A.J.A. | It is a common misunderstanding, typical of young people, to think that the greatness of democracy lies in the fact that we can choose who governs us. No. Its greatness lies in the fact that it gives us the chance to boot out the incompetent Government that has governed us for the last four years. Be it a PP Government, be it a PSOE Government. That’s what people in Venezuela, Cuba, or in China can’t do.
Bankia Estudios | One of the Spanish economy’s strengths with which to face the devastating crisis unleashed by Covid-19, compared to the previous financial crisis of 2008-13, is the private sector’s healthier starting position. In this respect, families and companies’ consolidated debt stood at 129.7% of GDP at end-2019, the lowest figure in 16 years and 63.5 percentage points below the 2007 level. Corporate debt also falls to a low of 16 years in GDP terms (72.8% vs the previous 75.1%).
The yearly rate of inflation dropped by seven-tenths of a percentage point in March to 0%, after a monthly decline of 0.4%. The result was very close to expectations, and was mainly thanks to the fall in energy products due to the oil price collapse. The main deviation occurred in unprocessed foods’ prices which were inflated due to the increase in fresh fish, vegetables and pulses.
On Thursday, the Treasury raised €6.535,6 billion in a new auction of long-term bonds, exceeding the €6.5 billion top of the range. Total demand was EUR 12.407,77 million, which is 1.9 times the amount finally awarded. However, costs have risen once again and even doubled the yield on the bonds.
Inditex has decided to postpone its temporary layoffs’ plan, which was expected to start on 15 April. For the time being, it will continue paying the salaries of its workers in Spain. After the state of alarm was decreed on 14 March and just after presenting its results, Inditex already flagged that it was going to cover the cost of all its staff in Spain. At the same time, it conditioned the temporary layoffs for its 25,000 store employees to the extension of the decree beyond 15 April, a measure which is now ruled out.
In the face of the economic slowdown due to the restrictive measures in place to stop the spread of Covid-19, Spanish companies laid off or terminated contracts for over 302,365 workers in March, which is more than 50% higher than the negative milestone of January 2009 (at the start of the last economic crisis) when there were almost 199,000 unemployed.This brought the total number of unemployed to 3.548.312. Finally, Spain’s labour market have lost 833,979 members up to March 31.
The Ministry of Economic Affairs and Digital Transformation has informed the European Commission that it has decided to postpone the date for the release of the 700 MHz band, a process known as the Second Digital Dividend. This was scheduled to be completed by end-June, along with the auction of that spectrum amongst operators for the deployment of 5G. The postponement is due to the exceptional situation resulting from the Covid-19 pandemic.
A.J.A | Last Friday 27, after a cabinet meeting, the Spanish government issued a decree prohibiting companies from firing employees by “taking advantage of the coronavirus” (sic). with absurdities such as this one, it ensures that the recovery will not be in a V shape, or even in a U shape, but that the country will get into a prolonged crisis in L.
Half of the line of guarantees’ first tranche, amounting to 20 billion euros, will be earmarked for SMEs and the self-employed, guaranteeing 80% of new loans and financing renewals. The remainder will go to medium and large companies. In the latter’s case, up to 70% of new loans will be guaranteed, while loans’ renewals will be guaranteed up to 60%. Once the resources are used up, the government will automatically activate new tranches of credit lines up to the maximum target of 100 billion euros.
The coronavirus crisis could cost Spain 3.9% of GDP, in a mild scenario. But if the current containment and crisis measures are extended for three months, GDP could fall by up to 6 percentage points. And if they continue until summer, by almost 10. This is one of the conclusions of the report presented yesterday by Nuno Fernandes, Professor of Finance at IESE Business School.