Spain Business Brief - Thursday September 9 2010

Spain Business Brief - Thursday September 9 2010
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By h.b. - Sep 9, 2010 - 4:56 PM
The Government gets its labour reform legislation through Congress

José Luis Rodríguez Zapatero was solo during the debate - Photo EFE

The Spanish Congress has today, Thursday, approved the Government’s labour reform package, albeit with some changes.
The new text incorporates most of the amendments from the Senate, nearly all of them from the Socialist party, which needed the support of other opposition groups to get the legislation passed. Some 70 amendments were added to keep the opposition happy. As a result the PNV abstained in the voting, thus allowing the legislation to go through.
The agreement between the PSOE and the PNV Basque Nationalist Party on what economic reasons could justify redundancies results with the final document offering 20 days pay per year work as compensation which can be applied if there are ‘current or forecast losses’, or the ‘persistent reduction of income levels’. A worker can also lose his or her job when absenteeism reaches 20% of days in a two month consecutive period, or 25% over four separate months in the same year, provided in both cases that the average absenteeism is not over 2.5%. Workers who have been in the same company for three years on temporary contracts will now have to be given a fixed contract. An amendment from the PNV which considered that should only apply when the person has actually carried out the same job has not been included in the legislation. The concept of ‘partial unemployment’ as suggested by the BNG, Galician Nationalists was accepted. This means that benefits are calculated using hours and not days worked.
The main Socialist victory is the right to remove unemployment benefit after 30 days if the recipient does not agree to go on a training course. The previous limit was 100 days.

Unions have criticised the labour reforms describing them as ‘improvisation’ from the Government. The UGT has contrasted that to the ‘democratic wave’ of the general strike, while the CCOO union considers the cabinet has no plan prepared to get Spain out of the ‘endemic backwardness’.

Minister for Tax and the Economy, Elena Salgado, claimed the reforms would allow Spain to climb positions in the world competiveness rankings. Her comment came the day after data showed that Spain had fallen nine places in the World Economic Forum index to position number 42, at the same level as Puerto Rico. Top of the list are Switzerland, Sweden and Singapore.

Meanwhile the chief economist of the OECD, Pier Carlo Padoan, has said that the spending cuts have to continue in Spain, because of a question of credibility in the markets. The organisation still fears a further slowdown of the world economy.
However there has been praise from the ratings agency Fitch which says that Spain has already met between two thirds and three quarters of its fiscal financing requirements. It says the country is ‘well ahead’.

The 426 € extra monthly payment offered to the unemployed whose entitlement had expired has cost the Government 1.103 billion € so far. Celestino Corbacho, the Minister for Employment, has claimed that one in three of the recipients has now found work.

Spanish air traffic controllers say that talks with the Spanish Airports Authority, AENA, are in a ‘dead point’. They complain that the agreement with the Development Ministry is not being met, with the controllers’ union underlining the ‘scarcity of advances’ despite the ‘consolatory tone’ of Minister José Blanco.

According to statistics from the Housing Ministry, the real estate market started to move in Spain during the second quarter, with the number of sales up nearly 25% compared to the previous quarter and up 39.6% when compared to the same quarter last year. The number show that between April and June a total of 149,525 properties were sold; 67,895 new, and 81,632 resale. Some consider the rush is to avoid higher IVA/VAT charged on new properties from July. However three regions of the country saw falls in house sales, Navarra, Extremadura and Murcia. 57.8% of the sales were concentrated in Andalucía, Cataluña, Valencia and Madrid.
Sales to foreign buyers were up 46% on the same time last year.

And finally,
The CNC competition commission in Spain has fined the ferry companies Balearia, Trasmediterránea and FRS Iberia for price fixing. Their investigation found that they agreed on prices at different moments of demand on the route between Algeciras and Cueta. The three companies will have to pay 3.8 million € fine in total.

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