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PP problems in Navarra
The independent party UPN (Union de Pueblo Navarro) has been acting as a branch of the main opposition party PP for the Region and form the Regional Government, tolerated by the national ruling party PSOE (the socialists). However, the UPN has now refused to follow the PP in a vote against the 2009 budget proposed by the socialist government, and has decided to abstain in the vote in the national parliament. The national leadership of PP has threatened to cancel the agreement of collaboration with the UPN and set up their own branch.
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Inheritance Tax re-introduced?
The substantial reduction in tax income has led the Government to re-consider its promise to do away with Inheritance Tax, which is now collected by, and goes mainly to, the Regions. Over the past year, a number of Regions have reduced the deductions to the extent that it has almost disappeared in the Regions of Madrid, Murcia and Castilla-Leon and is considerably reduced in the Baleares, Valencia, Aragon, Castilla-La Mancha and Cantabria. The Regions are protesting against the intention of the Government, but Minister of Finance Solbes has answered them: “One cannot lower the taxes and afterwards ask for more resources from the state.”
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Fiscal values on properties up
We have already warned about the plans to increase the tax values (valores fiscales) on properties, to augment the tax income (especially the IBI charged by the municipalities). The Treasury has now embarked upon a re-valuation of 3.25 million properties for this year, to be followed by another 4.3 million next year.
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60 % of all lettings in “black”
The tax directorate has found there are more than 1 million properties being let, without the owners paying any taxes. This means 60% of all lettings in Spain are “in the dark”. The total non-declared income is 2,100 million euros. In Extremadura 71.8% of all letting income is not declared, in Andalusia 73.5% and in the Canary Islands 66.5%.
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Euribor at 5.5%
Whilst the European Central Bank maintains its rate on its extensive loans to the banks, the rate for inter loans between the Spanish banks has now increased to 5.5%, thus indicating the lack of funds held by the banks and their mutual distrust of each other. The rate rose from 4.6 in October 2007, meaning an increase of 80 euros per month on the repayment of mortgages of 150,000 euros over 25 years.
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108 million hidden 500 euro notes
The Spanish have hidden 108 million 500 euro notes, in safes, false walls and mattresses. This represents a sum of 54,207 million euros earned in the black economy during the property boom and kept out of normal circulation. Some people in the government have proposed to give fiscal incentives if this money is deposited in the banks, to provide the banks with much wanted cash. However, Banco de España and the Tax Agency of the Finance Ministry are protesting against the idea of an amnesty.
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Unemployment accelerates
95,367 more people were added to the unemployment register during September, bringing the total to 2,625,368. Over the 12 past months registered unemployment has risen by 30.14%; an increase of 608,005.
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Seat cuts productions meaning jobs
Car sales have fallen 22% so far this year and car producers are both reducing production and cutting jobs. Seat has announced the loss of 750 workers from their factory in Martorell, Barcelona, before December this year and a further 500 jobs will go between January and July next year. Ford, General Motors, Iveco and Santana have also cut production in their Spanish factories.
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Spain increases guarantees for bank deposits
The Spanish government decided to increase the guarantees for client’s bank deposit from 20,000 to 100,000 euros and to create a fund of 30,000 million euros, which may be extended to 50,000 million to buy healthy assets from banks to guarantee the liquidity of the Spanish market. The decision followed a recommendation from the European Union to increase the minimum for bank guarantees from 20,000 to 50,000 Euro or more.
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Dramatic fall in road accidents
In 1989 the staggering number of 6,095 people died on Spanish roads. From then subsequent governments took various initiatives to reduce the fatalities. They were helped by better roads and safer car, but the real change in the trend came with the introduction in 2006, of the driving license “points system.” The number of dead on the roads fell in that year to 3,016; in 2007 it was 2,741 and so far this year the number of fatal accidents is down 39.4%.
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