Spain Business
Spain Business Brief - Wednesday September 3 2008
By h.b. - Sep 3, 2008 - 12:26 PM
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The Minister for Employment and Immigration, Celestino Corbacho, has said that the INEM employment agency could move into the red because of the costs of increased unemployment. However he said that employment protection in Spain was guaranteed, but the next few months would be ‘hard and complicated’.
The INEM currently has a surplus, but that is expected to be used up shortly, when the State will guarantee that unemployment payments are made. It comes after yesterday’s news that unemployment in Spain has increased by 25% over the past 12 months.
Despite the current economic situation, one of the main indexes on consumer confidence issued by the Official Credit Institute, has reported an increase in confidence after reaching a record low in July. Experts say that some people are now more confident in August after having finally seen a fall in the oil price. The consumer confidence index is now at 51.4, up 9.4 points on the month. It follows six consecutive previous months of falls.
Following on from news earlier of a 41% fall in new cars, now the sale of motorbikes are reported to be 21% lower for the first eight months of the year compared to last year for the same time. An increase in the costs of registering a new bike has not helped matters.
The grand leisure and casino project planned for Ciudad Real and known as ‘El Reino de Don Quijote’, is now on hold. Investment company Harrah’s has postponed the spending of 6.5 billion over 15 years, because of the real estate market in Spain and the lack of capital now seen in Europe which company Executive President, Gary Loveman, said was even worse than in the United States.
One of the stranger effects of the economic slowdown is that some 5% of divorced couples are opting to carry on living together as they cannot sell their home. Divorce lawyers are describing the situation as serious, and the company seperacion.com notes that more and more divorced couples are living under the same roof until the property is sold. What’s more in that situation few couples agree on reducing the price of the flat in an effort to get a sale. Official figures show September to be the busiest month for divorces in Spain.
The economic crisis has also affected the investments of the Catholic Church in Spain. El Economista reports that the Church has decided to dissolve its largest investment company, Umasges which controlled funds of more than 10 million €. It means the end to a decade long adventure on the stock market for the Church in Spain.
The slowdown has also seen us use our credit cards more. There are now 43 million credit cards in circulation in Spain, almost triple the number in the year 2000, and their use is up 10% for the first quarter of this year compared to last. Average commissions charged for cards in Spain is reported to be about 30 € a year.
Interestingly debit cards have reduced 5% in number over the past four years in Spain.
Telefónica has announced that it now has more than 150 million clients in Latin America. The company says that it has hit the number a year earlier than its target which was the end of 2009. Now Telefónica is wanting to consolidate its position in China where it has a 10% share in the company formed by the merger between China Netcom and Unicom.
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