Spanish Business News

EU to ban olive oil jugs from restaurants

2013-05-18T10:48:52

The small glass jugs filled with green or gold coloured extra virgin olive oil are familiar and traditional for restaurant goers across Europe but they will be banned from 1 January 2014 after a decision taken in an obscure Brussels committee earlier this week.

From next year olive oil "presented at a restaurant table" must be in pre-packaged, factory bottles with a tamper-proof dispensing nozzle and labelling in line with EU industrial standards.

The use of classic, refillable glass jugs or glazed terracotta dipping bowls and the choice of a restaurateur to buy olive oil from a small artisan producer or family business will be outlawed.

Read the full article at the Telegraph

Are there really 2.25 million unsold homes now in Spain?

2013-05-15T21:06:00

I've just been reading the latest article by Ambrose Evans-Pritchard of the Telegraph where he quotes a figure of 2.25 million as the number of unsold properties in Spain. This is much higher than any other figures I've seen. I think 1.6 million was the highest number I'd previously seen. From the above mentioned article:

Madrid consultants RR de Acuna have a report coming out this month warning that the glut of unsold properties has risen to a fresh peak of 2.25m homes, including those in the hands of builders and banks, or in the eviction process.

"It will take 10 years to get rid of the stock. We're pretty sure that prices will bleed another 15pc," said Fernando Rodriguez de Acuna. "The market is broken, and the quoted prices in many areas are a fiction. You can't sell even if you offer a 50pc haircut. A lot of buildings will have to be knocked down and land is going to revert to farmland, or just to nothing."

Alcohol and tobacco taxes to go up in Spain

2013-05-14T21:25:03

According to El Pais, the Spanish government is likely to increase taxes on alcohol and tobacco as well as increasing environmental taxes:

The government has ruled out any further hikes in major taxes this year and is instead studying increasing special levies on items such as alcohol and tobacco along with environment taxes to help meet its deficit target for this year.

However, Finance Minister Cristóbal Montoro has already flagged that the temporary hikes in personal and corporate income tax introduced last year would remain in place in this year’s budget.

The government feels it has some scope to raise the overall tax burden, given that tax revenues in Spain currently account for only 36 percent of GDP, compared with an average of 46.5 percent in the euro zone as a whole.

Economy minister calls for deposits of over 100,000 euros to be given protection

2013-05-14T21:17:26

Spanish Economy Minister Luis de Guindos on Tuesday proposed that Europe should provide protection for deposits of more than 100,000 euros in the event of bank failures, arguing that the current guarantee limit of 100,000 euros is “artificial.”

Speaking to reporters in Brussels after a meeting of European finance and economy ministers, De Guindos said that guaranteeing bank deposits of 100,000 euros or less is not in doubt, but that there are moves to reach agreement providing protection for amounts of over 100,000 euros as well, in the case of exceptional circumstances and based on very strict rules.

“We have to send a very clear message: that deposits are adequately protected,” De Guindos said.

Read the full article at el Pais in English

British savers could face losses in eurozone bank stress tests

2013-05-07T18:25:34

Uninsured depositors and bondholders in eurozone banks could face imposed losses following stress tests carried out before a “single-supervisory mechanism” headed by the European Central Bank begins work next June.

Jeroen Dijsselbloem, the chairman of eurozone finance ministers, warned that that the ECB checks on the quality of banking assets could lead to banks being shut down, highlighting the need for eurozone agreement on bank resolution rules this summer.

The prospect of eurozone banks facing closure will alarm British expatriates who live and have transferred their savings, proceeds from house sales and other assets to eurozone bank accounts in countries such as France, Spain and Italy.

“The first thing that the ECB will have to do when they take on their supervisory task is to have an asset-quality review of the main banks that will be under their supervision and I think very soon after that all the other banks in Europe as well because there is still the risk of contamination between banks,” Mr Dijsselbloem said.

“The outcome of that asset quality review we don't know yet, but it might be worrying. It might be worrying for some banks in some countries. We don’t exactly know. What I do know is that when we do have an outcome that is worrying, we need to have the instruments to deal with the problems.”

