The European Court of Justice advocate general made public on Wednesday a detailed opinion from an advisers group on so-called floor clauses in Spanish mortgage contracts. This recommendation suggests the court should apply retroactively a “temporal limit” on the amounts banks will have to reimburse borrowers. Floor clauses were already declared unfair by Spanish Supreme Court in 2013 May.
While Spain’s private shipyards are doing really well, the state-owned shipyards are not capable of recovering the levels of competitiveness which would pull them out of losses and allow them to compete in the international markets. One relevant example of this was their inability to take on the job of building the lock-gates for the Panal Canal extension.
In the next quarter and the following one, we will obviously see an uptick in growth because of the tourist season. But after that, we will see a more marked slowdown, for a variety of reasons, with the first one being the impact of Brexit. But if this is going to lead to recession, I don’t know. I don’t have a crystal ball, but I don’t rule it out.
According to forecasts from The Organisation for Economic Co-operation and Development (OECD), Spain’s labour market will be amongst the top performers in the “Club of the rich countries,” registering the biggest advance in terms of employment in 2016 and overcoming the negative trend seen during the crisis. The international institution warns that a new recession could take Spain by surprise without having recovered all the jobs lost in the crisis.
The number of unemployed people registered with Spain’s Employment Office fell by 124,349 in June from May to 3.767.054. The decline in relative terms was 3.2% and is the second largest in historical series, only beaten by the fall recorded in June 2013.
Spain still has not a one 1 billion dollars tech company but the financing of high-growth, high-potential and mostly early stage firms shows a persistent positive evolution in Spain as shown by the report Startup Financing in Spain in 2015 published by Webcapitalriesgo.com.
Today, the economic situation in Venezuela has greatly changed for the worse, but those who had money have held on to it and now Spain has become the destination for this private capital. The investments are usually focused on buying top quality housing, mainly in Madrid, or on acquiring stakes in a select group of businesses with reasonable returns.
Eight years after the real estate bubble officially burst, all the existing indicators point to the sector’s crisis being over, although there are still some loose ends and some kind of legacy, such as the banking sector’s non-performing loans. But the data shows we can definitively put behind us an enormous problem which was a threat for the economic system for too long.
It’s embarrassing that the PSOE is saying the labour reform has been negative and that the PP is promising to lower taxes when Spain has to negotiate new spending cuts with Brussels.
If we accept that the evolution of debt is a relevant factor in the explanation of the economic cycle, with the usual affirmation that the increase in debt explains the evolution in GDP, with a certain lag, then the credit cycle in Spain has been particularly intense.