Live News From Spain As It Happens

MADRID, Jan 29 (Reuters) - Spain's unemployment rate hit a nearly 12-year high of 18.8 percent in the fourth quarter of 2009 and is expected to climb further this year as billions of euros in anti-crisis spending winds down.

The unemployment data for the last three months of last year reported on Friday was up from 17.9 percent in the third quarter and compared to 18.5 percent expected by economists polled by Reuters.

The number of Spaniards out of work rose by 203,200 to 4.3 million people in the same period, the data from the National Statistics Institute showed.

Joblessness is now nearing the 19.4 percent reached in 1998, a figure analysts expect to be surpassed.

"The rate is going to increase to 20 pct but not that fast. The pace of the increase will not be as fast as last year," said Giada Gianni of Citigroup.

The higher-than-expected figure came ahead of a government plan to slash spending, to be detailed later on Friday, to bring the public sector deficit down to 3 percent of gross domestic product by 2013.

Separately, flash consumer price data showed European-Union harmonised inflation was 1.1 percent in January from a year earlier, the third consecutive positive figure after high energy prices in 2008 lead to 8 straight months of falling prices.

Sluggish economic growth will keep Spanish price rises down over the next few months, though inflation pressures will return after the government introduces a 2-percent hike in value-added tax in July, analysts believe.

Spain's EU-harmonised figure comes just hours before inflation for the whole euro zone, with economists expecting prices to have risen 1.2 percent in January, up from 0.9 percent in December.

"Strong fuel prices in January have pushed inflation up on the previous month, but that has been offset by very high fuel prices in January of last year, so there have been some favourable base effects from that," said economist at RBS Nick Matthews.

"These figures are no surprise and are consistent with what is expected from the euro region flash later on today." (Additional reporting by Judith MacInnes; Editing by Andy Bruce)

Source:  ForexYard

Falling property prices, a weak pound, and fears over job security are forcing those living abroad to rethink the move.

Britons residing in Spain are suffering the most financially, with four in five complaining that the drop in the value of the pound against the euro has left them worse off.
 
For many of the estimated one million Britons living in recession hit Spain, where unemployment stands at almost 20 per cent, the dream has turned sour.

The poll commissioned by Moneycorp, the UK foreign exchange specialist, found that 74 per cent of those living in Spain are considering repatriation.

Some 37 per cent of those who responded to the survey said they were already looking into returning home and a similar number said they may have to consider the option in the future.

British expats in Germany, Italy and France also responded with 38 per cent, 34 per cent and 33 per cent respectively stating that they would move back to the UK permanently.

David Kerns, Head of Private Clients at Moneycorp predicted a surge in the number of expats returning to the UK from countries within the European Union over the coming months.

"Our research shows that British expats have had a tough time and the findings reveal that no country has escaped unharmed from the economic downturn," he said.

"Brits living in Europe are feeling the effects of the weak pound as they are more likely to be reliant on income from their British property, UK pension and other regular sources of funds."

Those that own property abroad have seen the problem compounded by a dramatic fall in the real estate market, particularly in Spain, where prices on the Costas have dropped as much as 65 per cent.

"Brits living in Spain are particularly affected by the struggling property market with many owning holiday homes and letting out their Spanish properties," explained Mr Kerns.

But he said that British expats could do more to protect their income and avoid "nasty surprises" due to currency fluctuations.

"During challenging times, there is certainly more that expats can be doing to manage their money and make sure that they are making the most of their income," Mr Kern advised.

"By monitoring the currency markets and seeking expert guidance they can avoid nasty surprises in exchange rates and determine the best time to transfer money to and from the UK."

Source:  Telegraph

Corruption has a long tradition in Spain. But lately, the country has experienced an explosion of scandals.

Hundreds of mayors and other officials across the country are being investigated for bribery and influence peddling, and police have seized assets worth billions of dollars. The government and the opposition agree that things have to change.

