Public deficit threatening to get out of hand

Despite spending cuts and tax hikes, the Spanish government is still struggling to rein in the public deficit. The shortfall in the central government’s books widened in the four months to April as a result of increased spending on unemployment payments and interest on debt, while tax revenues fell due to the downturn in the economy, the Finance Ministry said Tuesday.

Government presents Entrepreneur Support Act

The future legislation will facilitate the creation of new companies and provide a comprehensive response to the self-employed and SMEs. The government stressed that this is a key reform for economic reactivation and job creation.

The Council of Ministers analysed a report on the Draft Bill to support entrepreneurs and their internationalisation.

Spain offers residency papers to foreign buyers and investors

The government has included in the Entrepreneurial Law a clause granting residency to foreigners who buy more than two million euros' worth of public debt in an attempt to attract capital and investment.

Deputy Prime Minister Soraya Sáenz de Santamaría announced the scheme after Friday's Cabinet meeting, arguing that it did not amount to selling residency papers and that the UK, Portugal and Ireland have similar policies. "The system is generalized," she said.

Residency permits will also be granted to foreigners who buy real estate in Spain worth more than 500,000 euros and to those who invest in business ventures, create jobs or foster research and development.

Collective accords to be extended while talks go on

Labor unions and business organizations have reached a preliminary agreement under which company collective bargaining accords that have not been renewed will be extended if negotiations on their renewal hold out the prospect of prospering.


The agreement removes the threat of some 2.5 million workers whose collective accords have expired seeing the conditions of their salaries, working hours, professional category and disciplinary framework left in limbo after July 7.

Workers suffering brunt of internal devaluation

The average monthly salary in Spain last year was 1,630 euros, 15.3 percent below the equivalent figure for the European Union, according to a study by temporary employment agency Adecco and consultant Barceló y Asociados.
The average in Spain last year was up 0.5 percent on the previous year. However, taking inflation into account, workers suffered a fall in their purchasing power of 1.9 percent.

Spanish taxpayers declare assets held overseas worth nine percent of GDP

Spaniards and foreigners resident in Spain have declared assets held abroad in the form of bonds, shares, real estate and bank accounts of 87.7 billion euros, equivalent to nine percent of the country’s GDP.


As part of the government’s assault on tax evasion and fraud based on legislation passed last year, the Tax Agency now requires all taxpayers in Spain to declare assets worth more than 50,000 euros in any of four different categories of investment.

New Coast Law to help half a million people, says ministry

The conservative government’s new Coast Law, which is significantly more lenient than its predecessor, will benefit over half a million people who own homes, hotels, beach bars and other businesses right on the beachfront. “Let’s take advantage of the impact that’s already been done,” the secretary of state for the environment, Federico Ramos, said on Friday.

Free Business Registration.

Our office is a PAIT, the only business office in Orihuela Costa registered at the Industry, Tourism and Commerce Ministery as PAIT in order to offer FREE BUSINESS REGISTRATION (Free Self Employment Registration and Companies Formation) to all the persons that are looking for a new business life.

Jobless claims fall for second month in a row in April thanks to hostelry sector

Jobless claims dropped for the second month in a row in April, bringing some welcome relief to Spain’s sclerotic labor market. But the improvement was largely due to seasonal hiring in the hostelry sector.

According to figures released Monday by the Labor Ministry, the number of people signed on as out of work at employment offices across the country dropped by 46,050, or 0.91 percent, to 4.989 million.

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Recession eased at start of year but seven-quarter contraction confirmed

Spain’s National Statistics Institute (INE) confirmed on Tuesday that GDP had contracted by 0.5 percent in the first quarter of the year compared to the end of 2012, a figure which is in line with what the Bank of Spain indicated last week.

Spain’s second recession in the past four years now stretches back seven quarters, although the 2008-09 dip was deeper. Compared to one year ago, the economy has contracted by two percent.

ECB rate cut underpins sovereign debt markets

Spain’s risk premium on Thursday was steady at a level last seen close to two years ago after the European Central Bank confirmed market expectations by cutting its key intervention rate by 25 basis points to a record low of 0.50 percent. As the euro zone slips into recession, the measure is aimed at helping keep inflation in check.

The spread between the yield on the Spanish benchmark 10-year government bond and the German equivalent dropped below 290 basis points prior to the announcement at levels last seen in August 2011. At 3.20pm, it was flat at 293 basis points, compared with Wednesday’s closing level.

“Inflation expectations for the euro area continue to be firmly anchored in line with our aim of maintaining inflation rates below, but close to, 2 percent over the medium term,” ECB President Mario Draghi said in a statement after announcing the rate cut.

“At the same time, weak economic sentiment has extended into spring of this year. The cut in interest rates should contribute to support prospects for a recovery later in the year,” Draghi said.