By Juan Pedro Marín Arrese, in Madrid | For all the efforts to revamp a sluggish economy by bold reforms, Spain is failing to impress investors. They have the feeling that cleaning up the massive stock of repossessed property and bad loans in banking balance sheets will amount to a much higher bill than the one announced by government. Double the €50 billion figure at the very best. No wonder…
MADRID | As published on Monday by Negocio, Spanish tax inspectors believe the Tax Agency should take some urgent actions to close leaks of fiscal revenue. Bearing in mind the budgetary restrictions that the State is about to suffer, and that any legal change against fiscal fraud would require too long a process, one of their intended measures would be giving a new twist to the message that vice-president Soraya Sáenz de Santamaría…
By Juan Pedro Marín Arrese, in Madrid | The labour reform approved in Spain on Friday, opens the door for massive lay-offs. A drop in sales for three quarters in a row will trigger the possibility of firing workers with a maximum indemnity of one-year salary. It will foster switching to younger/cheaper manpower, at a relatively moderate cost. Average indemnities before would usually run at threefold that amount. Bad luck for…
NEW YORK, LONDON | If one of the intentions of the Spanish labour reform announced this Friday was to create headlines –like Mario Monti’s Salva Italia plan did– and calm the international money markets assuring that Spain was on the right track to make labour market more flexible, it miserably failed. Last Friday, when the ‘very aggressive’ labour revamp was announced, the major business networks, the ones that money makers…
MADRID | The minister of Economy Luis De Guindos had already warned that the labour reform was going to be extremely aggressive. He also commented that the reform would do away with collective labour agreements that he considered to be influenced by the Franco regime. The cabinet meeting in which new labour framework for all the Spanish workers was approved ended on Friday at about 2:30 pm. Right afterwards, the…
By Julia Pastor, in Madrid | The Spanish financial system reform is already under way, so it generates a non-stop stream of news and comments. The news on Thursday precisely come from the minister of Economy Luis de Guindos’ statements, who said during an interview to radio broadcaster Onda Cero that after the second round of mergers and acquisitions, there will be around twelve entities left in Spain. “They will…
By Juan Pedro Marín Arrese, in Madrid | Use of emergency doors being forbidden by Germany, except in cases of force majeure, trouble-ridden Southern Europe is to expect a painful and slow real adjustment. This process will allow its current competitive gap to phase out little by little. In other words, less pay for the same job. Refusal by workers to grasp the inner benefits derived from lower wages tackling imbalances inevitably…
MADRID | As reported by the daily newspaper Expansión in Tuesday’s edition, the reactivation of the property tax will be added to the increase of the personal income tax in Catalonia and in the autonomous region of Asturias creating a joint effect of more than 60%. Experts warn that these regions are susceptible to relocation and capital flight. The increase in personal income tax has placed Spain among the countries…
Julia Pastor, in Madrid | One of the fundamental structural reforms Spain needs to undertake within the next few years –and of the same importance and magnitude as the educational reform, the labour reform or the pension system–, is the one to solve the electrical tariff deficit. This is the deficit resulting from the difference between the existing elevated tariffs of the wholesale market that generates the electricity and what…
WASHINGTON | What a coincidence. In an election year with a Democratic incumbent, Republican think tank American Enterprise Institute (AEI) releases (on January 6) an analysis headlined “Why the real U.S. unemployment is 15.6%.” The number is right… although if we count the unemployed plus the discouraged workers, those who have abandoned the job search because they know there are no jobs to search for, plus the part-time workers who…