Spain Business Brief - Monday June 15 2009
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By h.b. - Jun 15, 2009 - 12:47 PM
Unemployment continues to spread in Spain according to Eurostat

Spain was the second country in Europe to destroy most employment over the first quarter of this year, behind only Lithuania. Employment fell over the quarter by 3.1% in Spain according to the numbers from Eurostat which put the year on year fall at 6.4%.
The International Work Organisation has said at a summit on employment meanwhile that the world cannot wait several years for the creation of jobs. The Director General of the organisation, Juan Somavia, said around 49 million people will lose their jobs this year and without any measures the employment crisis will last for eight years.

Meanwhile the Pirelli tyre company has presented an ERE request to sack nearly all of their 400 workforce at their factory in Manresa. Workers at the plant say they hope the number can be reduced through a program of voluntary redundancies, where unions say they could find 180 willing to go.
Employers and unions in the metal industry have restarted talks however, on the day that indefinite strike action had been threatened to start, following the breakdown of talks after a 30 hour marathon session on Friday.
Meanwhile Sara Lee has put its large consumer interests in Spain up for sale, and is to reduce the workforce at its Bimbo plants by 90 people.

The Government is reported to be considering giving a 400 € monthly payment to the unemployed who are not entitled to benefit. To be eligible for the scheme the person would have to take part in a training program. There are an estimated 1 million unemployed with no right to benefit in Spain currently. The measure would cost 120 million € a month.

Bank branches in Spain are closing at a rate of two a day, and more than 300 have shut their doors over the past six months. Experts say more branch closures are inevitable because the banks and savings banks are meeting ever increasing bad debt levels. Spain is currently one of the countries with most bank branches per inhabitant, at nearly 1 per 1,000. 300,000 people work in the sector.
Latest numbers for the first quarter show banks’ profits in Spain were down 21.5% at 4.052 billion €, compared to 5.161 billion € for the same period last year. A statement from the AEB, Spanish bankers association, said that the numbers ‘showed the ability of the banks to manage their activity in a complex financial environment and in the context of a deep economic recession’.

The National Statistics Institute, INE, has said that the number of mercantile companies created in Spain in April was 41.7% down on the same month last year at 6,341. It’s the 24th consecutive monthly fall, and a far greater reduction than the 12.2% seen in March.

A survey from Barclays Bank has indicated that Spanish investors have a poor tolerance to risk. It shows only 13% of large Spanish investors are prepared to invest in less secure products, compared to 37% of those questioned in the United Kingdom.

Some good numbers for bad debts in the high street in April where there was a 2,4% fall, compared to last year, in the number of people failing to meet their payments in April at 480,065. The average value of the bad debt was also down, by 9.5% at 2,831 €.

The Ministry for Industry has started the distribution of the free low consumption lightbulbs it is giving to each household across the country. 39% of users are exchanging their free vouchers in Correos post offices across the country. Distribution is underway in Madrid and Galicia and will be extended to other regions next month. 42 million low consumption bulbs will be distributed in two years.

The storage of olive oil has achieved its aim of increasing prices, although it has yet to start. The EU has authorised the private storage of 110,000 tons with EU help, in line with a request made from Spain and with the support of Greece, Italy, Portugal and France. Already prices paid to growers are up 10% at 1.74€ per kilo.
However observers say prices are not likely to rise much following a record harvest in Spain of 1.5 million tons.

And finally,
The arrival of Domino’s pizza in Spain has forced a move for new offers from market leader Telepizza. The Spanish firm feeds some 500,000 across the country between 9pm and 11pm on an average Saturday night in Spain, and gives jobs to 16,000, and now it has introduced new lines including hamburgers, chicken, kebabs, pastas and salads with the intention of ‘completing all the family tastes in a single order’.

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