Spain Business
Spain Business Brief - Monday April 28 2008
By h.b.
Apr 28, 2008 - 12:51 PM

The European Commission has reduced the forecast for the growth of the Spanish economy for this year to 2.2%, that’s a tenth of a point lower than the latest forecast from the Spanish Government.
Brussels considers that the growth will be 1.8% in 2009, because of the contraction of the real estate sector in the continuing financial uncertainly and with the continued increase in the price of raw materials.

The Spanish Government is reported to be considering taxing those people who buy fixed rate government debt bonds from financial havens. They are currently exempt from tax, while residents of Spain who make the investment have to pay 18% tax on the income. A new Royal Decree in Spain has shown that the Government is taking a closer look at those who buy such bonds from havens such as Gibraltar, Liechtenstein, Panama or the Virgen Islands.

The resale of homes in Spain during February was 24.4% lower than in February a year ago, according to numbers released this morning by the National Statistics Institute INE. The fall in sales was particularly of note in resale properties reaching as much as 33.8%. There were 55,462 homes bought and sold across the country over the month.
The new data shows that the average mortgage awarded for property in February was for 148,965 €, which is 0.79% lower than the same month in 2007.
The number of new mortgages granted was 25.83% lower than a year ago at 81,897 over the month.
The fall in the construction industry in Spain has now left the regions of Aragón and Galicia as the areas of the country to grow the most last year.

The BBVA bank has announced a 15% increase in profits, after extraordinary items have been removed from the numbers. Profit for the first quarter of the year came in at 1.442 billion, but bad debts over the time increased from 0.84% to 0.99%. The bank says the numbers come thanks to the strength of the group in what they describe as a period of international uncertainty and instability.

Shares in the troubled real estate company Colonial have rallied 13% today following the news that both La Caixa and the Banco Popular have taken up 25% of the shares.

People who use debit cards to withdraw money from a cash machine in Spain, from a different bank to the client, but within the same bank network, is to increase by 4.5%. Users will find themselves paying 69 cents for each operation, three cents more than the price charged last year. Credit card charges are not affected, nor are those made with debit cards from the client’s own bank. Note also that some banks such as Santander and ING Direct have eliminated some of these charges in exchange for wages being paid monthly into their account.

And finally,
The planned strike action by pilots in Air Europa planned for May 5 and 9 has been called off. The union says they expect to reach an agreement with management next week.