Spain Business Brief - Tuesday October 27 2009

Spain Business Brief - Tuesday October 27 2009
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By h.b. - Oct 27, 2009 - 2:31 PM

La Condesa de Fenosa - EFE archive

Spain's first female bank Chairman has died

The workers committee at the Opel factory at Figueruelas in Zaragoza has accepted the latest offer from Magna, the new owners of the plant. 900 jobs will be lost as a result and the unions have called off a planned four day strike. The plan was approved by the unions UGT, CCOO, USO and Acumagne, but was still rejected by the OSTA and CGT.
It follows months of difficult talks, and the intervention of the Industry Minister, Miguel Sebastián, and means that 25.8 million € will be saved at the plant each year.

The state deficit in Spain has grown five-fold since September last year and now stands at 62.78 billion €, or 5.96% of GDP. The deficit grows as the state spends more than it earns as the recession continues to bite. Income from taxes has fallen by 15.8% while income from VAT/IVA is down 33.9% since September 2008.
Despite the latest numbers the Secretary of State for Hacienda and budgets, Carlos Ocaña, has kept the government’s forecast for a deficit of 8.1% of GDP at the end of the year. He said the announced tax increases and cuts in spending next year would allow the deficit to reduce to below 3%, as the EU demands, from 2012.

Meanwhile the budget surplus in the Social Security account has fallen by 30.4% in September, to stand at 12.015 billion € for the first nine months of the year. That’s equivalent to 1.14% of GDP and comes as a consequence of a 0.6% fall in income and a 6.1% increase in payments.

Technicians from Hacienda tax authorities in Spain have estimated VAT/IVA fraud at 71.156 billion between the years 2000 to 2008. A new study has claimed that some 42.139 billion € can still be recovered from the VAT returns over the past four years. The experts think the submerged economy in Spain has been growing during the recession, as IVA income was down 38.4% in August compared to a year ago.

A report from the BBVA has forecast that bad debts are likely to continue to increase in the bank until the middle of next year. The bank has now made provisions of 4.655 billion € to cover the possible shortfall, and announced a 3.3% reduction in its profits as a result for the first nine months of the year. The current bad debt level has doubled over the year to 3.4%.

Insurance group Mapre has announced a 3.9% increase in profits for the first nine months of the year compared to last at the same time, at 743.4 million €. The company says international business has proved key.

Iberia is today suffering the second day of 48 hours of strike action by cabin crews which has affected 210 flights for the second consecutive day, most of them out of Madrid Barajas. The company has said the wages already paid are ‘out of the marketplace’ claiming that wages make up 50% of the company’s costs. Cabin crews can be away from home for more than 11 nights a month, and unions claim that the problems of family life has led to suicides.
The company says that with extras cabin crew earn from 18,000 € for new arrivals to 60,000 € for veterans. There are 11 wages levels which change every two years.

Meanwhile low cost airline Vueling, in which Iberia holds a 40% share, has announced a profit of 72 million € for the year to September, thanks to its merger with Clickair. Vueling lost 18 million € over the same period last year.

The number of new mortgages created in Spain over the first eight months of the year was down 27.6% but the fall in August was only 6.6%, leading experts to say that the slowdown in the real estate market is coming to an end. The average amount granted was 111,753 €, down 18.8% on a year ago, according to the numbers from the National Statistics Institute.

And finally,
The first woman chairman of a bank in Spain, La Condesa de Fenosa , has died. Carmela Arias y Díaz de Rábago led the Banco Pastor for 30 years. She died in her home in A Coruña today at the age of 89.

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