Read the full article at The Telegraph

Berlin rejects calls for domestic stimulus plan to help out Spain

2013-05-01T18:11:53

German Finance Minister Wolfgang Schäuble on Monday reiterated his government’s objection to launching a domestic stimulus package to help out struggling countries such as Spain boost exports, but in an encounter with Spanish Economy Minister Luis de Guindos he floated the idea of German companies investing in smaller Spanish ones to help create jobs.

After a meeting in a luxury hotel in Loja, in the province of Granada, Schäuble and De Guindos outlined the framework of a plan that would be developed outside the auspices of European institutions and under which German companies would inject funding into solid small and midsized Spanish enterprises (SMEs).

Such investment would be jointly “sponsored” by the German and Spanish governments. Schäuble said the main thrust of the plan is to tackle high unemployment in Spain, particularly among young workers, which the German minister said was a major concern for the government of Chancellor Angela Merkel.

Read the full article at el Pais in English

Spain's economy contracts for seventh consecutive quarter

2013-04-30T12:59:24

Spain's economy shrank for a seventh consecutive quarter between January and March as domestic demand slumped.

The country's gross domestic product fell by 0.5% compared with the previous quarter, according to the National Statistics Institute.

On an annual basis, Spain's economy shrank 2% in the quarter - the worst fall since the end of 2011.

Last week, Spain's government cut its forecast for 2013, saying it now expected the economy to shrink by 1.3%.

Its previous estimate had put the rate of contraction at 0.5%.

Source: BBC News

Lloyds Banking Group sells its operations in Spain to Banco Sabadell

2013-04-29T13:13:56

Lloyds Banking Group plc (the Group) is today announcing that it has agreed to sell its Spanish retail banking operations, including Lloyds Bank International S.A.U and Lloyds Investment España SGIIC S.A.U, to Banco Sabadell, S.A (Banco Sabadell).

The sale comprises the Group's retail and private banking business and the local investment management business in Spain. The business being sold consists mostly of retail mortgages and deposits, with a large portion of non-resident clients. The Group's Spanish corporate banking operations, serving business clients, are not included in this transaction and will continue to operate as usual.

To ensure continued support for our customers in the Spanish market and in conjunction with the sale, the Group is also developing a collaboration agreement with Banco Sabadell which it is expected would involve exploring potential business opportunities in areas including retail, commercial, private banking, asset finance and asset management.

Under the sale agreement, the Group will receive shares equivalent to approximately 1.8 per cent of the total issued share capital of Banco Sabadell as part of the consideration for the sale. The Group intends to be a supportive shareholder of Banco Sabadell and has undertaken to retain the shares received under the sale agreement for a period of at least two years.

Total consideration will be payable in a mix of shares and cash. At completion Banco Sabadell will deliver 53.7 million ordinary shares out of their treasury holding with such shares being valued at €84 million (£72 million1) by reference to the volume weighted average share price on 26 April 2013. An additional consideration of up to €20 million (£17 million1) may be payable in cash within the next five years dependent on mortgage book margins.

As of 31 March 2013 the total assets of the sale were approximately £1,517 million, comprised almost entirely of customer lending, and customer deposits were approximately £670 million. The business reported a loss of approximately £43 million in 2012, which included an increase in the impairment provision as a percentage of impaired loans to approximately 90 per cent. The sale of the business is currently expected to lead to a loss on disposal of approximately £250 million1 in the Group's accounts.

The sale is in line with the Group's strategy of rationalising its international presence and ensuring best value for shareholders. The current senior management employed by Lloyds Bank International S.A.U and all of the staff of the Spanish retail operations will move across with the subsidiaries on sale. Any cash proceeds of the sale will be used for general corporate purposes.

The sale is subject to regulatory approval and is expected to complete in 2013.

Source: investegate.co.uk

Spanish house prices need to fall another 10%, Goldman Sachs warns

2013-04-28T09:31:23

Spanish house prices need to fall another 10pc, posing fresh problems for the country’s troubled banking sector, Goldman Sachs has warned.

Another 10pc fall in house prices in Spain would threaten to put the country under even greater pressure. Half a million home owners are in negative equity and the government has had to pass laws to prevent banks repossessing homes, forcing families onto the street.

