Spain Business Brief - Thursday July 29 2010

Spain Business Brief - Thursday July 29 2010
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By h.b. - Jul 29, 2010 - 2:29 PM
70 percent of air traffic controllers off sick told to return to work

Photo EFE

Seven out of every ten air traffic controllers who have taken time off work have failed a Social Security inspection. 205 cases were checked and 132 workers told to return to work. A statement from the Ministry for Employment said the controls were taken given the high incidence of people off sick, particularly in Barcelona, since the Government has started to cut wages and change the employment conditions in the sector. Many controllers have seen a 40% wage cut from 350,000 € a year to 200,000 €.

Inflation in Spain has climbed to 1.9%, its highest level for the past 18 months. The advance number for July is the first to be published since the increase in IVA/VAT on July 1.
Inflation in July was 0.4% to take the annual rate to 1.9% according to the National Statistics Institute which will confirm the data when the number is officially published on August 12. The INE says the increase is explained by an increase in the price of foodstuffs and non-alcoholic drinks, more expensive gas and organized travel.

The end of the car scrappage scheme combined with increased IVA/VAT has resulted in a dramatic fall in the number of new car sales. Anfac, the dealers association is reporting that so far this month sales are 50% down on last month, and they have called for an urgent meeting with the Ministry for Industry.

Congress will today approve the reforms which will put the detail on the reasons that businessmen can claim in order to qualify for cheaper redundancy payments. Unions are speaking of ‘an attack against the workers’, but it means that business owners can opt for cheaper sackings if they are in economic difficulties.

Telefónica has beaten the market and announced a 9.4% increase in profits for the year to June at 3.775 billion. The company says that its businesses outside Spain compensated for the weakness of the market at home.
The news comes a day after the announcement of the purchase of Portugal Telecom’s shares in the Brazilian company Vivo for 7.5 billion €.

Repsol has announced a 38.9% jump in profits for the first half of the year compared to last, thanks to more expensive crude and gas prices. Profit came in at 1.338 billion. Its Gas Natural Fenosa business brought in 551 million of the profit.

Banco Santander has announced a net profit of 4.445 billion for the first six months of 2010, which is down 1.6% compared to last year. It’s a result of 4.919 billion being set aside for insolvencies, 6% more than last year. The bad debt level at the end of June was 3.37% and the bank considers it will continue to rise. Spain’s largest bank says it hopes to complete the purchase of the 318 Royal Bank of Scotland branches in the UK during August.

Caja Madrid has announced a 66% fall in profits at 194 million for the first half of the year as bad debt levels in the savings bank fell to 5.39% from a previous 5.5%. The bank notes that it has destined 845 million to bad debt provision.

The European Central Bank is toughening the guarantees it needs for its loans to the banks from January 1 next year. It means that loans will be more expensive for banks of they use low quality assets as guarantees for the credits they request.

FUNCAS, Spanish Savings Bank Federation, has improved its forecast for the Spanish economy for next year, but it still remains more pessimistic than the Government. They now think the economy will grow by 0.6% of GDP, up 0.1% on their previous forecast, while the Government has put the number at 1.3%.

Miguel Sebastián, the Minister for Industry, has said that a EU commission prohibition on grants for coal mining from 2014 is ‘unacceptable’. He has called for the EU measure to stop the aid to be postponed until 2020.
‘They have not taken into account the importance that coal has in Spain and other European countries as their only home based fuel source, and therefore for the security of supply’, he said.

Minister for Development, José Blanco, has said that work to build the AVE high speed link between Madrid and Lisbon would not be stopped ‘under any concept’. The Portuguese Government has also underlined the importance of the line, which it describes as being ‘key’ for the integration of the Iberian Peninsular in the European high speed rail network.

And finally,
A job offer of 600 € a day for work in Dubai has proved to be a scam and six people have been arrested. There are people affected in Madrid, Sevilla, Huelva and Salamanca.

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