In Spain

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Special Labour Reform | The US, UK media (almost) muted response

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…


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Special Labour Reform | Low-cost dismissal and new single contract

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…


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A dozen entities-sized Spanish banking system

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…


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When it comes to reforms, Spain’s labour market is a must

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…


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World’s heaviest personal taxes: in Catalonia and Asturias

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…


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Does anyone know how to get rid of the €24bn electrical bill deficit in Spain?

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…


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Hire an intern, Mr Murdoch

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…


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Are caps on pay for rescued banks in Spain fair enough?

By Juan Pedro Marín Arrese, in Madrid | It is only fair that banks being nationalised to save them from sheer collapse should follow a much restrictive pay policy on top executives and members of the board. After all, a huge amount of taxpayer money has been spent to fill the gaps derived from irresponsible management. The odd thing is that most culprits have already left the entities with their pockets…


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Forcing mergers is the real aim of Spain’s financial reform

By Juan Pedro Marín Arrese, in Madrid | The outline of the financial reform, announced yesterday on Thursday by the Spanish minister of Economy, fails to provide the clue of what the government is aiming at. To begin with, the picture we were presented was one of sheer disarray: big holes in the balance sheets covered with meagre provisions and not a single tender word for the financial system. One…


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Spain keeps on reducing the price on its debt

MADRID | Since December, the Spanish Treasury has had a series of successive successes in its debt offers, even exceeding their expectations in many of them. On Thursday, it happened again. The agency under the ministry of Economy and Competitiveness placed €4,560 million in bonds, the maximum planned, at more moderate rates than on the previous occasion according to data released by the Bank of Spain. Specifically, the Treasury placed…