Unemployment still rising in Spain

Unemployment rate going up in Spanish Mediterranean Provinces

Sustained by the construction sector, the growth in tourism and agriculture, the economy of the province of Murcia has gone from strength to strength over the last decade with an average annual growth estimated to be around 3.9% since 2000.

However, the current situation appears quite different. Over the last year alone the number of registered unemployed has risen from 45,158 to 68,632 which is a rise of 52%. The growth of unemployment in Murcia is mirrored in other Spanish Mediterranean provinces – unemployment is estimated to have risen by 36.8% in the Comunidad Valenciana alone and by 36.1% in the Balearic Islands.

In these coastal areas the crisis in the Spanish construction sector is particularly noticeable. The construction sector accounts for up to 67% of all employment in these areas. The number of unemployed construction workers has almost doubled in the last 12 months. In other areas such as Malaga, Almeria or Cadiz where employment is closely linked to the construction sector it has risen by a staggering 80%.

In the Canary Islands where unemployment in the construction sector has also doubled over the last year the increase in the number of registered unemployed between June and July this year was mainly due to unemployed construction workers. In the Comunidad Valenciana and Castilla-La Mancha more than two thirds of all newly registered unemployed are workers from the construction sector.

Overall out of all the 36,492 people who became unemployed in July this year 20,231 were from the construction sector. Although the numbers of unemployed construction workers normally increases over the summer months the numbers registering as unemployed this year is far more notable than other years and is seen to be another indicator of the crisis in the Spanish construction sector.

Immigrants are also being affected by lack of work and the number of unemployed foreign construction workers has more than doubled over the last 12 months with 41,437 more unemployed.

Another significant indicator of difficult times ahead for the economy is the situation in Aragon which was the most dynamic region in Spain with a 4.5% growth of in its GDP last year. However, following the completion of work on the Zaragoza Expo unemployment here has risen by 5% over the last month and by 29% since this time last year according to figures provided by the Spanish Ministry of Work and Immigration

Latest figures for foreign tourism in Spain

Number of foreign tourists visiting Spain this year increases

The sun and beaches continue to attract foreign tourists to Spain. In the first 6 months of this year the number of foreign tourists visiting Spain went up by 2.6% to 26.6 million compared to figures for the same period last year.

According to the Survey on the Movement of Tourists published today by the Ministry for Industry, Tourism and Commerce Spain received 5.7 million foreign tourists which is 0.7% less than for the same month in 2007.

Catalonia is the most popular destination for foreign tourists and received 6.6 million tourists between January and June this year which accounts for 24.8% of the total followed by the Canary Islands which received 4.7 million tourists (15.6% of the total). Andalucia was in third place with 3.7 million foreign tourists (14.1% of the total). The Comunidad Valenciana received 2.6 million foreign tourists (10.1% of the total) and the Comiunidad de Madrid received 2.3 million foreign tourists (8.7% of the total).

The survey found that 7.3 million tourists were from the United Kingdom (27.5% of the total) which is 1% more than for the same period last year. Germany is in second place with 4.7 million of its citizens visiting Spain during the first 6 months of this year which is 2.8% more than for the same period last year. French visitors numbered 3.6 million and Italians visiting Spain number 1.5 million.

Out of all the foreign tourists visiting Spain this year between January and June 18.4 million tourists visited independently (7% more than for the same period last year) and the number of tourists visiting Spain which were not on package tours continued to decrease. In fact the number of tourists coming on package tours went down by 6.8% during this period.

Arriving by air continued to be the most popular form of travel with 20.9 million tourists arriving this way (78.5% of the total) an increase of 2.8%. The preferred type of accommodation continues to be hotels (65.9% of the total) which is an increase of 3.8% while the number of people not staying hotels remained the same at 8.8 million which is the same as 2007.

Unemployment to reach new peak in Spain

Spain predicted to have the highest unemployment out of all OECD countries by 2009

The 10.7% unemployment rate predicted next year in Spain will place it at the top of the list of OCDE countries with regards to the number of unemployed in these countries.

This prediction, included in the annual report on Employment Prospects by the Organization for Cooperation and Economic Development (OCDE), is based on the slowdown in the creation of new jobs and is quite far from the average 6% unemployment rate for the rest of the OCDE countries.

It is expected that the unemployment rate will reach 9.7% this year (2.2 million people) and will rise to 2.5 million next year which is above the rate in Turkey, predicted to have an unemployment rate of 10.5% in 2009. In fact, together with Ireland, unemployment is expected to rise significantly in Spain in 2008.
Slovakia comes immediately after Turkey in terms of the number of unemployed in relation to the active population (9.6%) followed by Portugal (7.9%), Greece (7.7%), France (7.6%), Hungry (7.6%), Germany (7.4%) and Belgium (7.2%).

On the other hand Holland with an unemployment rate of 2.7% followed by Norway (2.8%), South Korea (3.1%), Mexico (3.6%), Denmark (3.7%), Japan (3.8%), Switzerland (3.8%) and New Zealand (3.8%) are all at the opposite end of the list.

In global terms the authors of the study calculate that this year there will be a million more unemployed in all the 30 countries in the OCDE, to which another 2 million will be added in 2009. These figures can be understood in relation to the development of the US economy where the unemployment rate is predicted to rise above the 4.6% registered last year (7.1 million) to 6.1% in 2009 (9.5 million).

The biggest increases in the unemployment rate apart from Spain will be in Iceland, Ireland and Turkey while it is expected that it will go down in the Czech Republic, Poland and Slovakia. The OCDE predicts that the creation of new jobs will slowdown from 1.5% last year to 0.7% this year and will reduce even further to 0.5% in 2009.
The study also found that various countries would experience a net destruction of jobs (Hungary, Iceland, Japan, New Zealand and the US) while Spain and Ireland would experience a drop of more than two percentage points. In Spain job creation will go down from 3.1% last year to 0.7% this year and to just 0.3% in 2009. However, this will be countered by changes in the number of unemployed in relation to the number of the active population which will drop from 2.3% to 1.5%.

The report also showed that the difference in employment levels between men and women has gone down by 1.5% over the last 10 years while no change has been registered in countries like the US or Finland over the same period.

Spanish fishing fleets strike over oil prices

Spain’s main fishing fleet give 100% support to strike in fishing sector

According to Javier Garat, the General Secretary of the Spanish Fishing Confederation (Cepesca) nearly 100% of the Spanish fleet, which currently consists of 13,000 boats, have given their backing to a strike.

Given the widespread nature of Spain’s fishing fleet Cepesca has organised an assembly to obtain information on which boats are striking. For example, in Barcelona a part of the fleet has gone out to fish. Nevertheless Garat believes that the decision of the Federation of Catalan Fishing boats call to ignore the call to strike is due to the fact that the organization is waiting to see what happens in the rest of the country.

In Andalucia, some of the fishermen that backed the strikes last week have gone back to work, as in Almeria and Huelva, although part of their fishing fleets have remained in port. The vice secretary of the Federation of Fishermen, Nicloás Fernández, explained that they will be meeting this week to analyze the results of the strike and possible future action.

Garat, has calculated that support for the strike ‘is going to be massive’ during the next two weeks when the rest of the national fleet begin taking part in the indefinite strike called for last Friday to protest against rising fuel costs.
On the other hand, Garat has confirmed that the sector has still not received a reply from the Government to help it out of the present crisis.

However, the Secretary of the National Association of Fish Wholesale Purchasers, Manuel Pablos, said that up to now there was ‘total normality’ and that the protests had not had any significant impact on fish supplies up to now.

He said he considered it ‘very difficult’ for supplies to dry up in a market like that of Madrid, the first in the world in variety of fish available despite similar protests in other countries.

Italia and Portugal continue this week with parts of their fishing fleets on strike in addition to France where after two weeks on strike some fishing fleets have returned to sea. Meanwhile in the UK fishermen have organised a protest to take place in central London tomorrow.

Cepesca has indicated that it is working with French organisations in order to carry out coordinated action in the heart of the EU.

Spanish fruit and vegetable sector.

Fruit and Vegetable exports stagnate while imported produce grow by 20%

According to recent figures fruit and vegetable imports in Spain have grown by more than 20% while exports of Spanish produce have hardly risen at all. In fact, this year so far and 2007 have seen a drop in exports, a situation which threatens the future of this sector if new markets are not found. In addition, Spanish fruit and vegetable producers could face further set backs if new, stricter EU laws on the use of pesticides are introduced .

The production of fruit and vegetables is one of the pillars of the Spanish agricultural sector estimated to be worth around 15,000 million euros. It also accounts for 37% of agricultural produce and generates around 400,000 jobs a year. Exports generated 7,700 million euros last year alone.

For many years the production of fruit and vegetables was considered to be the jewel in the crown in the Spanish agricultural sector due to its capacity for competitive exports, the profits generated and the quality of produce. However, according to the Director of the Federation of Fruit and Vegetable Producers and Exporters (Fepex) all this could be lost if measures are not taken to improve competitiveness .

