Spain Business Brief - Monday August 18 2008

Spain Business Brief - Monday August 18 2008
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By h.b. - Aug 18, 2008 - 4:50 PM

Minister for Tax and the Economy, Pedro Solbes - Archive Photo EFE

Minister for the Economy, Pedro Solbes, insists Spain will escape recession.

The Deputy Prime Minister and Minister for Tax and the Economy, Pedro Solbes, has rejected the suggestion that Spain is paralysed by the economic crisis, and forecast improved growth in the third quarter. In an interview with the EFE news agency, he said that the Spanish economy was close to the crossbar of recession, but he said that it would not reach it.

Figures for the second quarter of the year show that the Spanish G.D.P. grew by only a tenth of a point leaving the annual growth rate at 1.8%. The Government has noted that, at least, is higher than much of the Euro zone, and claimed that Spain continued to have a greater capacity than the rest of the economies in Europe.
The slowdown is due to a fall in internal demand, with the economy seriously affected by the increased price for crude. The Bank of Spain has said there is increased uncertainty and a growing lack of confidence.
The Government has now approved a program of 24 economic reforms which will be introduced this year and next and which will affect housing, transport, energy, telecommunications and the environment. The new package includes 20 billion € in help for small businesses and VPO assisted housing.
It comes as the economy of the Eurozone has contracted for the first time in its history. The European Central Bank has however said that the economic bases are strong.

Iberia has reached agreement for the sharing of routes between Europe and North America with British Airways and American Airlines. It’s the next step following the announcement between Iberia and BA who have announced plans to merger, and the new alliance with American Airlines will allow travellers to obtain access to a far greater number of routes.
The forming of a mixed company on the transatlantic routes still has to obtain approval from the United States authorities.

Meanwhile the Ministry for Consumer Affairs has recommended the Spanish regions to fine Ryanair for threatening to cancel the reservations made via the Spanish travel portals Atrápalo, Rumbo and Edreams. The airline says it will cancel tickets reserved via the portals and dated later than August 26, claiming that the portals are adding surcharges against their conditions. The portals are taking legal advice.

Caja Mediterráneo has announced profits of between 827 and 862 million € thanks mostly to the sale of Unión Fenosa.

Petrol and diesel prices in Spain have fallen by 8.4% and 6.2% since reaching their all-time highs in the middle of July. The Secretary of State for the Economy, David Vegara, has forecast that the falls will continue in forthcoming weeks, and has said if that does not happen he will start an investigation into the prices via the CNC, National Competition Commission.

And finally,
The economic slowdown in Spain is affecting the number of people who use prostitutes across the country. The spokesperson for the prostitutes collective Hetaira has said the girls are complaining about the current lack of clients.

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