Spain Business Brief - Wednesday August 18 2010

Spain Business Brief - Wednesday August 18 2010
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By h.b. - Aug 18, 2010 - 3:33 PM
Salgado and Blanco agree to spend more on infrastructure

Elena Salgado and José Blanco - EFE

A meeting held today between the Minister for Tax and the Economy, Elena Salgado, and the Development Minister, José Blanco, has resulted in the announcement that the spending cuts on infrastructure will be 500 million € less than first announced for 2011. It takes the cut in spending down from 3.5 billion to 3 billion, and José Blanco explained that the recovered money would be spent on works ‘in an advanced state of completion’. Some 50 works are expected to be put out to tender in the extraordinary offer next month.
Elena Salgado has also ruled out any increase in income or IVA/VAT taxes, but did expect ‘a small adjustment’ on some other taxes. It follows harshly attacked comments from José Blanco earlier who claimed that tax levels in Spain were lower than elsewhere in Europe. Reports indicate that Salgado is considering a new tax on transport, but she claimed today that the current fiscal structure is ‘sufficient’ to reach the deficit objectives for 2013.
Meanwhile reports indicate that the postponed meeting between the Prime Minister and main constructors in Spain is about to take place.

Despite the 20% unemployment rate in Spain, there are some jobs where companies are now looking for foreigners to fill them, given a lack of national capacity. Doctors, sports trainers and marina personnel are required, for example, in Asturias, Canaries and Murcia.

The Ministry for Employment considers that a crime could have been committed in the way that workers in the Marsans travel company have been treated. Five serious infractions have been passed on to the Ministry’s prosecuting office, alleging failings in management from the previous owners, Gerardo Díaz Ferrán and Gonzalo Pascual, and from the current owners, Posibilitum Business.

Bad debt is on the way down again ending June at 5.35%, down 0.16%. It follows increases seen in April and May and leaves 98.9 billion worth of credit considered to be doubtful. It’s still at its highest level for 14 years.

A court ruling in favour of Algeria in the French Court of Arbitration could see gas prices rise in Spain. Gas Natural shares have been hit following the ruling. 25% of the domestic gas used in Spain comes from Algeria.

Shares in Barcelona company, La Seda, fell by 7% in just few minutes after opening on the market today. It follows a recapitalisation by the company and a change in its activity in recycling packaging.

Reports indicate that Santander has reopened talks with the United States bank M&T in order to expand in the United States. Santander already owns the Sovereign banks and hopes to merge M&T with that business in a project which first hit the buffers in May. Now the Financial Times says the talks are underway again.

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