William Chislett | By the time General Franco died in 1975 Spain had undergone profound economic and social change, which laid the foundations for an even greater transformation over the next 40 years, but it was a long haul. The new constitution, drawn up by all the main political parties and approved in a referendum on 6 December 1978 by 88% of voters on a turnout of 67%, sealed the transition to democracy.
On next December 6, the Spanish Constitution and therefore Spain’s democracy turns 40 years old after another 40 years of dictatorship. Until that day, The Corner is going to publish a series of articles written by William Chislett, associate analyst at the Elcano Royal Institute about, precisely, how much and and how deep the country has changed in these last 4 decades. Today’s story is just the beginning.
Investment in property in Spain by institutional investors rose to 13.385 billion euros at the end of September, according to CB Richard Ellis. That figure exceeds the 12.75 billion euros in the whole of 2017. The total volume of investment for the whole year would exceed 16 billion euros, which would mean the highest level for ten years.
The deficit of Spain´s public administrations was 3.1% of GDP last year, the highest in the European Union, above the 3% registered by Portugal, and followed by Rumania (-2.9%), France (-2.7%) and Italy (-2.4%). This is according to the data published by the European Statistics Office, Eurostat, which has downgraded by two points Spain´s public debt to 98.1% of GDP.
Spain’s banking sector lost € 5.560 Bn in market capitalisation yesterday after the country’s Supreme Court decided they woud have to pay mortgages taxes and not the final client. Just 24 hours after, the Court announced they will review the decision. Morgan Stanley calculates that the effect of ruling could reach 12 billion euros.
Francisco Vidal (Intermoney) | In yoy terms, Spain did not grow at the initially targeted 3% and 2.7% during the first two quarters, but it did at 2.8% and the 2.5%, respectively. Therefore, the growth figures begin to signal a certain moderation and show the maturity of the economic cycle.
J.L.M. Campuzano (Spanish Banking Association) | The ratio of company debt in Q2 was 94.9% of GDP, and that of families 60.8%. In the case of company debt, the rate falls to 76.3% if inter-company loans are excluded. In both cases, the levels are already close to the European average.
The Spanish Ministry of Finance rules out a new specific tax hypothecated to finance pensions. In fact, the majority of developed countries has reformed their pensions systems basing them on various pillars (public/private; obligatory/voluntary) especially the nordic countries. Only Italy, Portugal, Greece and Spain maintain a pensions system based solely on obligatory social security contributions.
Fernando G. Urbaneja | The objective of a minimum wage of 1,000 euros a month (full time, 14,000 euros a month) has entered the political and social agenda at the initiative of Podemos, with lukewarm support from their socialist partners.
In relation to the fiscal deficit, the IMF has suggested to the Government of Pedro Sánchez that it calculates “realistically”the incomes it expects to collect from tax increases, to avoid a sharp increase in the deficit. The organisation has also lowered its forecast for GDP growth in Spain in 2018 from 2.8% to 2.7%. For 2019 the IMF expects GDP to grow by 2.2%, in line with its previous forecast.