending and for which families have already made payments. These properties have an estimated value of 2 billion €.
A statement from the company yesterday said they deeply regretted the current uncertainty, and promised to work intensely to overcome this ‘transitory situation’ in the shortest time possible. The company has also announced a halt to its building activities in Morocco.
A new telephone information line has been established by the company – 900 380 900.
The International Monetary Fund has reduced its forecast for the growth of the Spanish economy for 2009 to 1.2%. It’s half a point lower than previous forecasts, and shows they think the economic crisis is set to continue. The IMF keeps it growth prediction for this year at 1.8%.
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