Spain Business Brief - Thursday July 3 2008
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By h.b. - Jul 3, 2008 - 12:44 PM
Consumer confidence in Spain takes a dive.

The Consumer Confidence Index in Spain has sunk after what is being described as a disastrous June. The index has fallen from 92 to 51 points over the past year, now standing at 51.7 an all-time low. Inflation, unemployment and a fall in consumer spending have all affected the confidence of the citizens in the economy. Confidence was also hit by the lorry driver’ strike and the ever increasing petrol and diesel prices.
The Euribor index, used for the setting of mortgage payments was also at an all-time high at 5.361% upping the monthly outgoings for many.
It comes as the Prime Minister, José Luis Rodríguez Zapatero, admitted ‘serious difficulties’ in Congress yesterday, while avoiding the word ‘crisis’, and denying that the country was heading to a recession.
All this comes as a barrel of Brent has today reached more than 145 dollars on the market.
Experts have warned that if the European Central Bank rises interest rates as they have said they will do, that will increase the weakness of the dollar and send oil prices even higher.

The sacking of 353 workers from the Urazca real estate company has been authorised following the problems in the company which suspended payments back in May. Under the deal done with the unions those who have lost their jobs will be paid 39 days pay for each year worked, with a maximum of 24 months.

The Financial Times today reports that Iberia, British Airways and American Airlines are negotiating a new transatlantic alliance.
The objective is to share a large part of their activities in order to save costs, as a way to side-step the crisis which has hit the airlines because of the high price of petrol.
The airlines consider the recent ‘open skies’ deal represents an opportunity for them, but now they have to get the backing of the competition authorities. The inclusion of Iberia in the deal is being seen as key as a link between Europe and Latin America.

Clients of the Unión Fenosa and Iberdrola companies who were charged some 100 € for a change of contract after the Government ended the off-peak night time electricity rate and introduced the new ‘Tarifa Ahorro’, have been told that they can claim back the charge. The consumers’ office in the Madrid regional government took action after receiving hundreds of complaints and now the ruling has come that the charge has to be paid back to the consumers. It’s thought that as many as 200,000 people and companies may have been affected.

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