For Fepex, Spanish producers have lost their capacity to compete against producers from northern EU states which grow produce in greenhouses and are subsidised for using clean energy and which have the advantage of being located near their main export markets. Spanish producers have also lost their competitive edge against cheaper imports from other countries.

According to statistics for 2007, 9.58 million tonnes of Spanish fruit and vegetables were exported, a drop of 1.15% compared to 2006. However, they sold for 7,687 million euros which is 4% more than the previous year.

On the other hand, during the same period imports grew to 2.56 million tonnes estimated to be worth 1.486 million euros, which is a growth of almost 24%.
EU member states account for 93.48% of the Spanish fruit and vegetable export market with the UK, France and Germany as the main buyers together with the emerging Polish market. However, these countries also receive cheaper exports from other countries and from northern European producers such as Holland.

Unemployment rising in Spain

Unemployment continues its upward trend in April for the first time since 1996

Official unemployment figures went up by 37,542 in April, a month which is usually good for employment statistics. This is the first time since 1996 that unemployment has risen with respect to March. According to the Ministry of Work and Immigration there are now 2,338,517 registered unemployed workers in Spain.

In fact unemployment has risen by 315,393 (15.59%) over the last twelve months. Last year unemployment dropped by 36,327 in April which is almost the same number that it has risen this year.

Following favourable figures for March when the number of registered unemployed dropped by 14,356 following five consecutive months of rises, unemployment rose in April mainly due to unemployment in the construction sector with a rise of 16.647 more people in this sector without a job (5.2%) and in the service industry with 17,455 more unemployed (1.2%).

The highest rise in unemployed has been among men with 28,230 more unemployed (2.9%), while in comparison unemployment among the female working population only rose by 9,312 (0.7%). At the end of April the total number of unemployed men was 996,715 and the total number of unemployed woman was 1,341,802. Compared to figures for April 2007 male unemployment is up by 30% and female unemployment by 6.7%.
Unemployment among the under 25 year olds has risen by 6,852 which is 2.5% more compared to March. For the over 25 year olds unemployment has risen by 30,690 (1.5%).

Unemployment went down in 5 regions in April: Baleares had 3,951 less registered unemployed, the Basque Country had 833 less and Navarra 618 less. On the other hand, unemployment went up in 12 regions headed by Andalucía with 8,928 more, and Catalonia with 7,747 more registered unemployed.

In contrast, the number of contracts for new jobs went up by 5.3% compared to April 2007 with a total of 1,459,666 new contracted jobs which means that it was the best month on record for this statistic. Permanent contracts accounted for 12.97% of the total which is an annual increase of 12.05%.

Unemployment figures confirm economic crisis

Unemployment goes up by 246,600 in first 3 months of 2008

The unemployment rate in Spain is now 9.63%, which is its highest level in the last 3 years. According to official statistics there are now 246,600 more unemployed than at the start of 2008. Even the Minister for the Economy, Pedro Solbes, described these figures as negative and went even further to say that the unemployment rate could continue to rise in the near future. The total number of unemployed now sits at 2,174,200. In the first quarter of 2008 it is estimated that 74,000 jobs were lost.

Last Tuesday, Solbes admitted that unemployment figures had not, in his opinion, reached their peak and said that unemployment could continue to rise. However, he also reminded people of worse times in the past when the unemployment rate in Spain reached 20% and said that 8%, 9.5% or even 10% would be the highest it would reach this time.

The Minister for the Economy also tried to find something positive to say in a rather negative panorama by pointing out that the number of people with temporary contracts had gone down by 148,100. while people with permanent jobs had increased by 88,900.

Solbes also explained that the rise in unemployment had been predicted by the government and was partly due to seasonal unemployment. He also pointed out that the number of people in the labour market had increased by 172,000 in the first three months of 2008 and by 651,100 in 2007. This increase in those seeking employment was partly explained by the increasing numbers of women joining the workforce.

Nevertheless, figures give a more pessimistic outlook and compared to the previous quarter unemployment rose by 96,300 in the service sector, by 71,100 in the construction industry and by 27,800 in the industrial sector. On the other hand it went down by 2,300 in the agricultural sector. The number of people who had been made redundant more than a year ago went up by 41,400 and unemployment among those seeking their first employment rose by 12,200.

Unemployment has gone up in 15 different regions, the highest rise was in Navarra (44,74%) followed by Cantabria (39.42%) and the Canary Islands (34.44%). In absolute terms, unemployment has risen by 39,000 in Catalonia, 38,700 in the Canary Islands and 37,500 in Andalucia while it has gone down in Extremadura by 1,900 and the Basque Country by 1,500.

Region in Spain with highest total personal income

Inhabitants in the Basque Country the richest in Spain

The Basque Country has overtaken Madrid as the area of Spain with the highest capita per inhabitant. Figures published yesterday by the Spanish National Institute of Statistics (INE) showed that GDP per inhabitant in Madrid was 29,965 euros compared to 30,599 for inhabitants in the Basque Country. Extremadura and Andalucía remained at the bottom of the list although figures show that the difference in GDP between parts of Spain is going down year by year. The average income per inhabitant in Spain is now estimated at 23,396 euros.

This is the first time that Madrid has lost its place at the top of the list since 1995 when the INE began to publish these figures although this change has been put down to more to changes in the Basque Country’s demography to its economic growth. In fact, the economy in the Basque Country has grown less than the national average over recent years. However, the population has hardly grown at all. Since 1995 it has only grown by 2.3% while the population of Madrid has increased by a massive 21%.
Income per inhabitant has fallen in the Balearic islands. Figures for 1995 showed that income per inhabitant was equivalent to 120% that of the national average while now it is just 108%. However, the population in this part of Spain has also grown by 37% over the last 12 years. Furthermore, the incorporation of more workers in its economy has not led to economic growth. The Canary islands is also a similar case.

The figures just published for 2007 show that Catalonia has the highest GDP in Spain valued at 196,000 euros, followed by Madrid, Andalucía, Valencia and the Basque Country. Aragón showed the biggest growth at 4.5% compared to an average growth in GDP of 3.8% for the rest of Spain. The INE showed that Aragón, Castilla-La Mancha and Galicia all had thriving economies with strong manufacturing sectors. Economic growth in Aragon was attributed mostly to building work in preparation for the Expo which starts in June.

Since 2000 average annual growth in Murcia has been the most intense at 3.9%, followed by Andalucía at 3,7%, Extremadura and Castilla-La Mancha (both at 3.6%). These four communities together with Galicia which has experienced renewed growth over the last 2 years are all at the bottom of the list in terms of income per inhabitant. However, it is also clear that regional differences are decreasing. For example, GDP in Extremadura has gone from 64% of the national average to almost 69%.

Finally, figures published yesterday show that there are six regions in Spain with income per inhabitant above the EU average of 24,700 euros.

New tax rebate in Spain

Solbes announces that the 400 euros tax cut will be included in the first ministerial meeting

The Spanish Vice-president, Pedro Solbes, confirmed in an interview with CADENASER this morning that the electoral promise to give back 400 euros in tax rebates will be approved at the first ministerial meeting of the new government. He said that the government’s intention was to approve this measure as quickly as possible and make it effective retrospectively from the 1st January this year so that the tax rebate would be applicable for the whole of 2008. Solbes also added that that tax payers would notice the effect on their monthly salary immediately and as a consequence be better off.

Economic "slowdown", not "crisis"

Solbe, also the Minister for the Economy, insisted that Spain was not facing an economic crisis but that it was experiencing an economic slowdown. He said that unemployment would rise less this year, especially if the rate of immigration decreases compared to numbers for the last few years. He said that if economic growth stayed at around 3% then more than a million and a half jobs would be created and the unemployment rate would go down to below 8%. Although he added that it was the government’s intention to create two million new jobs.

With respect to negotiations taking place between PSOE and other political parties Solbes said that his party would be happy to work with all groups who were prepared to support the PSOE in its next legislature. Speaking about PSOE’s relations with the PP, he said that the government had always held out an olive branch to Rajoy and would continue doing so in the future.

As far as extending the time for the payment of mortgages, one of PSOE’s key electoral campaign issues, Solbes said that at present his department was working on the definition of families with ‘special difficulties’. He stressed that this was also one of the government’s priorities. He said that first an agreement with the financial sector and notaries was required before this issue could be resolved. However, he pointed out that the beneficiaries of this measure would not incur any extra costs.

The Vice-president also said that the new government, led by PSOE, would work on other social issues such as helping women get into the labour market.

As far as the decision by the EU tribunal which has declared that the government placed illegal conditions which prevented the German energy giant E.ON from getting a foothold in Spain, Solbes said that it hadn’t been the government’s intention to exclude this company but that the government also had to protect Spain’s strategic rights. He added that it was a complex issue because at present there was no liberalization regarding the exchange of energy between EU countries.

Finally, Solbes commented on the issue of property prices. He said that it was the government’s long term objective to see property prices rise in line with inflation.

