Tuesday, October 30, 2007

Fistful of Dollars

Taken from TypicallySpanish.com, bit of business news from Spain, including a reduction in the Euribor rate at last, and mention of the appalling minimum wage in Spain.

Spanish company Ferrovial has announced a 142% hike in profits for the year to September compared to last year. The number comes in at more than 800 million €, thanks to the integration of the British Airports Authority and plusvalías on deals resulting from the sales of the company’s interests in the airports of Sydney and Budapest.The numbers are good for the company although there was no increase in profits from the construction sector.Nearly two parts of the Ferrovial business is now generated outside Spain.

The Euribor rate, the interest rate used by banks to set mortgages has finally fallen after two years of consecutive monthly rises.The rate is expected to end the month of October around 4.64%, certainly lower than the September figure of 4.725%.Despite the news families who see their mortgage rate readjusted on an annual basis in October will still have to tighten their belts.

There is a debate in economic circles as to the effects of the Prime Minister’s promise of a large increase in the minimum wage in Spain. Even the economists cannot, it seems, agree on the effect on the economy.The current wage is 570, 60 Euros, and the Government has proposed an 8% increase in that annually over the next 8 years, taking it to 816.5 € in 2012.The Partido Popular have attacked the promise, claiming that an increase would affect inflation and unemployment.However the debate is largely theoretical, given that less than 1% of workers in Spain are on the legal minimum.

The Parquesol real estate company has announced a 48% fall in profits for the year to September, coming in at 24.8 million € following a fall in sales. The company spent 43 million € buying land in Madrid, Cádiz and Málaga. Income from rentals was up 15% at 15.4 million €.El País reports today that Spanish companies have 6 billion € legally lodged in accounts in financial havens over the past ten years. The Caymen Islands and Panama are the two areas preferred by the Spanish to avoid taxes, followed by the Virgen Islands and Bermuda. The data comes from the Foreign Investment Society, which is dependent on the Ministry for Industry. Nearly 80% of the money found in such places are investments which are from financial services, or holdings. The latest OECD report, two weeks ago, drew attention to the levels of international fiscal fraud.The Madrid market has today consolidated its position above the 15,700 points level, following similar gains seen in European markets. The main players such as Repsol, BBVA and Santander are all up more than 1% on the day.It comes as oil prices have continued to rise and are now close to 90 dollars a barrel.

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