In January 2009, Spain’s then Labour Minister Celestino Corbacho declared confidently that the number of jobless people in Spain would not surpass the four million mark. It took only three months for him to eat his own words as unemployment shot past that psychologically significant level. It has continued to tick upwards ever since. Corbacho lost his job in October last year. Now another minister, Elena Salgado, who holds the economy portfolio and serves as second deputy prime minister, is also putting her credibility on the line. In a press conference on Thursday, she said five-million plus job seekers is not on the cards. “In the opinion of the Economy Ministry that figure will not … [Read more...] about With almost five million out of work, Spain’s unemployment crisis rages on
spanish economy
Who cares about corruption anyway?
With the May 22 local elections looming, we now know the content of political parties’ electoral lists. El País’ assertion that over 100 of the candidates on those lists are under investigation for alleged corruption may be shocking, but it’s hardly surprising. There a several main reasons for the enormous wave of political corruption in Spain in recent years, which I explored in an article last year: the mad money generated by the real estate bubble; the country’s system of autonomous regions, where local politicians can hoard power; a laissez-faire attitude on the part of many voters, who refuse to punish their corrupt representatives; and a media that rarely indulges in profound … [Read more...] about Who cares about corruption anyway?
Spanish home prices fall faster on tax changes
The income tax filing season for the 2010 tax year, which began on April 4 and ends June 30, will be the last in which the vast majority of Spanish homeowners will be able to write off on their tax returns 15 percent of the interest and capital they pay on their mortgages up to a cap of €9,000. As of this year, only homeowners earning less than €17,000 per year will be able to benefit from the full extent of the tax break, while those earning up to €24,000 will find that the amount they can deduct has been progressively capped at much lower levels than before. Higher income earners will be able to deduct nothing. More than a third of tax payers will no longer benefit from the tax … [Read more...] about Spanish home prices fall faster on tax changes
Zapatero was damned if he did and damned if he didn’t
The Spanish prime minister’s announcement that he will not run as the Socialist candidate in the 2012 general election was, by the time he made it on April 2, hardly a surprise. Rumours and reports to this effect had been leaking out of the party camp for weeks. But while this decision clears the air of any lingering uncertainty about José Luis Rodríguez Zapatero’s future, that of his party remains very much shrouded in mystery. According to the Socialists, their leader’s calculated withdrawal puts them on the front foot as the May 22 local elections approach. Zapatero, they reason, has taken the initiative, choosing when to go rather than allowing events to dictate his course. This is … [Read more...] about Zapatero was damned if he did and damned if he didn’t
Adios to Zapatero in 2012?
The likelihood of Zapatero seeking a third term in 2012 has been looking increasingly slim for months as the economy has remained mired by the global financial crisis and his Socialist Party’s ratings have deflated in opinion polls. The party looks likely to face a severe lashing in local elections in May. Several surveys, including one (admittedly unscientific) poll by Iberosphere, have found that few people think Zapatero will try to stay on. In the Iberosphere poll, published on the home page for the past month, a full third of respondents said they thought Zapatero would not seek re-election, versus 22 percent who thought he would and 12 percent who said they didn’t know or didn’t … [Read more...] about Adios to Zapatero in 2012?
Socialist disarray points to heavy local election loss
A snowballing corruption scandal in Andalusia; a bizarre electoral list mix-up; a cancelled campaign rally; and a hospitalised minister. The last few days haven’t been good for the Socialist Party (PSOE). All these developments have been, to varying degrees, bad for the Socialists as they prepare for the May 22 regional and municipal elections across the country. As a result the party has given off an image of rushed improvisation and poor communication, just when a cool head was needed. The “ERE” scandal is dragging the names of several Andalusian Socialists through the mud, due to their association with a scam which saw the fraudulent doling-out of early retirement payments. … [Read more...] about Socialist disarray points to heavy local election loss
Spain held hostage by its banks
When the global financial crisis erupted in 2008, the Bank of Spain was one of few regulators lauded for having had the forethought to enact measures aimed at protecting the banking industry. It had prevented Spanish banks and savings banks from handing out the junk loans that brought down several American lenders, and, uniquely, it created a €40-billion “anti-crisis” fund at a time when many shorter-sighted bankers, economists and analysts thought the credit boom, on the back of low interest rates and rising property prices, would continue indefinitely. Four years later, Spain’s economy is now being held hostage by its banking industry as fears about the ability of banks and, in … [Read more...] about Spain held hostage by its banks
Bye-bye to Spain’s savings banks
Once there were 45, now there are 17. And within a few months there could be even fewer. Spain’s savings banks, or cajas, a common feature of the country's financial landscape for almost two centuries, are becoming an endangered species. The smallest and weakest have fallen first, gobbled up in a series of inter-bank mergers and acquisitions triggered by their exposure to the worst of the fall-out from the international financial crisis and the popping of the Spanish property bubble. New rules introduced by the Spanish government will ensure the consolidation continues apace. The government will require all lenders to raise core-capital levels to 8 percent by September. … [Read more...] about Bye-bye to Spain’s savings banks
Time for a name change for the Socialist Workers’ Party
When the Spanish Socialist Party (PSOE) holds its annual conference this summer, the party faithful’s main task will be to dump its leader, Prime Minister José Luis Rodríguez Zapatero, and replace him with wily Interior Minster Alfredo Pérez Rubalcaba. While they’re at it, they might consider a name change more in keeping with the party’s sharp right-turn over the last year, for which Pérez Rubalcaba can take much of the credit/blame. Times are tough, and they’re going to get a lot tougher. Unemployment officially stands at 20 percent, growth rates are zero, and growing numbers of people are feeling the impact of the government’s austerity cuts. In short, the recession is hitting millions … [Read more...] about Time for a name change for the Socialist Workers’ Party
Economy the priority for Catalan election victors
Much has been made of the fact that the CiU nationalist candidate in the Catalan elections, Artur Mas, has said he would vote “yes” in a putative referendum on independence. However, having won the November 28 ballot in resounding fashion, he and his party will be worrying more about the state of the region’s economy than stoking the fires of separatism – at least in the short term. CiU won 62 seats in the regional parliament, up from 48 in 2006 and just six short of an overall majority, enabling it to govern alone for the next four years, although it will need help to push laws through. The governing Catalan Socialists saw their share of seats drop from 37 to 28 and their tripartite … [Read more...] about Economy the priority for Catalan election victors