Economic growth in Spain in 2007

Spain heads economic growth amongst developed countries in 2007

Last week figures on the economy published by the Spanish National Institute for Statistics (INE) lived up to the government’s expectations. The figures on economic growth in 2007 showed a notable increase in GDP at 3.8%. For the third consecutive year the Spanish economy grew more than the economies of members of the G7. Furthermore, it grew more than the average for EU countries (2.9%) and more than any other country in the euro zone (2.7%).

In fact the INE only noticed a slight slowdown in the last quarter of 2007 with a growth of 3.5% compared to 3.8% for the rest of the year.

The IMF and OCDE predict a notable slowdown in the Spanish economy this year with an estimated growth of between 2.5% and 2.7%, although government estimates are slightly higher at 3.1%. If the most pessimistic predictions are fulfilled then 2007 will be the culmination of an excellent decade of growth for the Spanish economy, at least in terms of the growth in GDP which over the last ten years has always grown above 3% (except in 2002).

During the last few years the Spanish economy has grown at a higher rate than those in the G7, something which has given further justification to Spanish governments' requests to be given a place in the group. However, while the Spanish GDP has now overtaken that of Canada which is a member of the G7 although it is still far behind that of emerging world economies such as China, India or Russia, none of which are members of this exclusive club.

The opposition PP party, who are accusing the Government of mismanaging the economy in the election campaign, seemed irritated by the report and warned the Statistics Institute to exert caution when publishing figures in an electoral period.

Unemployment rises in Spain

Unemployment in Spain up by 8.6% in 2007

Following a 4 year period in which unemployment dropped steadily the number of unemployed went up by 117,000 in 2007 which is 6.46% more than in 2006. According to a survey of the active population presented today by the National Institute for Statistics (INE) the total number of unemployed now stands at 1,927,600 and the rate of unemployment is now 8.6%

José Luis Caldera, the minister in charge of employment has admitted that the rise of 6.46% is not very positive. He said that annual figures were positive although figures for the last quarter of 2007 were not. He insisted that there was no cause for alarm and he attributed the rise in unemployment between October and December last year to problems in the construction industry and related services in which 72,000 jobs were lost during this period.

According to Caldera, the loss of so many jobs in this sector is directly related to problems in the US housing market which led to the loss of investment in the sector and to the drop in property sales.

Caldera highlighted the creation of 46,000 jobs in industry and agriculture in the last quarter of 2007 and placed special emphasis on annual figures for 2007.
According to the results of the survey presented today by the INE employment in service industries went up by 482,000 and 70,000 new jobs have also been created in the construction industry despite the loss of jobs in the last quarter of 2007.

Caldera also pointed out that despite the rise in unemployment last year it is still 3 points less than when PSOE took over the government. In fact since the present government came to power 3,900,000 jobs have been created.

Spanish Catholic Church sells land to settle debts

Church makes a 19 million Euro profit over the sale of land in Ávila

The town hall in Ávila has paved the way for the diocese there to make a huge profit over the sale of land which had been previously regraded for industrial use by the local government run by the PP.

The land was given to the church by the Marquesa de Muñoz in 1969 through the creation of a religious foundation in her name. The value of this land shot up when it was regraded for industrial use in 2005.

Almost a million square metres if the land has been sold to Habit Business Initiatives S.A. which bought it is believed bought it for 19 million euros. The local government run by the PP justified its decision to regrade the land saying that Ávila needed more industrial land when in reality the present industrial estate hasonly developed to 60% of its capacity. Furthermore the town hall in Avila did not receive any land for future projects in the public domain.

The money will be used to pay off the huge debts accumulated by the Catholic university estimated to be in the region of 1000 to 1200 million pesetas. This debt has been building up since the creation of the university in 1996 on the initiative of the then bishop of Ávila, Antonio Cañizares, which was also supported by Ángel Acebes the then mayor of Ávila together with Sebastián González, now number 3 in the PP and then the president of the provincial government of Ávila.

Related: Buying land in Spain

European Commission predicts a fall in the construction industry in Spain

According to forecasts made by the European Commission based on information provided by the association of large construction companies, Seopan, investment in the construction sector in Spain dedicated to building houses and flats is predicted to fall by 1.2% next year. It is also predicted that it will continue falling by up to as much as 10% over the next few years. These figure contrast sharply with the 3.5% growth expected in this subsector for 2007 and the 6.4% growth recorded in 2006.

The drop in the construction of homes is the principal factor behind the slowdown in the Spanish construction industry predicted for 2008. It is expected that investment in construction will only grow by 1.3% in 2008 which is substantially less than the 4.4% forecast for this year and drop further in 2009.

Other sectors of the Spanish construction industry are expected to continue growing with a 4% rise in activity predicted for next year and 3.8% for 2009 even though these figures show a definite slowdown in the sector as a whole compared to 5.3% growth expected for 2007.
Spain together with Ireland and Portugal are the 3 countries in the Euro zone where an annual fall in the construction sector has been predicted for the period 2007-2009. In terms of the Euro zone as a whole a gradual decline in the construction industry has been predicted from a 3.5% growth rate this year to just 1.3% for 2009. A growth of just 2.2% is expected for 2008.

These figures contrast with those for Eastern European countries which are not in the Euro zone. Most of these countries are receiving large sums of European funds and a growth rate of up to 30% is expected in the construction sector there.

For example in Rumania the construction industry has grown 29.5% this year and is expected to grow by 21.5% next year and 17% the following year. In Poland the construction industry has grown by around 20% this year and is expected to grow by 10.8% in 2009. Lithuania and Slovenia have also seen significant growth in their construction industries.

Large Spanish construction companies and estate agents such as FCC, Acciona, Ferrovial and Fadesa, have anticipated these events and many of them have established themselves in these new emerging markets in Eastern Europe.

Related: Property market in Spain

Spanish economy slows down

INE announces a slow down in the Spanish Economy

The Spanish National Institute for Statistics has confirmed that GNP went down by 2 decimal points to 3.8% between July and September this year. However, it still comes within the boundaries set by the government for 2007.

According to the institute although the Spanish economy continued growing above the average for the rest of the 27 EU countries and the Euro zone its profile is contrary to other European countries which saw their economies pick up slightly while in Spain it has continued to slow down for 2 consecutive quarters. In the first quarter for 2007 it reached its peak growth for this year so far at 4.1%.

The reasons for this slow down in the economy appear to be less consumer spending which only rose 2.9% - 4 decimal points lower than the previous quarter and investment in the construction industry which only grew by 3.8% - 8 decimal points lower. Within this sector the biggest drop has been the reduction in the construction of housing – 2.9% compared to 3.7% for the previous quarter.

Investment in companies is also growing less although it remains strong at 11.2%. Industry grew by just 2%. However, this is partly compensated by the fact that exports grew well. Productivity grew 0.8% which places it at the same level as the last quarter.

As far as employment is concerned this continued to grow well - 560,000 full time jobs have been created over the last 12 months.

Santander Bank and its partners take over ABN Amro

Today Santander Bank, together with its business partners, the Royal Bank of Scotland (RBS) and Fortis will officially become the new owners of the Dutch financial group, ABN Amro, for the price of 71,000 million euros after outbidding the British bank Barclays.

The purchase of the Dutch consortium means that ABN’s assets will be distributed between the three banks. Santander bank will take over the Royal Bank of Brazil and the Italian bank Antonveneta at a cost of around 19,850 million euros. RBS, will pay around 27,200 million for their share in the company and Fortis will pay around 24,000 million for their share in ABN Amro.

This operation is significant for Santander because it means taking a lead role in Italian banking which is a difficult market for foreign companies to break into.
Santander which is led by Emilio Botín is hoping to introduce some new banking practices and improve the efficiency of Antonveneta which it hopes will lead to improved profits.

Antonveneta is the 7th largest Italian bank and the 6th most important in the north of the country where most of Italy’s wealth is generated. It is considered to be an excellent platform from which to develop the market for mortgages and loans.
Santander is also strengthening its position in the Brazilian financial market where it already owns and controls Banespa, the 6th largest bank in Brazil. It will now be the 3rd largest company in terms of offices and the volume of lending.
Botín said that the purchase of ABN Amro was one of the largest operations the bank had ever undertaken and that the purchase of the Royal Bank of Brazil was the jewel in the crown.

Related: Santander Bank profits soar after Abbey takeover # Santander Bank announces new profits

Self employment in Spain

New Laws Governing Self Employment in Spain come into effect

The news laws governing self-employment in Spain which have taken 3 years of careful negotiations came into effect this weekend. The various measures included in the new laws will be implemented in phases.

One of the new measures is that the self-employed, or autonomos as they are called in Spanish, can now contract their children under 30 years old.

From the 1st January 2008 when the new Spanish financial year begins, self employed workers who pay according to the Régimen General system and more specifically those who work under the RETA scheme will have the right to reduce their costs.

According to the President of the Association of Self Employed Workers in Spain disabled self-employed workers, those who travel and work and those who work in direct sales should have their costs reduced.

The minimum wage established under the proposals for next year is 700 euros which according to the Association of Self-Employed Workers in Spain needs to be reduced to 380 euros in order to make it worthwhile registering as self-employed.

