Spain Business Brief - Tuesday March 9 2010

Spain Business Brief - Tuesday March 9 2010
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By h.b. - Mar 9, 2010 - 1:42 PM

The Airbus 400M on its maiden flight from Sevilla - EFE

Airbus moves into a loss over problems with the A400M

Airbus has lost the opportunity to close ‘the deal of the century’ for 179 military planes for the United States air force, worth some 35 million dollars.
United States partner, Northrop Gumman, has withdrawn the offer to buy, saying that competition conditions were unjust, and moving the business to rival Boeing.
It’s another blow for the Airbus project, already delayed and over budget. Parent company EADS has announced losses of 763 million € because of the A400M problems, and 1.8 billion which was made available for the project.

Minister for Tax and the Economy, Elena Salgado, thinks that only 50% of the IVA/VAT increase to be introduced in July will be passed onto prices. She ruled out the suggestion that there would be a rounding up of prices by shopkeepers.
Speaking on Tuesday on Onda Cero radio, she defending the increase saying that it was needed to obtain more cash, even though there would be ‘a small reduction’ in consumer spending in the third quarter. The Minister also admitted that ‘perhaps’ it had been an error to cancel patrimonial tax.

Gerardo Díaz Ferran, the Chairman of the Employers Organisation, has agreed with the Minister for Employment, Celestino Corbacho, that a deal on labour reform will be reached in April. An indiscriminate reduction in social security quotas has been ruled out of the discussions according to latest reports.

The Government is reported to be prepared to water down their pension reforms. Secretary of State for Social Security, Octavio Granado, said that they would be flexible also on plans to move the retirement age. The comments come ahead of more cross party talks on pensions, known in Spain as the Toledo Commission.
Meanwhile the Minister for Employment, Celestino Corbacho, has been criticised by recommending people take out a private pension, and admitting that he has one himself. The PP responded to that by calling for ‘seriousness’ and called on the Minister to stop generating alarm.

Spanish Chambers of Commerce say that they don’t think the banks in Spain will ever get back 100 billion € they have lent to real estate companies and promoters. President, Javier Gómez Navarro, said he thought that the amount, 30% of the total of 350 billion € lent, would not ever be recovered, and he also thinks that many Spanish financial entities will therefore see a loss this year.

The latest report from Tinsa show that the fall in the price of housing in Spain has stabilised. They say that property prices fell in February by the same amount as in January – 5.5% in annual terms.

The amount of purchases made on credit card in Spain has fallen for the first time since 2002, despite there being a 2.35 increase in the number of transactions. The latest numbers also show a 2.42% fall in the number of cards in circulation and a reduction also in the number of points of sale and cash points. The numbers are for 2009 and come from the Bank of Spain.

The European Central Bank has criticised the idea of the European Monetary Fund considering it to be incompatible with the Euro. The ECB considers the idea, being promoted by Germany and France, would be very costly, establish false incentives and be a weight on the public finances of the better performing economies.

Domestic air travel saw 6.4% more passengers in January compared to last year, while the number of people to take the train fell by 6.5%, according to the INE, National Statistics Institute. The train use numbers saw a 7% fall on local lines, 3.4% fall on medium distances and a 2.3% increase on long distance routes. More than 380 million people used public transport in January this year, down 3.7% on the same month in 2009.

The Valencian parliament has called on central government to control the entry of fruit and vegetables from outside the European Union. The Valencia region is particularly concerned about Moroccan Oranges and Tomatoes. They want to see an agreement made with Morocco last December not ratified.

The number of mobile phone lines in Spain fell in January by 76,303, despite the fact that 167,808 new contracts were issued over the month. It comes as more people move away from pre-paid cards, encouraged by the need now to register their identity.

And finally,
A Málaga company, Ne-cap, has come up with refillable, as opposed to the disposable, capsules made for the Nespresso coffee making machine. Ne-cap says it gives users the chance to use the coffee they want with the machine for the first time.
George Clooney was not available for comment.

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