As we have already said there are moments when the economic and political cycles don’t go hand in hand. Yesterday, the investiture of caretaker Prime Minister Mariano Rajoy got underway, with very slight possibilities of his being able to win enough votes to return to office with a majority. But the Ibex 35 blue chip index didn’t even move: in fact it posted a nearly 1% gain.
The Spanish right and centre parties have brokered an agreement for breaking the current political deadlock. The caretaker Cabinet has held office for nine agonizing months as two general elections failed to produce an outright winner. Even if the settlement reached between the caretaker Popular Party government and Ciudadanos marks a sizeable step forward, it will still fail to deliver enough parliamentary support for securing a stable government. The Socialist Party continue to firmly hold the key to power.
Spain’s caretaker Prime Minister Mariano Rajoy will this afternoon make his investiture speech to parliament, ahead of a key vote on Wednesday to secure support for his conservative Popular Party to form a new government. The PP have already brokered an agreement for breaking the current political deadlock with centre-right party Ciudadanos, led by Catalonian lawyer Alber Rivera. As a result, Rajoy can probably rely on the support of 170 MPs. But he needs 176 votes (out of a total of 350) if the PP is to win an absolute majority.
Judging by the incessant comments these days from all kinds of financial experts and even independent voices, one of the best solutions for Spaniards in the face of the country’s serious pension system crisis is to sign up to a private pension plan. In reality, no-one has any doubt that the public pensions system will not be able to meet its commitment to providing a decent pension for future retirees, in line with their expectations. That said, are private pension plans the solution?
BBVA Research | For 2017, the economic cycle is expected to continue correcting the deterioration in Spain’s public accounts, but in a scenario without changes in fiscal policy, the shortfall would decline only to 3.6% of GDP, and would exceed the budgetary target set at 3.1%. Further adjustments will be required to ensure a durable correction.
Mari Pinardo | Do you remember the summer of 2012, when Spain’s risk premium reached a record high of no less than 638 basis points? Four summers later, this spread seems like it belongs to a completely different country. Since that fateful summer, Spain’s sovereign risk has declined nearly 550 bp and just last week broke the 100 bp threshold. There are basically three reasons which have pushed the risk premium through the 100 bp threshold: a date for Spain’s caretaker Prime Minister Mariano Rajoy’s investiture, the economic policies which have been in place in the Eurozone since April 2015 and the fact that it looks less likely the Fed will raise interest rates in September.
F. Barciela / F.G. Ljubetic |The news that a UK bank and a German lender are going to start charging clients for their deposits has raised the question of whether Spanish banks are thinking of doing the same. For the time being this deposits’ charge will generally apply to very specific segments of client business. The continued decline in margins at the Spanish banks is worrying; a consequence of the fact that interest rates on loans are increasingly lower while the remuneration costs on liabilities are maintained. In the end, the Spanish banks may not have any option but to bite the bullet…and charge for deposits.
Spain’s trade deficit in the first half to June 2016 dropped 31.4% to 7.878 billion euros from a year earlier, driven down by record exports, according to data published on Friday by the Economy Ministry.
José Luis M. Campuzano (Spanish Banking Association) | Spanish lenders’ bad loans fell 18.2% to 118.159 billion euros in June from a year earlier, registering their lowest level since 2010, according to the Bank of Spain.
No day goes by without us being told how wonderful this year’s tourism campaign is going to be, in terms of the millions of visitors and the billions of euros it will generate. The tourism campaign is focused on the third quarter, when everyone and their aunt is getting sunburnt. There are many more jobs, workers are needed, and this is reflected in the increase in the number of hours worked, normal and extra.