However, Goldman economists Andrew Benito and Sebastian Graves said more homeowners could be at risk. “Our preferred model values housing based on the relationship between rental yields and real borrowing costs. The current level is consistent with house prices falling by a further 10pc to reach an implied equilibrium,” they said.

Source: The Telegraph

Spain's unemployment rate hits record high of 27.2 percent

2013-04-25T21:15:25

Spain's unemployment rate has jumped to a record high of 27.2 percent. According to Spain's National Statistics Institute (INE) some 6.2 million people are without work.

The Spanish statistics body reported Thursday that the nation's unemployment rate shot up from 26.02 percent in the last quarter of 2012 to 27.16 percent in the first three months of this year.

The INE said the increase reflected the additional 237,400 people registered as unemployed in the first quarter of 2013.

With more than six million people out of work, the eurozone's fourth largest economy now has the highest unemployment rate since records began in the 1970s.

Source: Deutsche Welle

Madrid rebrands metro in Vodafone deal

2013-04-24T21:58:42

The British mobile giant has struck a deal to rename part of the Spanish capital’s underground rail network, and to splash its scarlet logo all over its underground signs.

From June, Madrid’s “Line 2”, a line which is depicted as red on maps of the city’s tube and which carries 122,000 passengers a day, will be renamed Line 2 Vodafone.

Meanwhile, the city’s central Sol station - the gateway to Puerta del Sol Madrid’s equivalent of London’s Trafalgar Square - will be renamed Sol Vodafone.

The mobile business will pay Madrid’s metro operator €3m over three years for the privilege, in a deal which will also allow Vodafone to emblazits insignia on Madrid’s official Metro map , on platforms and inside trains.

“It is the first time in Europe that an entire metro line changes its name based on a commercial deal, generating new forms of income,” Vodafone said in a statement.

Read the full article at the Telegraph

Spain's population shrinks as immigrants flee economic crisis

2013-04-23T13:43:16

Spain's population fell last year for the first time in decades, as immigrants left the country amid a major economic crisis, officials say. The National Statistic Institute (NSI) says the number of residents dropped by almost 206,000 to 47.1m - the decline entirely accounted for by foreigners.

Immigrants from Ecuador and Colombia showed the biggest fall. The figures do not take into account many Spaniards who have left in search of work but are still on the census. The statistics agency recorded Spain's first population drop since the regular census began in the 1990s.

Although the number of native Spaniards grew in 2012 by some 10,000 - it only minimally offset the overall fall of nearly 216,000 among registered foreign residents.

The figures show that the ongoing economic crisis has reversed the country's rapid population growth in the decade before the financial crisis erupted in 2008.

Source: BBC News

De Guindos Suggests Spain to Miss Deficit Plan Amid Weak Growth

2013-04-20T15:52:18

Spanish economy minister Luis de Guindos said he will refrain from imposing extra austerity even as public borrowing figures are likely to miss targets because of a weaker-than-expected economy.

Government fiscal forecasts due April 26 will be adjusted to account for a weaker “economic reality,” de Guindos told reporters in Washington today, suggesting he will miss previously set limits for the current fiscal year. He said forecasts will be “very conservative.”

“Budget policy has to be adjusted to economic reality,” de Guindos said after meetings with Group of 20 finance ministers. “It is essential that fiscal policy in the medium term is seen to be sustainable while bearing in mind the effects on economic activity of excessive fiscal restriction.”

Source: Bloomberg

Spanish Squatters Invoking Robin Hood Deter Investment

2013-04-18T19:33:07

A 285-unit apartment complex in Parla, less than half an hour’s drive from Madrid, should be an ideal target for investors seeking cheap property in Spain. Unfortunately, two thirds of the building generates zero revenue because it’s overrun by squatters.

“This is happening all over the country,” said Jose Maria Fraile, the town’s mayor, who estimates only 100 apartments in the block built for the council have rental contracts, and not all of those tenants are paying either. “People lost their jobs, they can’t pay mortgages or rent so they lost their homes and this has produced a tide of squatters.”

The gray concrete and orange cinderblock building, peppered with broken windows and graffiti labeling the property as a squat, is about 12 miles (20 kilometers) south of the capital. It’s just one of thousands transferred to Spain’s bad bank, Sareb, after the developer skipped town two years ago and Bankia SA (BKIA), the nationalized lender that backed its construction with an 18 million-euro ($24 million) loan, foreclosed on the property.

