Spain Business Brief - Tuesday July 15 2008
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By h.b. - Jul 15, 2008 - 12:35 PM
House prices fall over the second quarter in Spain, for the first time as building firms take a serious hit on the Stock Market following the bankruptcy protection of Martinsa.

The price of freehold housing has fallen for the first time in the last quarter, according to data released today by the Spanish Ministry for Housing.
It’s the first time since the Ministry for Housing has issued the statistics that the price for housing has fallen from one quarter to the next, albeit by just 0.3%.
It means the annual increase in housing prices in Spain is up by 2%, some three points under the general IPC inflation rate at 5%.

Debate is served over the financing of the Spanish regions with their accounts being presented. Largest fiscal deficits are reported from Madrid, Baleares, Cataluña and Valencia. However the report presented by the Secretary of State for Hacienda and Budgets, Carlos Ocaña, show that these are the same regions which contribute most to ‘territorial solidarity’.

A new operation against tax evasion has been carried out today by the Civil Guard and the Agencia Tributaria tax authority across four Spanish provinces. The amount of the fraud could be as much as 200 million € with funds being diverted through private banks and investment agencies in Lichtenstein.
Investigations have been centred on Málaga, Barcelona, Zaragoza and Madrid.

The effect of the Martinsa company filing for bankruptcy protection has had an effect on the Spanish Stock Market today, with the Ibex heading south by more than 2% in early trading. Banco Popular, which has lent 400 million € to the company, has seen a 5% fall in its share price. Other builders, real estate companies and banks have been most affected by the falls.
Ferrovial was down by 10%, Sacyr by 8.3%, FCC by 5.29% and OHL by 4.7%.
Other main creditors to Martinsa are Caja Madrid and La Caixa, each of whom has lent 1 billion €.

The euro has reached a new record against the dollar today breaking the 1.6 dollars to Euro limit for the first time. It follows the doubts in the US market following the recovery of the mortgage banks Fannie Mae and Freddie Mac.

Electrical company Union Fenosa has announced a 27% jump in profits for the first six months of the year at 652 million. The company says the improvement is down to the general efficiency of the firm and extras obtained from the sale of assets at the start of the year.

Spanish Minister for Tax and the Economy, Pedro Solbes, is to give a statement to Congress on the economic crisis. He will appear later this month and face demands for more detail than that given by the Prime Minister. José Luis Rodríguez Zapatero admitted ‘serious difficulties’ but ruled out a possible recession.

Catalan sanitary ware group Roca, is considering making 398 sackings given the reduction in demand following the slow down in new construction. The company says its factories in Barcelona, Madrid and Sevilla will all be affected. The company has 5,900 employees in Spain and Portugal currently.

Spanish petrol stations are making more profit than others across Europe according to the latest figures which show that they are now making 26% more profit on diesel and 16% more profit on each litre of petrol. It’s what drivers have guessed for some time, but is now confirmed by the numbers from the National Energy Commission CNE, printed in the Expansion business newspaper.
Diesel in Spain is now, before taxes, the most expensive in Europe.

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