There are other aspects of self-employment laws that need to be developed further such as the working contract between autonomos that obtain more than 75% of their income from one client. This group of self-employed workers, known as TRADE workers will be allowed at least 18 days unpaid holidays and will be able to sign interprofessional agreements with their employers. The government has a maximum of one year to pass a law that regulates the type of contracts and the possibility of creating a register of TRADE workers that could be governed either by each regional authority or the state.

Sebastián Reyna, the General Secretary of the Union of Professionals and Self-Employed Workers, believes that the recognition of TRADE workers is one of the most important aspects of the new laws giving security to this emerging group and will also give these workers the opportunity to have a ‘full professional career’.

The government still needs to pass a law which regulates payment to the self-employed who suffer accidents while at work, those who suffer from work related illnesses and those who work in dangerous or harmful conditions.

Ryanair withdraws advert uses Spanish PM

Ryanair withdwaws Zapatero publicity campaign after the advert published in the Spanish press yesterday received wide criticism

Spanish president José Luis Rodriguez Zapatero was for one day the star of the latest Ryanair publicity campaign. In allusion to the Spanish government's recent decision to give mothers 2.500 euros per newborn, the full-page advert, published in several national newspapers yesterday, had a photo of the Spanish Prime Minister and the slogan: What is better? Two million free flight seats or 2500 euros for every newborn baby?.

The advert was received with general surprise in Spain yesterday, and Ryanair was criticised by some analysts for using the image of Zapatero without his consent. Government sources confirmed that they were "surprised" that the company had used a photo of the Spanish PM without having sought permission beforehand, but they said that the government did not find the advert offensive and would not be taking legal action against the cheap flight company.

Maribel Rodríguez, the head of Rynanair in España and Portugal told media yesterday that the company just wanted to make a joke which is why the image of Zapatero was used, but that it was not their intention to ridicule the Spanish president or government policy, nor to offend anyone. In the press note released in the morning, Rodriguez wrote: ‘we don’t want to make fun of anyone and we just wanted to have an amusing advertising campaign to publicise a fantastic offer". Rodríguez said that she was sorry that the advertisement had been misunderstood by some and seen as making fun of the government’s economic assistance and said that ‘we are an airline not politicians’.

Later on in the day, Ryanair said it would be withdrawing the advert and said that its objective - to catch people's attention with a bit of humour - had been fulfilled (which is putting it mildly - even we've published it!!).

Rising interest rates in Spain reach their peak

Spanish Finance Minister says that interest rates have reached their peak

Pedro Solbes, the Spanish Vice–President and Finance Minister said yesterday that interest rates have reached their peak and are likely to stabilize or even start to drop in the near future.

In an interview with Spanish television channel Antena 3, Solbes admitted that mortgages had risen for those mortgage holders with variable rates and were starting to be more expensive than renting. He insisted that it was abnormal to have to pay more to rent a property than to buy it and that this particular situation was beginning to change.

The Spanish Vice–President also said that despite the international situation regarding mortgages he didn’t foresee any significant changes in the Spanish economy because the government had gone to great lengths to improve inflation, keep the economy healthy and maintained a favourable budget. Solbes also said that the Spanish economy would continue to grow at the predicted rate.

Solbes indicated that the rate of inflation (IPC) was dropping considerably and was now at 2.2% although he said that next month it could go up once again due to the rise in the cost of petrol, amongst other things. The Finance Minister said that the worldwide demand for cereals together with a very poor crop in Europe (although not in Spain or Portugal) had caused the price of wheat to rise causing, in turn, the much publicised rise in the price of bread and other basics this month. Solbes also added that a similar situation had occurred with milk given that production in Europe had been less than normal while demand had increased.

Island for sale in Spain

Island off Lanzarote on sale for 9 million euros

Montaña Clara, an island 2.7 km2 which is located to the north of Lanzarote and within the boundaries of the Archipelago Chinijo Nature Park is being offered for sale to the highest bidder. The island was first acquired 50 years ago by López Socas, the then mayor of Haría, in Lanzarote.

The present owners went to a national chain of Spanish estate agents, in order to gain more publicity and extend the number of possible buyers. However building is not allowed on the island as it has special protection and is part of a nature reserve as well as being a bird sanctuary.

The promotors hope that a possible buyer could be interested in investing in the island as a patron attracted by the natural heritage and also certain tax benefits. It has been reported that two possible buyers have emerged - a financial institution and a Dutch family - but the sellers are hoping the Spanish state will intervene and purchase the island. The promoters estimate that the sale could take up to a year. The price has been calculated per square metre based on prices for similar land on Lanzarote which works out at just over 3 euros per metre. This morning the Spanish Environment Ministry claimed that because of the famous Ley de Costas (Coastal Law),which declared the Spanish coast public property, the perimeter of the island already belongs to the state and cannot be sold into private hands.

Montaña Clara island gained its name due to the light colour of the peak of the volcano rock there which covers a large part of the island. The highest point on the island is La Mariana at 256 metres high.

Montaña Clara also forms part of one of Spain’s largest marine reserves, the second largest in Europe, as well as being a refuge for a large number of birds. Any possible buyer of the island will have the responsibility of protecting the environment and maintaining this unique natural area.

Montaña Clara isn’t the only private island in the area. Alegranza, which is owned by the Jordán family is currently in the process of be transferred to state ownership.

Related: Buying land in Spain

Young Spaniards reluctant to rent property

The Government’s new housing policy which aims at getting more young Spaniards to rent has come up against an unexpected pitfall – that those it is aiming to help reject the idea of renting.

The results of a government survey of young people between 20 and 30 years old showed that renting is not at all popular in Spain. More than half of those questioned expressed their desire to buy their own property despite government help towards renting. In fact around 60% said that the price of renting and monthly mortgage payments were quite similar and therefore opted in favour of buying property whenever possible.

These findings underline the fact that Spain tends to be a country of house buyers rather than renters. The European average for tenants living in rented accommodation is 38% but in Spain this figure drops to just 11%. The Ministry for Housing has acknowledged that in order to reverse this trend, renting needs to be not only cheaper but they also need to convince the young that it is an attractive option.

The results of the survey published yesterday indicated that the 1000 young people questioned would not be interested in renting, even if conditions were to become more favourable. Among some of the reasons they cited against renting were the bad state of rental accommodation, lack of guarantees for continuing a lease and the high deposit or bank guarantee required in order to be able to sign a rental contract.

When those questioned what price they would be happy to pay for renting a flat they said 350 euros with a maximum of 475 euros. However, in reality most rental contracts for flats of 100 square metres cost around 720 euros a month, rising to an average of in places like Madrid or Barcelona.

As far as economic help is concerned most people said that there should be more help towards buying rather than renting. A government spokesperson has said that more information is to become available about economic incentives available to help towards the cost of renting.

See: Renting property in Spain

Iberia earnings grow in 2007

Iberia obtains best half-yearly results for 5 years

Iberia has made a profit of 74.8 million euros in the first 6 months of this year, its best economic performance for 5 years. This also contrasts with the first 6 months of 2006 when it recorded a loss of 9 million euros. The company has put this turn around in its economic performance down to filling more seats - 80.2% of seats were filled - together with a drop of 0.7% in running costs. In addition, operating profits reached 70 million euros which is also better than results for the same period last year.

Income per passenger which makes up 80% of the total increased by 2.1%, at over 2 million euros, while ticket sales reached 155.1 million euros which is 6.2% more than last year. Handling costs dropped by 12.5% to 147.3 million euros and income for maintenance work carried out for other companies increased by 27.4 per cent to 131 million euros.

Running costs dropped 2.3% to 2.59 million euros compared to 2.66 million euros for the same period in 2006. Fuel costs, which make up 20.5% of the company’s total running costs, were 532.6 million euros a drop of 28 million euros with respect to the same period last year.

In the first 6 months of 2007 Iberia carried 13.18 million passengers. Furthermore, during this period Iberia has started operating 5 new routes, all of which are in strategic markets. Iberia now operates new routes to the US with flights to Boston and Washington, Eastern Europe with flights to Bucharest and St Petersburg and North Africa with flights to Algeria.

Cold meats with Omega-3 pioneered by Spanish company

Grupo Frial, a Spanish company based in Madrid, is rapidly becoming one of the World's pioneers in incorporating vital components such as omega-3 and anti-oxidants in popular foods like cold meats, sausages and patés.

Despite its relatively small size - and despite the fact that private investment in research in Spain is nowhere near as common as in many other developed countries, Frial has invested millions of euros in R+D projects with the Autonomous University of Madrid. Since becoming the owner of the first ever international patent in functional meat products in 2005, investment in research has continued to grow, and Frial spent 10 percent of its income on research.

The company's main driving force is its chairwoman, Paloma Frial. One of Spain's most dynamic business women, Frial started working at the company when its founder (her father), Ramon Frial died. She took over the control of the company when she was eighteen, determined to instill in the company the values which her father had always defended - "responsability, quality and teamwork", and to concentrate her efforts on ensuring that her father's name would become a reference for quality and research in the food industry.

