The arrest of the former head of Spain’s employers’ association should come as a shock. Sadly, it is more likely to be interpreted by the international community as yet another indication of the many deep-rooted and extensive problems that afflict this country, the most important of which is a lack of transparency in politics and business, along with a failure to implement corporate governance practices. Anybody with a passing interest in the business dealings of Gerardo Díaz Ferrán will not be surprised to learn that on top of all the other charges he faces, he has now been accused of fraudulent conveyance and money laundering relating to the sale of the Viajes Marsans travel group in … [Read more...] about Businessman’s arrest highlights Spanish corporate failings
Business
To be or not to be: Catalonia as an independent state
There’s nothing especially new about the present dispute between Catalonia and Spain’s national political leadership. Arguably most of the key arguments date back at least to the 1970s and the end of the Franco era, while the seeds of the present dispute are to be found in the country’s written constitution which was finally put together in 1978, when the threat of military interference in political life was still a real and present danger. Indeed the one thing that both sides of the argument seem to agree on is that the regional system of comunidades autónomas which was established back then doesn’t really work. Equally, after so many years of constant wrangling, most citizens on both … [Read more...] about To be or not to be: Catalonia as an independent state
Juan Luis Cebrián: last man standing?
In November 2010, Juan Luis Cebrián, the founding editor of El País, and CEO of the Prisa Group, the media empire to which the newspaper belongs, announced the sale of 70 percent of Prisa for €900 million to a New York-based investment group The reason for the sale was a €4.7-billion debt he had created after an expensive foray into pay-TV was followed by the financial crisis and a downturn in advertising. At the time of the sale, Prisa’s debt was more than 12 times its withered stock market value. The sale spelled the end of Cebrián and the Polanco family’s control of Spain’s leading media group, which had been founded on the success of El País over more than three decades. "Better 30 … [Read more...] about Juan Luis Cebrián: last man standing?
A slice of Vegas in Spain stirs controversy
It sounds like the answer to the prayers of the Spanish government. A multi-billion-dollar gambling complex led by an American tycoon who promises to bring the glamour of California to Spain and kick-start the country’s struggling economy by creating a quarter of a million jobs. But EuroVegas, as it’s known, is also a scheme that has sparked fears about spiralling crime, prostitution and environmental violations and which has highlighted the age-old tensions between Spain’s two main cities. American casino magnate Sheldon Adelson, with an estimated $25-billion fortune, plans to build a European gambling hub that will include six casinos and 12 hotels. His Las Vegas Sands company says … [Read more...] about A slice of Vegas in Spain stirs controversy
Bankia: A tale of confusion, conflict and unnecessary haggling
Measured from the close of May 7 - the day Bankia’s president Rodrigo Rato announced his resignation - through noon of Thursday the 18, when its shares hit a low of €1.17, Bankia shed no less than 48 percent of its value. Adding to this the 40 percent lost since the July 2011 initial public offering through early May (this perfectly in line with the average euro zone bank over the period, by the way) and the hoards of retail depositors cajoled into parting with their savings in order to subscribe to the IPO by their local bank managers, we’re looking at just shy of a 70-point loss in a bit over eight months. It wasn’t intended to turn out that way. When Banco Financiero y de Ahorros (BFA) … [Read more...] about Bankia: A tale of confusion, conflict and unnecessary haggling
Spain’s “technically impossible” euro exit
Spanish Prime Minister Mariano Rajoy, his Economy Minister Luis de Guindos, and Finance Minister Cristóbal Montoro, have all been asked to respond to Nobel laureate Paul Krugman’s recent comments regarding what he called eurodämmerung: the end of the single currency. Unsurprisingly, they all repeated their commitment to the single currency, saying that Spain would not require a bailout, and that the spending cuts would continue. But like guilty men giving away what is really on their minds, all three went further, insisting that Spain would remain in the eurozone, and that a corralito was a “technical impossibility.” Corralito is a dreaded word in Spain, associated with the chaos that … [Read more...] about Spain’s “technically impossible” euro exit
Spanish wine bucks recession
In times of recession, it is always surprising to find businesses that have survived – indeed thrived – against the odds. The steady closure of smaller stores has left many Spanish town centres struggling to remain vibrant and in such a climate, niche is everything if you are hoping to capture the market. The main street of the Basque capital Vitoria's old quarter throws up one such case: Martin's Bodega is 15 square metres of wall-to-wall wine. English owner Martin Beacham opened the shop in 2009 just as the recession was beginning to hit. At such a delicate time, it was a straightforward matter of sink or swim. Three years later, business is steadily thriving, though most clients are … [Read more...] about Spanish wine bucks recession
Energy debt burden looms large in Spain’s deficit reduction push
To say that the Rajoy government inherited a rough legacy is rather an understatement. The economy appears to be in even worse shape than the incoming Partido Popular government first thought and even as they chop away at public spending, confidence at home and abroad continues to slip. Less than three months in and Rajoy and his party were forced to restructure deficit reduction goals, much to the chagrin of austerity-minded allies in Brussels and Berlin. Unfortunately, the government’s campaign to rein in spending and reduce the deficit does not yet address one particularly large elephant in the room – namely, Spain’s beleaguered energy sector. Sure, we’ve seen the Rajoy government … [Read more...] about Energy debt burden looms large in Spain’s deficit reduction push
The Spanish economy’s sustainability dilemma
"Environmental sustainability cannot be understood today without taking into account the economic factor. Only when environmental policy is economically viable can it be sustainable over time. Economic viability and environmental sustainability will be, therefore, the two aims of the policy that this ministry will pursue.” This sentiment, voiced by Environment and Agriculture Minister Miguel Arias Cañete recently, sounds sensible enough. But the full content of his speech, addressed to a congressional committee and outlining his intentions for this legislature, has stirred some deep fears among environmentalists. It has also brought the sustainability-versus-growth debate into the … [Read more...] about The Spanish economy’s sustainability dilemma
Rajoy, reform and the burden of employment expectations
As thousands took to the streets at the weekend, it quickly became clear that the Partido Popular’s approach to job creation had more than a few critics. Focusing their anger on reforms passed on February 9, critics called out the new government’s efforts to reduce mandatory severance pay from 45 to 33 days per year worked and allowing what they felt was an unfair freedom for companies to opt out of collective bargaining agreements and adjust wages and hours according to their financial standing. The Rajoy government insisted that it “wants to give firms the ability to modify workers' hours in response to demand rather than simply laying them off, bringing an end to the rapid rise in … [Read more...] about Rajoy, reform and the burden of employment expectations