Spain Business
Spain Business Brief - Wednesday March 17 2010
By h.b. - Mar 17, 2010 - 5:14 PM
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The European Commission headquarters - EFE
The European Commission considers that the Spanish Government is too optimistic
The European Commission on Wednesday said it appreciated the efforts that Spain is taking to correct the public deficit, but described the forecasts and estimations of growth from the Government as ‘optimistic’. It said it wants to see more reforms from 2011, and invited Spain to give more information on its budgetary strategy, and called for more precision in the public finances and in pensions. The European Commission noted that public debt in Spain was ‘below 40% of GDP in 2008, rose to 55% in 2009 and will continue to increase to reach 74% of GDP in 2013.
Minister for Tax and the Economy, Elena Salgado, commented that several countries had received similar indications.
The IE business school has issued a report which claims that more than 400,000 businesses have closed in Spain since the start of the recession. It says the number of closures rose by 54% between July 2008 and the same month last year, and notes too that the number of women taking part in business initiatives fell by 35%.
Gerardo Díaz Ferrán, the Chairman of the CEOE employers’ organization and owner of the Seguros Mercurio company which the Government closed down this week, has been celebrating his first board meeting since the intervention.
He was met outside by the ‘Monques del Monasterio’ a debt collecting agency whose agents dress up as monks to draw attention to what they are doing. They had been contracted on behalf of the workers by the Sepla pilots union, following the collapse of another one of his businesses, Air Comet.
Meanwhile it has been revealed that Seguros Mercurio had invested with Lehman Brothers.
On a brighter note Díaz Ferrán has managed to obtain a credit injection of 44 million € for his troubled Marsans travel group.
Meanwhile Jesús Bárcenas, the representative for PYME small businesses in Spain has said that Díaz Ferrán no longer represents them.
The average cost of employing a worker in Spain has registered its smallest increase in four years, growing by 2.5% in 2009 to reach 2,649 €. In terms of the actual average wage the increase was 2.2% to reach 1,993 €.
British Airways are reported to have reached agreement with the unions on the future of the company’s pension fund, and this was the one obstacle to the planned merger with Iberia. BA says it will put 330 million pounds a year into the fund for the next three years. The merger deal with Iberia is now expected to be signed shortly.
The number of Spaniards who report having ‘serious difficulties’ in reaching the end of the month is at an all time high since figures began in 2003, according to the INE, National Statistics Institute, at 13.7%. One in three families now say they cannot meet unexpected costs, and 38.9% say they will not be able to take a week’s holiday.
And finally,
Inditex, the parent company of Zara and other clothing brands has said that it will not be passing on the VAT increase set for July 1 to its customers. It’s the sort of announcement the Government will be pleased to hear, with the company saying it will compensate for the additional VAT payments by being more efficient.