In 2003 Frial and a team of scientists from the Food Sciences Research Group at the Autonomous University started investigating means of incorporating components known to be beneficial to health into some of the cold meats produced by Frial. The result was Vidalim, a formula combining Omega-3 and natural antioxidants which is included in the production process so that the resulting FrialVida (which means FrialLife) products have the added value of containing substances which are known to fight radicals and help to prevent certain diseases.

In declarations to the Spanish newspaper Cinco Dias, Paloma Frial explains further: "All FrialVida products (turkey breast, ham, sausages, beef and roast pork loin) retain all their flavour, quality and nutritional value, but thanks to the incorporation of our patent, they are even more healthy because they balance the content of polysaturated fats and help the prevention of chronic illnesses, aswell as other signs of deterioration related to age".

Frial was named Best Spanish Foods Company in 2005, an award given by the Spanish Food, Agriculture and Fishing Ministery, and this year has been awarded the Madridfusion prize. Since launching the new FrialVida range last year, the company has started exporting to Greece, Portugal and France, and has received enquiries about the patent from the USA and Japan. Companies and research teams wishing to contact the company can do so by emailing Frial at pfrial@grupofrial.com

Related: Grupo Frial

Online banking profits soar in Spain

Online banking profits soar by 71.4%

It wasn’t long ago that online banks in Spain accumulated losses. However, a couple of years ago online banking began to be more profitable due to an aggressive commercial policy aimed at attracting new clients and this year's figures indicate that Spaniards are using e-banking more and more.

In the first financial quarter of 2007 Spanish online banks Inversis, Bancopopular-e, Uno-e and Openbank gained 12.32 million euros in profits which is 71.4% more than for the same period last year according to figures just released published by the Spanish Association of Banks (AEB).

The main reason for such a sharp rise in profits for online Spanish banks has been the phenomenal growth of Openbank, a member of the Santander Group, whose profits quadrupled to 4.3 million euros for the first financial quarter this year.

Inversis also experienced a substantial rise in profits of 1.58 million euros for the first quarter this year compared to just 460,000 euros in the same period in 2005. Uno-e, an internet susidiary of BBVA, increased profits by 53.9%, to 5.24 millon in the first quarter of 2007, compared to 3.4 million for the same period last year which makes it the most profitable Spanish online bank.

Bancopopular-e, saw its profits fall and was the only online bank not to improve on last year’s performance. In fact it only registered a profit of 1.18 million euros in the first quarter of 2007 which is 56.4% less than last year.

Openbank was the clear winner when it came to savings accounts with its clients depositing 3,901 million euros, 84% more than all the other Spanish online banks put together. The online branch of Santander Consumer Finance began 2007 by rising interest rates on deposit accounts.

Uno-e came second with deposits of 1,183 million euros followed by Inversis, with 613.5 million euros and Bancopopular-e with 331.04 million euros.

However, the online branch of Banco Popular conceded the most credit to its clients at 1,065.5 million euros followed by Uno-e which granted 967.9 million euros in credit, Openbank came far behind granting just 199.2 million euros to its clients and Inversis came last conceding just 126.6 million euros in credit.

Related:
Ranking of Spanish banks
Spanish banks
E-commerce in Spain

Spain falls further behind in new technologies

Spain falling behind technological advances

According to a study carried out over the last 7 years aimed at finding out which countries in the world are the most innovative in terms of adopting new technologies, the present Spanish government has failed in its pledge to get Spain out of the rut it has occupied in innovation and new technology.

The study, carried out by The Economist, analyses almost 100 quantitative and qualitative parameters. This year Spain comes just 26th out of a total of 69 countries included in the study. The country which tops the list is Denmark for the second time running while he US and Sweden share second place.

The study looked at the infrastructure of information technologies in each country, its use by citizens, companies and the government and its involvement in the development of these technologies. According to the report their classifications allow each government to judge its technological initiatives against that of other countries.

The study also analysed 6 categories under the principle that digital development of a country affected its social, cultural and political structure, technological infrastructure and communications, the business, social and legal setting and the vision of the government and the adoption of new technologies both by companies and individuals. Spain does not make it into the top ten in any of the above concepts and its overall classification is just 7.29 out of 10.

According to the study the quantity and quality of Spain’s infrastructure appears to be its worst category with a ranking of just 6.70 out of 10 - one of the lowest rankings for all the EU countries in the study. This concept looks at the opportunity for individuals to connect to the internet and the availability of broadband internet connection as well as the number of mobile phones. In statistics published in the Eurobarometer Spain is just above the average of 25% of homes with mobile telephones and land lines but below figures for households with computers and access to broad band internet connection.

In terms of government vision and policies in new technologies, Spain earns a mark of 7.25 which is also below other Western European countries, including Malta and Italy, and extremely low when compared with Denmark (9.85).

Spain also ranks badly in the categories of business environment, which analyses the facilities for the creation and development of high-tech companies, and adopting new technologies in a social-cultural setting.

Related:
Domestic use of new technology in Spain
Online shopping in Spain
E-commerce in Spain
E-commerce sector in Spain
Online shops in Spain

Expansion of Santander Group

Record Profits for Santander Group

Santander Group obtained 1,802 million euros in the first quarter of this year which is 20.7% more than the same period in 2006 according to an official spokesperson.
Fortis, Royal Bank of Scotland (RBS) and Santander announced today that they have informed ABN Amro of their intention to launch a takeover bid for 100% of the social capital of the Dutch company.

Santander Group attributes the rate of growth in profits to the fact that money received by the group was more than double their costs.

The takeover bid depends on the terms of the contract that ABN has signed with the Bank of America with respect to LaSalle Bank. Barclays, who are also interested in taking over the Dutch entity, has placed the condition that ABN sells its subsidiary company LaSalle to the Bank of America. The new offer led by Santander Group however, places the condition that the Dutch bank does not get rid of LaSalle.

Dutch legislation forbids publicising the price of the offer for the timebeing although Santander, Fortis and RBS communicated their offer of 39 euros per share for the bank last Wednesday which would appear to be 13% more than Barclay’s latest offer of 75.500 million euros.

Santander, Fortis and RBS argue that their take over bid offers significantly more value for shareholders and advantages for clients and employees than Barclays'. They have requested a reply from ABN as soon as possible.

Related:
Santander Bank
Ranking of Spanish banks
Spanish banks

This year tax payers in Spain can declare taxes via txt messages

Tax-payers in Spain will be able to make the annual tax declaration by text message or TDT interactive digital television

Tax declarations can be submitted as from the 2nd April for those people who accept their calculations sent by the Tax office. Confirmation of tax calculations can only be made when they are negative or result in zero.

For the first time tax declarations will be available using TDT interactive digital television using a decodifier and a telephone connection to be able to send information to the Tax Office using the TDT remote control. For example to apply for your tax calculation you would need to press in your national identity document number (DNI) together with the information from the box marked 681 from your last tax declaration – the same method as via the internet. Information will be sent in coded language directly between the person making the tax declaration and the Tax Office.

Tax declarations can also be made by sending a text message to 5025 with the message RENTA space the number of the form space Company Number (NIF). If making a joint declaration then you will need to leave a space between the first and the second NIF.

The reference number and the form number are those which appear in the tax calculation. Using this information together with your NIF is all you need to process your declaration.

As usual you can make your tax declaration via the internet with a reference number or by telephone by calling 901 121 224 (automatic - 24 hours) or 901 200 345 (with assistance), using electronic or telephone banking or by going to the Tax Office in person. As well as confirmation of tax calculations you can also obtain information on tax and property values.

Related:
Property taxes in Spain
Lower taxes for non-residents in Spain

Financial services for immigrants in Spain

BBVA Bank to open special branches just for immigrants

The BBVA bank has decided to take maximum advantage of its branches by splitting the activities that are carried out in them. It has plans to open 30 ‘duo’ branches. Each of these offices will operate like a normal bank in the mornings and in the afternoon they will be prepared for use by immigrants, similar to the Dinero Express offices.

At 3 pm a screen will be used to divide the area normally used by the public in the mornings and a separate area with facilities like individual telephone booths, DHL cardboard boxes prepared for sending parcels abroad, and lists of properties on sale will be available. Applying for credit or a bank card and making a deposit will also be possible.

This part of the bank will be open until 10 pm and is intended to meet the special needs of immigrants. These branches will also open on Saturdays and Sundays.

According to Miguel Angel Muñoz, the BBVA Director of Banking for Immigrants, the branches will have staff made up solely of immigrants whose working conditions will be established according to the standard office workers agreement rather than the standard agreement for bank employees. The BBVA forecasts attracting 180,000 more immigrants to use the bank in 2007, a figure which would surpass a total of 700,000 immigrant clients.

Related:
Spanish banks
Ranking of Spanish banks

Wealthiest areas of Spain

Navarra has the highest income per family

According to an article in El Pais, Madrid once again topped the 2006 table in the annual Fundación de las Cajas de Ahorros (Funcas) study which looks at economic growth within all the Spanish regions. According to their most recent survey Spanish GDP grew by 4.2% (3 tenths above that predicted by the National Institute for Statistics). The Comunidad de Madrid’s economy grew the most by 4.5%. However, Navarra came top of the table for disposable income per household (14,967 euros) compared to Madrid (14,852 euros) and the Basque Country (14,538 euros).

