Spain Business Brief - Wednesday March 10 2010

Spain Business Brief - Wednesday March 10 2010
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By h.b. - Mar 10, 2010 - 2:06 PM

Elena Salgado in the Senate yesterday - EFE

Minister for Tax and the Economy, Elena Salgado, has no private pension plan

The large family businesses in Spain who make up the Institute of Family Business, IEF, have added their 2€ worth to the debate on pensions and the retirement age by saying that people should now work to 70. They say the current system is unsustainable, and what is needed is ‘a deep reform of the system, fruit of a consensus between all the political groups. They also say that the entire working life should be considered when pensions are calculated and not just 15 years as now.
Following the revelation that Celestino Corbacho, Minister for Employment, has a private pension plan, and his advice for others to follow suit, today the Spanish press reveals that the Spanish Deputy Prime Minister, Maria Teresa Fernández de la Vega, also has a private plan, while the Prime Minister, José Luis Rodríguez Zapatero, does not. Other ministers to have a private plan are Elena Espinosa and Beatriz Corredor.
Minister for Tax and the Economy, Elena Salgado, says she does not need a private plan, as she has been paying into the system since she was 22.

The latest report from the OECD, the Organisation for Economic Cooperation and Development, has said that Spain and Ireland are the countries which will suffer from the recession the most in the long term. They say that the recession will lead to a 10.6 point cut in GDP for Spain in the next years, and recommend reforms to the labour market and education system.
In both cases they say that the fall in economic activity is due essentially to the high levels of unemployment.

A report from Barclays bank has said that the exposed position of Spain to the real estate and construction sector will cause problems. Noting the numbers are triple what they were two years ago, it says the banks have now accumulated property worth 25.4 billion €. The report notes that savings banks have increased the weight of property on their balance sheets by 500%.

Caixa Girona has, at the last minute, withdrawn from plans to merge with the Manlleu, Sabadell and Terrassa savings banks. The decision was taken by the board on Tuesday, after rejecting modifications which had been made to the merger document.

Shop sales in Spain fell by 4.5% in January, after the effects of inflation were removed, according to the INE National Statistics Institute. It compares to a fall of just 0.5% in December.
However where December saw a loss of 3.4% of jobs, there was a recovery in job numbers in January of 2.7%.

The CEOE Employers’ Organisation and the CEPYME small business association has come up with a list of 125 ideas where they say that administrative business costs could be cut, to make doing business in Spain more comfortable and efficient. They say that administrative charges are ‘unnecessary’ and only produce irritability and additional costs for businesses.

The Chairman of the Employers’ Organisation, CEOE, Gerardo Díaz Ferran, is reported today to have considered re-floating his bankrupt airline Air Comet. However he has also admitted that the possibilities are scarce, but despite that he will continue to fight to see if it is possible. Speaking on Cadena COPE radio, he blamed a lack of credit from the ICO, Official Credit Institute, for the collapse of the airline.

As the European Union opens time for public consultation on the proposed alliance between Iberia, British Airways and American Airlines, it’s reported that the group is prepared to lose six of its slots from London to meet the requirements of the EU competition authority. A peak time slot at Heathrow can cost as much as 34.5 million €.

And finally,
Ahead of the increased VAT rates to be introduced in Spain from July 1 this year, news comes that the VAT/IVA allowance on imported items at customs has been changed. Before goods worth under 150 € were except from VAT, but now that amount has been reduced to just 22 €.
Meanwhile the PP President of the Madrid region, Esperanza Aguirre, has announced ‘a campaign of rebellion’ against the VAT increase, and that she will be going onto the streets to protest.

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