Spain Business Brief - Wednesday June 17 2009
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By h.b. - Jun 17, 2009 - 1:26 PM
Spanish Prime Minister claims the 'hardest part of the crisis has past'

During the control session in Congress today, Spanish Prime Minister, José Luis Rodríguez Zapatero, insisted that the ‘hardest part of the crisis had past’.

However he sidestepped questions as to whether more taxes will be increased this year, following on from the announcement last weekend of higher taxes in petrol and tobacco. This has translated into 35 cents rises in the cost of a packet of Winston, Camel and Lucky Strike.

Opposition leader Mariano Rajoy accused Zapatero of tricking the Spanish people by not announcing the increases before the election, but health associations have welcomed the tobacco price hike and called for taxes to be increased even more, describing Spain as still being the tobacco sales stall of the south of Europe.

Zapatero said that the economy would continue to recover over 2010 and reach positive growth numbers in 2011.

Following the comments from the Spanish Minister for Tax and the Economy, Elena Salgado, voicing surprise at the decision of Caja Madrid to lend 76 million € to Real Madrid to help fund their new signings program, and her comments that if the bank has liquidity perhaps it should lend to small businesses and individuals, now the Chairman of the Bank, Miguel Blesa, has said that they grant credits to those who are going to return the money.

Blesa also did not rule out the purchase of another savings bank in the future, and called for the current veto on mergers between savings banks across different regions of the country to be lifted. The regions of Andalucía and Cataluña are reported to be those most staunchly defending the regional veto.

The President of the Spanish Confederation of Savings Banks CECA, Juan Ramón Quintás, responded to the comments made by Zapatero and Salgado by saying ‘with friends like that, who needs enemies’. He said the Government was always blaming the problems in the banking sector on the savings banks, but said they had seen a fall in income because of the lack of business, and had meanwhile made greater provisions and faced higher bad debt. He said some savings banks would see losses in 2010 and 2011, and others not.

Employment in the service sector has registered its largest fall in six years, with the 12th consecutive monthly fall registered in April when it was down, year on year, by 6.8%. There were reductions in all sectors, but especially in companies linked to the tourism industry and business services. Sales were down in the service sector by 20% compared to April last year.

The Iberdrola power company has announced a capital amplification of 1.25 billion €. The company presided over by Ignacio Sánchez Galán, says that it will carry out the measure with a private issue of shares directed exclusively at qualified and institutional investors. The move is designed to reduce the company’s debt and keep its credit worthiness levels high.

And finally
Yesterday saw a landmark in Banco Santander against its main rival in Spain the BBVA, with the announcement that the stock market value of Santander had doubled that of the BBVA for the very first time. At the close Santander had a capitalisation of 64.429 billion, while the BBVA had 31.895 billion. Santander is the largest bank by stock market value in the Eurozone.

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