Madrid, the Pais Vasco and Navarra, are also the regoins with the highest GDP. Cataluña comes fourth in the table while Andalucía and Extremadura remain at the bottom of the list in terms of disposable income and GDP.

The study was carried out by Julio Alcaide, a leading economist. He indicated that the construction industry in Spain was the most dynamic making up 5.4% of the country’s economy. He also says that the economy in 7 regions saw above average growth in 2006. These regions were Murcia (4.4%), Andalucía (4.4%), Extremadura (4.3%), Castilla-La Mancha (4.3%), País Vasco (4,3%) and the Comunidad Valenciana (4.2%) as well as Madrid whose economy also experienced above average growth.

The Funcas study also looked at the evolution of regional economies throughout Spain over the last 7 years and according to the results Murcia saw the highest growth in GDP per inhabitant at 4.14%. With the average growth in GDP per inhabitant at 3.2% in Spain other regions which experienced above average growth were Andalucía (3.6% ), Madrid (3.5%), Cantabria (3.5%) and the Comunidad Valenciana (3.3%).

The Spanish economy performed well in comparison with the rest of Europe. Average Spanish income reached 94% of the average GDP per inhabitant in the Euro zone and 100% of the average for the European Union’s 27 members.

Funcas also pointed out that GDP per inhabitant in the region with the weakest economy, Extremadura, grew from 48% of Madrid’s average in 2000 to 53% in 2006.

Spanish banks affected by hackers

People who receive and send emails are used to receiving fraudulent emails claiming to be from a financial institution asking for personal information regarding bank accounts.

In January hacking into banks and building societies in Spain resulted in fraud totalling 9 million euros according to the Spanish ‘Asociación de Internautas’. Banesto, Santander and La Caixa suffered the most attacks from hackers.

Víctor Domingo the president of the ‘Asociación de Internautas’ said that other institutions such as the National Statistics Institute were also under attack, something which hasn’t happened before.

It is believed that the hackers who carry out these attacks come from European countries such as Rumania or Bulgaria which makes it almost impossible to prosecute the perpetrators.

Related:
Spanish banks
Spanish savings banks

Online shopping in Spain

68% of internet users in Spain shop online according to a study carried out by the Interactive European Advertising Association on European consumer habits and the internet.

France and Italy were also included in the study. The results showed that Spain occupies a middle position with France coming above Spain with 75% of internet users buying online. Italy came below Spain with 54% of users shopping online.
According to the results of the study the Spanish spend around 452 euros online, the French 509 euros and the Italians 454 euros. The study also showed that on average the Spanish buy around 5 different products online whereas the French buy 8 and the Italians 7.

The most popular products bought online were tickets for travelling (83% searches resulting in 55% purchases), followed by package holidays (77% searches resulting in 36% purchases) and music downloads (62% searches and 25% resulting in purchases).
The purchase of concert and festival tickets online was shown to have risen from 56% in 2005 to over 63% in 2006 and the legal downloading of music accounted for 37% of online purchases.

According to the study the purchase of mobile telephones has gone up by 23% followed by a 16% increase in music downloads. The purchase of car accessories increased by 15% and furniture sales by 14%.

The most noticeable increase was in concert and festival tickets with an increase of 75% bought online. The purchase of holidays rose by 72%, books by 71% and clothes by 70%.

The studied was based on telephone interviews in the United Kingdom Germany, France, Spain, Italy, the Nordic countries, Belgium and Holland.

Online shops in Spain
Shopping in Spain

Earnings of immigrant workers in Spain

Funds transferred abroad by immigrants reached record high in 2006

Funds transferred abroad by immigrants in Spain broke the 5,000 million euro barrier last year. Between January and October 2006 the amount grew by 34.7% with respect to the same period the previous year according to the Bank of Spain.

The total amount transferred was 5,002 million euros in 2006 and in the month of October alone 576 million euros was transferred abroad by immigrants, an increase of more than 40% compared to October 2005.

This information shows how the number of immigrants living and working in Spain has grown gradually over the last few years. Since 2002 statistics show that the amount of money transferred abroad by immigrants has increased from 2,844 million to almost 6,000 million euros recorded at the end of 2006. Given this situation, the government has announced measures to reduce bank charges for the transfer of funds abroad.

Related: Immigration in Spain

Most expensive city in Spain

According to the report on ‘Regional Economic Balance 2000 – 2005’ carried out by ‘La Fundación de las Cajas de Ahorros’ (Funcas), Barcelona was the most expensive city in Spain in 2005 while Badajoz was found to be the least expensive. On average prices for goods and services were 24% more expensive in Barcelona than in Badajoz. Gerona, La Rioja, Vizcaya, Guipúzcoa and Lérida were listed among the 10 most expensive regions while Soria, Cuenca, Cáceres, Salamanca and Ciudad Real were found to be the least expensive. The regions that consumed the most in relation to their income were Andalucía, Asturias and Galicia while Valencia, País Vasco and Navarra were found to be the regions that spent the least.

Extremadura and Castilla and León had the most public expenditure compared to Madrid, Baleares and Cataluña which had the least. Extremadura, Castilla-La Mancha and Galicia were the highest investors in training while Navarra, País Vasco and Madrid were the lowest investors.

The study carried out by Funcas also found that the rising number of immigrants settling in Spain accounted for the 14.9% growth in the Spanish population from 18 million to 21 million between 2000 and 2005. Gerona, Almería and Álava registered the most growth in each case above 60% while Zamora, Orense and Asturias, registered the least growth (below 50%) in this respect.

According to the study the number of unemployed went down by 2% which together with the number of immigrants means that the rate of employment has risen by 17%. The highest rise in employment was 19.8% in Almería compared to 3.33% in Lugo. The highest rise was seen in the Mediterranean and the North East of Spain.

Murcia, Madrid and Sevilla saw the highest economic growth registering more than the national average while Soria, Zamora and Lugo saw the lowest growth according to the study. Murcia grew by 4.26% in 2005 (the national average being 3.38%), followed by Madrid (4.10%) and Sevilla (3.94%). Cádiz (3.83%), Lérida (3.80%), Almería (3.67%), Córdoba (3.64%) and Vizcaya (3.53%) were also among the 10 other provinces which experienced the highest economic growth in contrast with Soria which had the lowest growth at just 1.16%, followed by Zamora (1.94%), Lugo (2,29%), Baleares (2,31%), Teruel (2,35%), Orense (2,36%), Álava (2,39%) and Huesca (2.46%). According to these figures Soria and Zamora were the only provinces whose economies did not grow by more than 2%.

Air Madrid crisis

Over the past two days, ever since the Spanish low cost airline Air Madrid cancelled all its operations on Friday in response to government threats to withdraw the company's licence because of repeated delays and cancelled flights, the angry scenes witnessed at several Spanish airports have turned into expressions of grief and desesperation as passengers expecting to fly home this weekend and spend Christmas with their families, have had to face up to the idea that they might have to spend their holidays alone in Spain, despite having bought their flights months ago.

Until Friday, Air Madrid operated flights to 12 destinations in Latin America, and the low prices and online booking offered by the airline drew thousands of customers from communities of Latin American immigrants living and working in Spain to send money home to their families. For many of these people, this year was going to be the first Christmas spent at home with their families for years.

Representatives from the Transport Ministry said yesterday that the government's priority was firstly to attend to passenger's needs, even though in theory Air Madrid should have found alternative transport for all of its customers, and second to consider taking legal action against the company. The airline has limited its response to publishing a communication on its website claiming that the "very serious" government threats and actions have forced it to cancel all flights and other services.

Yesterday Transport Ministry staff said they were doing all they could to help stranded passengers. The government's main problem was first to identify just how many people were are affected by the crisis, and a Ministry spokesperson said that the only information given to the Ministry by Air Madrid to facilitate the location of affected customers was a list contained in a "lamentable" database .

So far in the past 48 hours the Ministry has managed to put over 7,000 passengers on alternative flights on routes already operated by other airlines, or on flights commissioned by the government itself.

Related:
Cheap flights to Spain
Air travel to Spain

Average spending at Christmas for a Spanish family

According to the Spanish Confederation of Consumers and Users, the average Spanish family will spend 1.068 euros on Christmas this year.

Spaniards will spend the largest share of this amount - 350 - on food, 183 on meals at home and the rest on eating out. Another 300 euros will be spent on toys and other presents and as usual, families will spend on average over 100 euros (this year 144) on the Christmas national lottery.

The Federations advises consumers who want to cut costs this Christmas to avoid last minute Christmas shopping, to plan and buy for Christmas meals early on, to plan carefully before buying toys and presents and to stick to a list and a maximum expenditure plan.

Related:
The cost of Christmas in Spain
Christmas spending in Spain
Spanish Christmas lottery

Iberia lowers its fares

Iberia has announced that as from today all its international flights will be a little cheaper because of the downward trend in international oil prices.

