Spain had its first coronavirus death on February 13th, in Valencia. But the Spanish Ministry of Health did not know about it, or did not make it public – and we do not know what is worse – until three weeks later, March 3. This first data reflects well how this pandemic is being managed in Spain.
The current scenario forces stimuli and, at last, the Eurogroup is beginning to propose some important measures such as the agreement to promote fiscal measures throughout the Eurozone worth 1% of GDP in 2020, or guarantee schemes and tax deferral equivalent to 10% of GDP. Furthermore, Spain’s Prime Minister, Pedro Sanchez, announced a much more ambitious plan, mobilising up to 200 Bn euros, of which 83 Bn euros will be private, mainly from banks. The shock plan is equivalent to 20% of the national wealth (11.7% taking into account the State’s share).
State of emergency, general quarantine, these measures, which should have been taken in Madrid a week ago, are now imposed on Spain to avoid repeating mistakes. Sánchez at the controls has finally got it right. It will not be easy. “Heroism is also about washing your hands,” don’t forget. Courage!
Joan Tapia (Barcelona) | We don’t really know where we stand with regard to this crisis, but it’s clear what we should do. The EU must act decisively to avoid an economic disaster that would affect all its members. Only God knows what will come next.
The International Monetary Fund forecast that Spain’s economy will deepen its expected slowdown in 2020, with growth of less than the 1.6% estimated in January. This is due to the impact of the coronavirus outbreak, and especially to the drop in tourism demand. “Clearly the economy is already affected, the extent of this impact depends on the duration of the outbreak,” Andrea Schaechter, the IMF’s chief of mission, explained in a conference call.
The sale of non-performing loans (NPLs) in Spain totalled € 22 billion in 2019, 63% lower than the 60 billion registered the previous year, according to data from Prime Yield’s ‘Keep an Eye on the NPL & REO Markets’ report.
Bankia Studies | The Spanish economy has created more jobs than expected, allowing the unemployment rate to stabilise at record lows. The indicators suggest that the Covid-19 crisis had not yet infected the dynamism of the labour market. That said, the possible impact could be reflected in the coming months.
The average replacement rate in Spain -which is defined as the average pension divided by the economy’s average salary – is 57.7%. This is the third highest in the Euro Zone, 13.6 points over the Euro Zone’s average and 7.2 and 15.7 points higher than that in France and Germany, respectively. Funcas’ experts agree that the replacement rate, one of the highest in Europe, will need to be reduced.
The Mortgage Loan Reference Index (IRPH) represents approximately 10% of the loans granted in Spain and is the most used for Spanish mortgages after the Euribor, used in 90% of contracts. The Court of Justice of the European Union (CJEU) has left it to Spanish judges to analyze, on a case-by-case basis, whether the banks commercialized their mortgages referenced to IRPH in a transparent manner. They will be able to cancel them if it is found they have been abusive.
Alphavalue | BlackRock has increased its participation to 3.726% in the Spanish market manager in the middle of a takeover bid by the Swiss operator SixGroup. Is BlackRock expecting a counter-coup movement from Euronext?