The proliferation of illegal tenants threatens to complicate efforts to manage the bad bank, set up by Spain under the terms of a European bailout for its financial system to absorb 37 billion euros of soured real estate. Sareb has pledged to sell 42,500 homes, about half its stock, in the first five years of its 15-year life span and aims to generate a return for investors of 13 to 14 percent. It foresees 1.5 billion euros of asset sales this year, a target that must be met to demonstrate to investors the vehicle is viable.

Read the full article at Bloomberg

74% of Spaniards believe the economic situation in Spain will be the same or worse a year from now

2013-04-08T14:12:53

According to the latest poll from the Centre for Sociological Research (CIS) for the month of March, 41.7% of Spanish citizens feel that the economic situation in Spain will be worse a year from now, while 32.7% believe it will remain the same. This means that 7 out of 10 Spanish see no improvement in the economic situation over the next 12 months, and what is even more important, a high percentage of them believe that the trend points to further deterioration in the economy.

Tax Advisers say the new declaration of foreign assets law is "crazy"

2013-04-06T12:08:16

The president of the Spanish Association of Tax Advisors (AEDAF), Antonio Durán-Sindreu, has said that the rule requiring the reporting of foreign assets is "sheer madness" because its content raises many questions that generate uncertainty among taxpayers.

AEDAF President has said that the consequences of failing to declare are "tremendously" disproportionate and very high and stressed that this law was badly drafted and raised many questions that conveyed a great legal uncertainty.

Spain 'to revise down growth forecast and seek more time to cut deficit'

2013-04-02T12:12:07

Spain's gross domestic product (GDP) will be forecast to shrink by 1pc, rather than 0.5pc, a government source told Reuters, adding that the ruling party intended to shift emphasis to growth rather than deficit reduction.

Spain is negotiating with the European Commission for more time to bring its deficit within 3pc of GDP, something it is currently expected to do by 2014, the source said.

Spain will increase its 2013 deficit target to 6pc of GDP, from an existing forecast of 4.5pc. The figures on growth and the deficit could still vary by one or two decimal points, depending on the outcome of talks with the Commission, the source said.

The Spanish government is now trying to balance control of state finances with more growth-oriented policies, the source said.

Read the full article at the Telegraph

House prices suffered a record decline of 13.7% in 2012

2013-03-31T11:19:22

House prices in 2012 suffered their biggest drops since the bubble burst in late 2007. The decline last year was 13.7% on average compared to a year earlie, marking the fifth consecutive annual decline, according to the housing price index from the National Institute of Statistics (INE). According to data released earlier this month, new house prices fell by 12.3%, while second hand house prices fell by 14.8%.

The declines look set to continue for the forseeable future against a backdrop of unemployment rate approaching 27%, banking sector problems and a forecast decline in GDP of 1.5% this year. The increase in VAT to 10% on new properties that was introduced this year is also likely to negatively affect prices.

Spain's Economy Minister Luis de Guindos says "Deposits under 100,000 euros are sacred"

2013-03-30T12:35:52

According to Luis de Guindos, Spain's Economy Minister: "Deposits under 100,000 euros are sacred ... and must have a (tax) rate of zero". I guess what he's saying here is that deposits over 100,000 euros are fair game and will be taxed/stolen if or should I say when Spain finds itself in a similar situation to Cyprus...

Spain Economy Minister says Cyprus' euro exit not on the table

2013-03-30T12:30:01

(Reuters) - The possibility of Cyprus exiting from the euro zone is not under consideration, Spain's Economy Minister Luis de Guindos said on Tuesday.

Speaking to journalists in the hallways of the upper house of Parliament, de Guindos also said bank deposits under 100,000 euros ($128,900) in Europe should not be touched.

"Deposits under 100,000 euros are sacred ... and must have a (tax) rate of zero," de Guindos said.

Source: Reuters

Ryanair cabin crew and pilots secure pay rise of 10pc

2013-03-30T12:21:27

RYANAIR has agreed a deal with cabin crew and some pilots that will see them get an average 10pc pay increase over the next four years.

