Spain Business Brief - Wednesday June 23 2009
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By h.b. - Jun 24, 2009 - 1:03 PM
OECD issues lower forecast for Spanish economy

The Organisation for Economic Cooperation and Development, OECD, has issued a new worse forecast for the Spanish economy, which it now thinks will see a fall of 4.2% of GDP this year and 0.9% next. It compares to the earlier forecast of 0.9% this year and 0.8% next.
Their latest report also recommends that banks with problems should declare themselves bankrupt, and that the majority of the measures put in place by the Spanish government to fight the recession be removed next year.

Speaking in Wednesday’s control session in Congress, the Minister for Industry, Miguel Sebastián, has said that nuclear energy is irreplaceable. He said the decision to close or keep open the Garoña nuclear power station in Burgos, does not mean the need for such energy is in doubt, if the electricity supply is to be guaranteed. He said the Garoña decision is ‘very complex’ and reminded the PP deputies that during the Aznar years the Zorita power station was closed.

The Banker magazine has named Santander and the BBVA among the five most profitable banks in the world. Both the banks find themselves next to Chinese banks, with JP Morgan at the top of the list. Least profitable bank is named as the Royal Bank of Scotland.
Meanwhile the Bank of Spain has called for mergers between the banks and savings banks in the country which receive state aid. The Governor Ordóñez has made it clear he prefers to see the weakest entities disappear.

Spanish company Cintra, part of the Ferrovial group, has won the contract to build a new motorway in Texas for 1.44 billion €. The funds come from the United States Department of Transport, destined to encourage private participation. The North Tarrant Express is the fourth motorway contract won by the company in the United States and Canada.

Confusion over the Government’s intentions on Tuesday with the decision to first back higher tax levels on top earners and then the decision not to do so. It came as the Government looks for partners for support for the budget proposals, and a breakdown in its agreement with the IU leftwingers.
Meanwhile the Prime Minister has repeated yet again that the Government will not make the sacking procedure any cheaper for employers in Spain, despite the pressures being put on him to do so. Zapatero defended his stance by saying that such a change was not contemplated in his election manifesto.

Mobile phone companies in Spain have been told by the Telecommunications Market Commission, which controls the sector, that they should cut the wholesale charges they make between each other when one of their clients calls another network by 43%. That would reduce the charge from seven to four cents a minute between the main operators, Movistar, Vodafone and Orange with reductions being made every six months. Such a reduction does not mean any savings for consumers.
Meanwhile Telefónica has promised a dividend for its shareholders, despite the crisis. CEO César Alierta told shareholders that signs of a recovery were being seen in this quarter.

Hacienda in Spain has admitted that the public deficit here cannot grow any more. They have made the statement after confirmation that Spain is the European Country to have spent the most against the recession, with Brussels estimating the number for the Government’s measures at 2.3% of GDP.

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