The Spanish airline has announced a reduction of 2 euros on the fuel charge of all its medium-distance flights (to European destinations) and a reduction of 3 euros on long-haul flights to the US, Latin American countries and South Africa. According to the press release sent out by Iberia today, prices could be revised again soon depending on possible fluctuations in prices of fuel in the future.

Iberia is the latest of several European airlines to announce a reduction in fares, although some have been more generous than others. Last week Lufthansa reduced the fuel charge on long haul flights by ten euros, and Air Europa announced plans to cut fares on its European flights by between one and seven euros, and on its long haul flights by between six and fifteen euros.

Last month the Dutch airline KLM reduced fares by five euros on its intercontinental flights and one euro on European flights and Air France by one euro on domestic flights, two on European and seven on its long haul flights.

Iberia's online ticket sales on the rise

This month the Spanish airline announced that online ticket sales increased by 62 percent in the first nine months of this year with respect to the same period last year. 71 percent of all online purchases originated in Spain, representing a 55.5 percent increase compared to last year.

Related:
Cheap flights to Spain
Air travel to Spain

Deceleration in Spanish house prices

Figures released yesterday by the Housing Ministry in Spain confirmed that during the last three months the trend of a slower rise in the price of houses continued, suggesting that the sharp rise in prices experienced by the Spanish housing market over the past few years has indeed reached its peak.

According to Ministry figures, house prices rose by just 9.7 percent during the last term, the first time in five years that prices have risen by under 10 percent and 1.1 percent less with respect to the first three months of 2006.

In some areas of Spain, for example some areas of Madrid, prices have actually started to fall, although this is not true in the case of new developments in popular coastal resorts. Properties most affected by the latest trend are resales in large urban areas where new developments and off-plan purchases prove an attractive option for first-time property buyers.

Related:
Property market in Spain
Buying property in Spain
Houses for sale in Spain

Changes in state funding of Church

The Spanish government and Catholic Church agree on new funding system

The Socialist government in Spain and the Catholic Church have signed an agreement centering around the traditional system of state funding of Church activities. Up until now, the Spanish Catholic Church has had two main sources of public finance: firstly an annual allowance given to the Church by the Government, and secondly voluntary donations paid by Spaniards in their yearly tax declarations and then passed on to the Church by the Tax Office.

However according to an announcement made today by Spain's Vice President, the State will no longer have to pay an annual allowance to the Church. To compensate, the voluntary donation of taxable earnings has gone up from 0.52 percent to 0.7. This means that tax payers can pay 0.7 percent of their income tax to the Church rather than to the Tax Office. Church representatives present in the negotiations with the Government had asked for 0.8 percent.

Another change in the previously privileged position of the Catholic Church is that from now on it will have to pay VAT on the purchase of all goods and properties. It will also have to present to the Government each year a financial report detailing how the money received from the Tax Office has been spent.

The Government claims the new agreement will make the system more transparent and, according to its Vice-president, hopes that it represents the first step towards its ultimate objective: a Spanish Catholic Church capable of financing its own activities without relying on state funds. The system comes into effect at the beginning of next year.

Related:
Spanish Catholic Church in condom crisis
Spain's Catholic Church campaigns against Government
Priest celibacy in Spain
Pope receives Zapatero in the Vatican
Spain legalises gay marriage

Process open for Fórum Filatélico investors to claim compensation.

Proceedings are now open for Fórum Filatélico investors to claim compensation. Investors need to make their claims to the ‘Juzgado de lo Mercantil número 7 de Madrid’ before 2nd October. It is believed that the company had approximately 200,000 clients.

Fórum Filatélico is accused of defrauding its clients by operating a pyramid scheme in which clients invested money in the company in exchange for stamps with a guaranteed a minimum profit margin. However it is believed that the company used money from new clients to pay off the returns to previous clients. Figures for the massive fraud are believed to be around 2000 to 3,400 euros.

Clients of the company should have received letters with information and instructions on how to proceed with their claims for compensation.

Compensation for passengers affected by strike at El Prat

The government has put forward a plan in which passengers who were affected by the strike at El Prat airport on the 28th July will receive compensation.

El Prat, one of Spain's major airports, was closed unexpectedly on one of the busiest days of the holiday season. Runways were invaded by a group Iberia’s baggage handlers protesting against the possibility of subcontracting their work to other companies, something which they said could result in up to 900 Iberia staff being made redundant.

The consequences were that almost 800 flights had to be cancelled and many more were seriously delayed. It is expected that measures will be approved today and that 15 – 20 million euros will be paid out in compensation to passengers. The final costs are unknown. A bill for the total costs of compensation will later be given to Iberia.

It is thought that 300 euros will be paid to passenger’s whose flights were cancelled and 100 euros to those who were delayed. It will be up to passengers to give proof. These measures have been put into place following a government meeting on 10th August in which the Minister for Industry, Magdalena Álvarez, made a commitment to help those affected. It was also agreed that proceedings would be taken against Iberia for breach of air traffic security.

So far over 20,000 claims for compensation have already been made although this figure is expected to rise significantly.

Congestion charges in Spanish cities

The government is considering introducing congestion charges for cars circulating in Spanish cities. The idea will be debated in PSOE's annual political conference due to take place between 15th - 17th September. The congestion charges would work in a similar way to those already in place in other European cities like London and Rome. In large German cities like Frankfurt and Cologne motorists will be charged as from 1st January.

Although PSOE admit that introducing charges is a controversial proposal it would only be under certain conditions. Each city would have the right to decide whether to introduce the charge and be able to adapt it accordingly to suit their interests.

However, it is unlikley that the idea will be approved at the conference given that PSOE has worked towards reducing car tolls on motorways for example in Galicia and Andalucía due to their unpopularity.

Some of the reasons behind the idea of introducing congestion charges are protecting historic buildings, improving public transport and improving the environment in city centres for its inhabitants. A similar idea was put forward by the Ministry for the Environment in 2004.

Other ways of improving the city centre and reducing traffic would be to introduce more bus lanes, introduce lanes for cars carrying more than one passenger, prohibit loading and unloading during the rush hour, create more cycle lanes and pedestrianised streets and introduce more environmetnally friendly public transport.

Related:
Driving in Spain
Roads in Spain
New penalty points driving license system in Spain
Driving from Spain to England
Driving offences in Spain
Drink driving in Spain

Easyjet to set up new base in Barajas

Easyjet, the British low cost airline company, has announced that it is to invest 100 million euros in setting up a new European base in Barajas, Madrid which will start operating in February 2007 making it the airlines 17th operative base in Europe. More details will be made public later next month.

Andy Harrison, Easyjet’s spokesperson justified Spain as first choice saying that Spain offered 'excellent opportunities for growth given that air travel was still dominated by traditional carriers'.

Easyjet has been operating since 1998 and is the fourth largest operator after Iberia, Spanair and AirEuropa. In 2005 it carried 900,000 passenger, double the figure for the previous year.

At present Easyjet operates from 12 Spanish airports: Barajas, Barcelona, Asturias, Bilbao, Valencia, Murcia, Almería, Málaga, Palma de Mallorca, Menorca and Ibiza.

Ex-President of Fórum Filatélico Released on Bail

Francisco Briones the Ex-President of Fórum Filatélico was released from prison yesterday after paying 1 million euros in bail. Under his bail conditions he must report to the police every three days, his passport has been confiscated and he is forbidden to leave the country.

According to sources representing Briones clients and former employees have voluntarily contributed 300,000 euros to his defence fund.

Briones is the last of the four Fórum Filatélico executives to be released under bail. He was detained in May following accusations that the investment company had been defrauding its clients by operating a pyramid scheme.

Telefonica broadband users advised to claim compensation

The Ministry for Commerce and Industry has today advised those affected by last Tuesday's broadband connection problems with Telefonica to claim compensation.

From the early hours of Tuesday morning thousands of Telefonica's broadband clients throughout Spain were left without connection. At first Telefonica blamed the problems on software failures but then later on attributed them to a massive electrical storm in Barcelona.

The National Consumers Association (FACUA) has requested that the government open an investigaton into the incident. It has also requested that all broadband clients who were affected receive automatic compensation. FACUA has also complained that Telefonica did not make the problems public until the media demanded clarification.

Ya.com and Wanadoo users were also affected given that these companies rely on Telefonica in order to provide their broadband services.

Madrid most expensive place to buy a property

According to the latest economic study by one of Spain’s leading banks, the Caixa Catalunya, buying a new flat in Madrid would cost over 40% of household income. This comes at a time when 60% of families can’t even afford mortgages totalling 40% of their income.

Madrid is the most expensive place to buy a property in Spain followed by the Basque Country in second place and the Balearic Islands in third place.

In Catalonia it is estimated that families need to dedicate around 30% of their net household income to paying their mortgage, a similar figure in Asturias and Valencia.

Other places in Spain where buying a property requires less than 30% of total net income are Extremadura Galicia, Castilla-La Mancha, Castilla-León, Murcia, Navarra, La Rioja, Aragón, Cantabria and the Canary Islands.

