Spain Business Brief - Thursday June 25 2009
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By h.b. - Jun 25, 2009 - 12:56 PM
Spanish power companies facing fines for complicating competition

Spain’s competition commission has threatened to fine the electricity companies for putting obstacles in the way of clients who want to change supplier.
Endesa, Iberdrola, Hidrocantábrico, Unión Fenosa and E.ON have carried out ‘possible anti-competitive practices’ by allegedly holding back data from competitors. The measure comes ahead of the liberalisation in the sector which is set for July 1. From that date clients who have less than a 10kW supply can chose between the five suppliers designated by the Government.
Meanwhile Iberdrola has announced plans to sell two of its partner companies in Chile for 212 million. It’s part of the company’s strategy to sell off investments and could bring plus valías of 85 million.
The electrical companies in Spain have ruled out any ‘substantial’ increase in prices. An industrial auction takes place today which will be key to future prices but the power company association says there will be ‘more joy than shocks’.

The recession in Spain has removed the progress in per capita GDP made in the country over the past three years according to the latest figures which show a 3% fall to stand at 104% of the European average, but still ahead of Italy. Spain remains 12th in the list of 27 countries.

Although the Prime Minister is reported to have postponed more talk on the state budgets for next year until the Autumn, comes the news that the Government will be able to move ahead with the first step of the process by approving a spending limit for next year. Reports indicate that the Government has the support of the CC group, and the abstention of the CiU, IU and BNG, and this will win against the opposition of the PP, PNV, ERC, UPyD.
Meanwhile Minister for Tax and the Economy, Elena Salgado, has said that austerity in spending will be key for the Government next year, and allow them to redirect the public accounts towards an equilibrium and ‘structural health’.
Meanwhile it has been revealed that banks and savings banks will have to return the money lent to them by the state in Spain within five years.

The Government is putting the final details to a Royal Decree in which the state will finance the fusion of some of the savings banks in Spain with a 9 billion € fund. It’s also the intention of the Government however to keep an automatic veto on any proposed fusions across the regions. The PP leader Mariano Rajoy has called for the regional veto to be removed.

The retirement pension in Spain has increased by 4.8% over the past year to stand at 853 €. The Basque Country, Asturias and Madrid register the highest average pensions at 938 €, 903 € and 892 € respectively.

The European Central Bank has announced a record injecting of cash to allow commercial banks to grant long term credits and hence help in the reactivation of the economy. The ECB is lending 442 billion € to banks over this year at a fixed interest rate of 1%.

There has been a further 4.4% fall in the industrial price index in Spain for the month of May, compared to a year ago.

The board of the Martinsa real estate company has announced it has reduced the wage of Fernando Martín by some 40%. The company is currently under bankruptcy protection, and has reduced the wage as part of a cost cutting plan.

A new statement from the Ministry for Development and the Xunta de Galica has said that the new completion date for the AVE high speed train service to the region is 2015.

And finally,
A report by Merrill Lynch has said that the number of rich people in Spain fell by 20.9% in Spain during last year, from 161,000 last year to leave some 127,000. The report considers somebody to be rich when they spend more than a million dollars, 720,000 €, outside their main home and regular living costs. It places Spain now 12 on the country list, having lost a place over the past year to Brazil.

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