Spain Business Brief - Tuesday July 8 2008
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By h.b. - Jul 8, 2008 - 1:05 PM
Deal done on merger between Vueling and Clickair

The largest low-cost air company in Spain has been created with the merger between Clickair and Vueling. Iberia will be owner of 45% of the shares in the new company which becomes the third in size in Spain. It will have a fleet of 45 planes, 300 flights a day on 112 routes and a workforce of 2020. The new company will keep the Vueling name and start to operate in 2009.

The number of 500 € notes in circulation in Spain has now fallen to its lowest level since 2006 at 110 million. That’s two million less than in January and February this year. The Bank of Spain says there are also fewer numbers of 100 and 50 € notes in circulation, with the number of 200 € notes stable at 21 million.

The Government has announced an urgent plan to save 5 billion €
in energy costs, although Minister for Industry, Miguel Sebastián did not make it clear how such savings would be made. The idea is to reduce Spain’s dependence on petrol by 10%.
Sebastián gave the news over a working breakfast and said that the plan was being drawn up in collaboration between six different ministries and that it was planned to be approved before the summer.

There was a sharp fall on the Spanish stock market this morning with prices down by 2% shortly after the start of the session. Experts say that the market was pulled down by falls on Wall Street yesterday taking the IBEX 35 to its lowest level of the year.

Rodrigo Rato, the ex P.P. Deputy who is now working in the private sector, that he sees the need for what he called ‘structural measures’ to stop the slowdown. Rato said that an economy could choose to gain competiveness at the price of losing employment, or other structural measures, which he said was a political and not economic decision.

Repsol YPF has announced a wish to reduce its exposure in Latin America and look to increase its interests in Russia. After problems with nationalisation in Bolivia and with problems extracting oil in Argentina, the company’s reserves in Latin America are now down 25%.

As things gets tighter Spanish families are saving less. Over the first quarter savings fell by 0.4% to 2.6% of income – at 4.24 billion €. Its 372 million € less savings than in the first quarter of 2007.

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