Spain Business
Spain Business Brief - Tuesday March 16 2010
By h.b. - Mar 16, 2010 - 2:01 PM
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Miguel Sebastián - EFE
Industry Ministry says only a quarter of the IVA/VAT increase will be passed on to consumers
The Minister for Industry, Miguel Sebastián, has said that he thinks that only a quarter of the VAT increase set for July 1 will be passed on in the price. Elena Salgado has forecast half the increase will be passed on to consumers. The general rate rises from 16% to 18% but experts seem divided as to how this will affect consumers.
The Government is expected to win a vote on the matter in Congress this evening, following a challenge from the Partido Popular.
The fall in house prices in Spain moderated in 2009 according to the IPV housing price index. It shows a fall in price of 5.1% for new housing and 3.5% for resale property. Combined the average fall in price was 4.3%.
Prices fell in all regions of the country with the exception of Extremadura where they rose by 1.9%.
The latest quarterly figures have shown resale flats to have started to increase in price again by 0.1%.
The Bank of Spain has revealed that there are 62 billion € in bad debt still to come out of the real estate collapse. The Bank considers the banks in Spain can withstand a 35% fall in the value of property and land.
Despite the intervention announced yesterday into his Seguros Mercurio company, the Minister for Tax and the Economy, Elena Salgado, has said today that she recognizes the legitimacy of the company’s owner, Gerardo Díaz Ferrán, to continue as the Chairman of the employers’ organization, CEOE. She said it was the businessmen who had chosen him for the post.
Meanwhile a statement from Mercurio lamented that they had not been given more time to increase liquidity and finance.
It seems that as part of the role as EU presidency, Spain has been trying to enforce stricter controls on hedge funds. Now it seems the attempts have been abandoned as more agreement was wanted and the U.K. has shown most opposition to the plan, as home to most of the high risk funds in Europe.
Meanwhile the Government has admitted that the reorganization of the banking system here is going slowly. Elena Salgado has said she would like the process to go faster, and ‘hopes it speeds up over forthcoming months’.
The competition authority, CNC, has started investigating three agricultural associations in Almería for price fixing in the fruit and vegetable sector. ASAJA, COAG and the Asociación de Alhondiguitas will hear the results of the case in 18 months time.
And finally,
Movistar, the mobile phone division of Telefónica, has been voted the worst company of the year, according to a survey carried out by the consumers’ organization FACUA. 34% chose Movistar because of their ‘high tariffs and abusive practices’.
14,285 consumers voted and placed the now bankrupt Air Comet in second place.