A relatively strong economy, low interest rates and demand outstripping supply are just some of the explanations for the recent property price boom. However this has led to a situation where property prices have risen disproportionately in relation to average salary levels over the past few years. The reality of this situation means that a high percentage of households throughout the country have no chance of getting onto the property ladder.

Interest rates in Spain

The Euribor rose to 3.54% in July which means that overall interest rates have risen 1.37% in the space of a year.

It is predicted that mortgage rates will continue to increase given that the Euribor, on which mortgage rates are fixed, has seen its 10th consecutive rise and has reached its highest level since July 2002. It was just 2.168% at its lowest in July 2005.

The rise means that the average 20 year mortgage in Spain of 140.000 euros, which is due for its annual revision will increase 100 euros per month which works out at an extra 1200 euros a year. This increase is calculated on the basis of the Euribor base rate plus the percentage added by the bank. This is a worrying trend for mortgage holders given that property prices are already at an all time high.

For first time buyers the situation is even more serious as prices continue to go up, albeit at a slower rate that the past couple of years, making affordability less and less likely for this group of buyers. Madrid, Barcelona, San Sebastian and Bilbao continue to be the most expensive cities in Spain although prices on the Mediterranean have also shot up in recent years.

Protests over the price of housing in Spain

Thousands of young people took to the streets yesterday in 60 towns and cities to protest at the price of housing in Spain and to ask the Spanish government to do something to protect the right of young people to buy a decent house.

The protests were organised spontaneously via e-mail messages, websites and sms and were not coordinated by any youth organisation, trade union or any other protest group. The biggest protests were held in Madrid and Barcelona where more than one thousand protesters gathered at the Puerta del Sol and Plaza de Catalunya respectively, and in Valencia (900 protesters). In other towns like Sevilla, Granada, Cordoba, Bilbao and San Sebastian, the concentrations were smaller with 200 to 150 participants.

During the protests, the participants sat down and chanted slogans criticising national and local government for failing to guarantee the right to a house by allowing property prices to rise above what many people can afford. They also criticised real estate speculation with chants like "Hands up, this is a hold up" or "Protect our right to a roof. Housing isn't a business. It's a right".

Spanish Santander Bank announces new profits

According to a statement made by Spain's Comisión Nacional del Mercado de Valores (CNMV), the position of leading Spanish bank Santander grows in strength as the bank enjoyed increased profits during the first quarter of this year. Net income during the said period rose by 26 percent to 1,493 million euros.

This rise in profit is partly thanks to the performance of Abbey, acquired by Santander in 2004 as revenue from the British bank rose by a massive 76 percent to 244 million euros largely caused by the cost-cutting policies carried out last year.

The Santander Bank has also had a very successful term in its operations in Latin America, where profits grew by 47 percent to 618 million euros. The Santander Bank has acquisitions in Latin America worth over $16 billion dollars, and the bank's shareholders will be delighted with the performance of its banks there which comes just when the rise in interest rates in Spain caused by the rise in Euriber is likely to slow lending growth at Spanish banks.

Net interest income increased 23 percent to 2.89 billion euros from 2.36 billion euros and fee income rose 24 percent to 1.75 billion euros.

Property for sale or rent in Spain

Euroresidentes has, over the past few years, slowly but surely become one of Spain's largest webs, with more than 12 million visits each month. Euroresidentes began as a website specifically designed to answer the questions and needs of Europeans and expats looking for information about different aspects of living in Spain: travelling, holidaying, shopping, learning about the culture or buying a house in Spain. Infact, one of our most popular sections, in Spanish, English, French and German, is Property in Spain.

Over the past year or so we have signed agreements with various institutions, law companies and banks aimed at creating special products and standards of service for non-resident property-buyers in Spain, including agreements with Caja Madrid and Bankinter. Since Euroresidentes was launched six years ago, we have answered thousands of queries from people looking to buy their dream home in Spain, and in need of specialised advice, a bit of encouragement, or a word of warning as each case may be. And as the number of people abroad looking for property in Spain continues to grow, and with it the demand for information, our policy is to remain objective in the advice we offer to our users.

In response to the growing demand for people looking to buy property in Spain, we have collaborated in the design of a new resource for visitors looking for property for sale or property for rent in Spain called Tutipi ( http://www.tutipi.com ). We have always been unwilling to recommend the services of one estate agency or promotor or another, despite requests to do so from potential buyers or property developers themselves. While we have passed on testimonies of satisfied customers to users asking us our opinion about one developer or another, we do not endorse the services of any particular company or agency.

But as the requests from users looking for property in Spain and asking advice increase each year, we have decided to go one step further and created a site which is completely free, both for people advertising property, and buyers looking for property in Spain. This way we hope to connect supply with demand within the democratic framework offered by Internet.

Tutipi enables property sellers to publish plans and photos and will eventually replace our other more basic Spain Property for Sale and Spain Property for Rent noticeboards altogether. The service is free for everybody. As always any comments from our users, sellers, buyers or just helpful visitors, are more than welcome. And as the list grows and users find (hopefully) a bargain opportunity just in the area they wanted, our usual advice mot to rush into a purchase but to get proper legal advice before parting with any deposits obviously applies.

Wages in Spain

According to a report published yesterday by the Inland Revenue Office in Spain about the Spanish labor market and pensions, men earn salaries which are on average 30 percent higher than those of women. The average annual salary of men in 2004 was 17,964 euros, compared to 12,464 for women - a difference of 5,500 euros per year. If you multiply this amount by 40 (years in an average working life) the total difference adds up to almost a quarter of a million euros. Which is a very big gap indeed.

The study puts the difference down to the fact that the relatively recent incorporation of women into the labor market in Spain on a large scale means that they earn less because they have been employed for fewer years, and that their jobs tend to be more at risk than in the case of male employees. Furthermore, mothers tend to put their children's interests before their own professional development, and the percentage of women working part time in Spain is higher than in any other European Union member state. The report also highlights the lack of equal opportunities for women compared to men as far as professional promotion is concerned.

Statistics show that 58 percent of workers between 18 and 45 years old are men, and 42 percent women, whereas for workers between 45 and 65, the difference is much higher (over 20 percent).

Not surprisingly the report puts wages in Madrid at the top end of the scale, followed by Ceuta, Melilla and Catalonia (in that order). Jobs in the Energy and Water and Banking industries boast the highest average wages (31,846 and 28,911 euros respectively) whereas the Tourism (8,680 euros) and Trade (11,360 euros) industries offer the lowest average wages.

Related:
Unemployment in Spain at all-time low

The cost of Christmas in Spain

According to the results of a study carried out by the Independent Federation of Users and Consumers, Christmas spending in Spain this year is expected to by just above average spending last year.

Spanish consumers are expected to spend an average of 833 euros on their Christmas this year. Of this, an average of 244 euros (30 percent) will be spent on presents and toys, 233 euros on leisure and entertainment away from the home, 227 euros on food and drink and a mind-boggling average of 129 euros per person on the Christmas lottery.

According to the study, people living in Madrid spend most on Christmas (an average of 941 euros per person), followed by Catalonia (905 euros), Valencia (901 euros) and the Basque Country (860 euros). At the other end of the scale, people in the Canary Islands spend least during the Christmas season (on average 777 euros per person). People in Valencia spend more money on Christmas lottery than elsewhere in Spain (on average 152 euros per person), whereas people in Madrid spend more on presents and going out (which is not surprising given the price of food and drink in many restaurants in Madrid).

Related:
Spanish Christmas recipes
Christmas spending in Spain

Online shops in Spain

According to a report released yesterday by WatchMouse, a Dutch consulting company, only a few Spanish online shops are ready for the pre-Christmas rush of online shopping. Most of them take ages to load, often users lose the connection inexplicably and in general the quality of online services is low.

Watchmouse has published its result after a detailed analysis of 10 online shops carried out over the past 38 days. The report concludes that during this period, performance of 9 out of 10 online shops was below required standards.

Out of all the 10 sites analyzed, only Carrefour offered 99.9% availability, which is considered to be the minimum standard. The online services of Spanish supermarket Mercadona and computer store AreaPC were the worst. The study was carried out by entering the homepage of each online shop every five minutes between 25th October and 2nd December and checking that it downloaded in 8 minutes or less without error.

Despite increased public investment in the e-commerce sector in Spain in recent years, this government and the last have ultimately failed to substantially boost use of the Internet in this country. Despite growing optimism in the sector last year, Spain continues to languish at the rear end of all EU rankings related to e-commerce and Internet usage among member states. According to a recent survey in El País, over 63 percent of Spaniards still don't use Internet. And most sectors are struggling to put together an efficient online service.

Even though most supermarkets offer online shopping, airlines and other transport services offer online booking and most Spanish banks offer electronic banking, the vast majority of Spaniards still tend to do the weekly shop at the supermarket, book their holidays at the local travel agent, and visit their bank to do transactions. Judging by the results of the recent WatchMouse survey, retailers in Spain still have a long way to go if they are to pursuade an Internet-reticent population to embrace online services.

Related:
A list of where to shop online in Spain
Ecommerce in Spain