Boadilla del Monte, a small hill town about a half-hour west of Madrid, has achieved notoriety in Spain because of its former mayor, Arturo Gonzalez Panero. He was forced to resign earlier this year after being implicated in an influence-peddling network that extended to Madrid, Valencia and the Costa del Sol. A court in Madrid has frozen millions of dollars of his assets.

Nieves Castillejo used to work for a catering firm that handled parties in the mayor's home.

"There was more money there than a mayor should be earning," she says. "You could see it in the paintings, the statues and in the catering itself — like caviar and other things."

Castillejo says the corruption was an open secret in the town.

"We knew it smelled like fish, but we didn't realize the scope," she says.

Boadilla del Monte is just one of many Spanish municipalities tainted by scandal. According to the Interior Ministry, nearly a thousand people have been arrested in anti-corruption probes in the past five years. Police have seized assets worth more than $4 billion, including artworks, luxury cars and hundreds of prize fighting bulls.

Many of the scandals revolve around the concession of building permits. During the past decade, Spain was the focus of one of Europe's biggest housing booms. Rezoning a plot of land for construction could multiply its value many times over.

In Valencia, politicians also got money and gifts in exchange for contracts to organize public events, including Pope Benedict XVI's visit to the city in 2006.

The firm that was subcontracted to televise the Mass led by the pope allegedly diverted more than 2 million euros in illegal gains, according to the newspaper El Pais.

Images on television news shows of police arresting mayors or other local government officials have become almost a daily ritual of late.

Political science professor Manuel Villoria says the many years of the Franco dictatorship, which lasted from 1939 to 1975, left Spaniards distrusting the political system. Favoritism persists because many people rely on contacts, or enchufes as they are called in Spanish, to get things done.

"Even judges call me and ask, 'Hey, why didn't such-and-such student get admitted to your university? Can't you do something about it?' " says Villoria, a board member of the Spanish chapter of Transparency International, a nongovernmental organization that promotes honest government.

"Even judges! That's how pervasive it is in our culture," he adds.

But politicians at the national level worry about the bad rap their parties are getting as a result of the scandals. The ruling Socialists and opposition conservatives plan to propose a new local administration law this spring. Experts say that for anything to really change, the law would have to rein in the nearly dictatorial powers that many Spanish mayors still enjoy.

Source: npr.com

The nation's top hams - the world-renowned jamon Iberico - were traditionally given away in corporate gift hampers to employees and favoured clients but the practice greatly diminished this season as companies struggle to survive the recession.

The industry estimate sales of the traditional cured leg of Iberian pig could be down as much as 20 per cent during the festive season, a period which usually accounts for more than 60 per cent of annual revenue for ham producers.

With an estimated four million hams unsold, the gourmet foodstuff is almost being given away.

Hams have become the most popular promotional gift being offered free to Spaniards who purchase a Caribbean cruise, open a new savings account or even purchase a one-way ticket with a budget airline.

Spain's pig farmers fear the nation's austerity during the economic crisis has coincided with years of excessive production culminating in an unwanted ham mountain.

Julio Revilla, chairman of the meat industry association Iberaice, said the boom years of Spanish ham production had created a bubble much like that in the nation's property sector.

"On the basis of easy credit and thanks to permissive legislation that treats all types of ham equally, many people, including many real estate investors, got into the business, and production increased massively," he told the newspaper El Pais.

The ham market had become saturated by lesser quality products, he said, with about 6.5 million legs of grain-fed Iberian pigs offered on the market in 2009 compared with 1.5 million a decade ago.

Although the top-quality jamon belota from the acorn-fed pure-bred Iberian pigs still commands a high price, the cost of lesser quality hams has halved in the past 12 months.

The glut of jamon follows a similar crisis in the foie gras industry in France. Last month producers gave away 14 tons of the delicacy to charity after hugely overestimating the demand at Christmas.

Source: Telegraph.co.uk