The European Court of Justice’s recent ruling on the conformity of Spanish legislation with regard to compensation for temporary workers whose contracts are terminated is a serious setback for the country’s trade unions. The number of workers who may be affected by the European Court of Justice’s ruling is very high. It could have an impact on the almost 4 million temporary contract workers in the country, of which 300,000 are interim staff in Spain’s administration.
Articles by Carlos Díaz Guell
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If a slowdown started in the Spanish economy for 2017, this would find Spain’s private companies in a healthy situation with regard to their debt: at end-2015, this was below the eurozone average (106.4% of GDP).
The hypothesis that London may cease to be the financial capital of the European Union has mobilised other capital cities in the region. Madrid is amongst the capitals which have begun to be put forward as a candidate, but its current political situation, including having a caretaker government for over 300 days, could ruin its chances.
The Ferrovial group is a world leader in private transport infrastructure development, not just in terms of the number of projects but also in terms of investment volumes. But with overseas investments of 72 billion euros, and a success story worthy of praise, it has had a setback in the US. This means, in practice, that the Spanish company will have to abandon the SH130 toll highway project (Trans-Texas corridor).
The PP and Ciudadanos reached an agreement to incorporate a “guaranteed wage supplement” in the package of measures which allowed Albert Rivera’s party to support Rajoy’s bid for a second term in office. (This measure would mean an increase in spending of more than 7.5 bilion euros over the next legislature). Meanwhile, Pablo Iglesias continues to fight for a rise in the minimum wage to 950 euros a month in 2020 – currently it stands at 655,20 euros.
Caretaker Prime Minister Mariano Rajoy is stubbornly holding on to his target-promise that Spain can create 20 million jobs by 2020 if the current economic policy is maintained. But the reality of the Spanish economy is just as obstinately demonstrating that there are very considerable holes.
A recent European Commission report on innovation indicators highlights that Spain is the third country, along with Lithuania, which has fallen behind the most in matters of innovation – after Romania and Hungary. Since the start of the crisis in 2008, Spain has lost an average of 0.8% annually in R&D output.
The banks’ non-performing loans ratio continues to show signs of recovery amid the ongoing deleveraging process on the part of households and companies. The balance of impaired loans fell by 18.3% in May to 121,865 billion euros. Against this backdrop, Banco Sabadell and Bankia were the first banks to present their first half results’ report. And the Spanish stock market reacted in a completely different way to each report.
Spain’s GDP growth rate in the first half of this year has been solid. In the second quarter, GDP expanded 0.7% quarter-on-quarter nearly in line with the 0.8% rise in the first quarter, translating into a 3.2% year-on-year increase. So overall, the balance for the first half of 2016 has been favourable. And the strong performance over this period means that it is very likely GDP growth will be close to 3% for the full-year. But there are downward risks for 2017.
Telefonica has presented on Thursday its first half results. These have highlighted the new contribution from its O2 UK subsidiary, which returns to the multinational’s permiter after five quarters on the outside. Revenues in the UK during H1’16 reached 3,464 million euros against 25,235 in the consolidated group. Meanwhile, Telefonica’s frustrated attempt to sell its UK unit O2 to Hutchison is beginning to have consequences.