With no union representation, the pay negotiations have been handled by internal employee representatives and management. There are over 2,400 pilots working for the airline and 5,200 flight attendants.

The company said the pay increases for cabin crew will apply to all grades, from supervisors to junior members. They've also negotiated higher supervisory and other allowances, while what Ryanair describes as a stable "home every night" roster has also been maintained.

Ryanair said pilots at bases in Cork, Shannon, Bristol, Alicante, East Midlands and Luton have also negotiated fresh terms. They include pay rises of up to 10pc as well as allowance and pension increases. The pilots will also work a five-day on, four-day off roster.

Read the full article at inependent.ie

2013 a good year to invest in Spanish property, say BNP Parisbas

2013-03-29T17:39:49

This year will be “particularly favourable” for investing in Spanish property, argues BNP Parisbas Real Estate, whilst PricewaterhouseCoopers say there are now plenty of opportunities.

BNP Parisbas Real Estate, part of the French bank, lists ten good reasons for investing in Spanish property today, in a new guide to investing in Spain, aimed at foreign investors.

The main reason they give is prices, which have fallen to their lowest level since the crash began, and now represent a “unique opportunity,” they argue. Prices have fallen faster than rents, driving up rental yields on prime property. Forecasting that prime property prices will recover within the next 5 years, they conclude this is the time to invest.

The other factors the mention include Spain’s structural reforms, infrastructure, strategic position as a gateway to Europe from Latin America and Africa, world-class corporations and a well-trained workforce.

Source: Spanish Property Insight

Bank of Spain warns economy will sink further into recession in 2013

2013-03-29T17:35:06

The Bank of Spain has warned the Spanish economy will sink further into recession in 2013 in its annual update of economic forecasts. The Bank of Spain is predicting economic output to drop by 1.5% in 2013 as austerity really starts to bite.

The Spanish government is also likely to revise down its over optimistic growth figures in the coming weeks...

EU prepares to blow final whistle on Spain's debt-ridden football clubs

2013-03-23T14:52:26

It is the powerhouse of global football, home to its greatest players and a World Cup-winning national team, but Spain's soccer bubble looks set to explode as European authorities prepare to halt public funding of debt-ridden clubs.

In a move that threatens to provoke the partial collapse of a football system built on unsustainable piles of debt, competition authorities in Brussels want Spain's government to explain why it has allowed clubs to build up vast, unpaid tax and social security debts.

With many clubs in the top two divisions already having trouble paying bank debts totalling some €3.5bn (£3bn), the move would likely force some clubs into liquidation. Historic names such as Deportivo de La Coruña or Racing Santander could simply disappear. Other top clubs, such as Valencia, will have to sell players and face years of decline.

Indignant MEPs are already demanding to know why Spain is happy to request €40bn in aid from eurozone taxpayers for its banks while allowing the clubs to build up a tax debt of €692m.

Read the full article at the Guardian

Spain Values Bankia Shares at 1 Euro-Cent as Debt Swap Looms

2013-03-23T14:50:29

Spain cut the nominal value of Bankia SA (BKIA) shares to 1 euro-cent from 2 euros in a debt swap that will practically wipe out existing stockholders in the nationalized lender.

The holding company BFA will own about 70 percent of Bankia following a 15.5 billion-euro ($20.1 billion) recapitalization approved by the Frob rescue fund today, an official from the fund said at a briefing in Madrid. Investors who bought subordinated debt or preferred shares will end up with about 30 percent of the bank’s stock.

Spain’s bank rescue fund fixed the price as the basis for converting 4.8 billion euros of hybrid securities including preferred shares and 10.7 billion euros of so-called contingent convertible bonds into stock as part of a 15.5 billion-euro recapitalization of the lender, the fund, known as Frob, said in an e-mailed statement today. Bankia has about 2 billion outstanding shares, which closed today at 25 euro cents.

The Bankia group helped to trigger Spain’s request last year for European aid for its banking system amid concern that mounting losses at Spain’s fourth-biggest lender would contaminate the finances of the government.

The group, which took about 18 billion euros in bailout aid, is now targeting earnings of 1.2 billion euros in 2015 after moving 22.3 billion euros of real-estate linked assets to a bad bank.

Read the full article at Bloomberg.com