Despite recent reports that Spain itself was feeling “bullish” about the recession, it seems that expats living in Spain would do well to not get their hopes up and to continue to expect the recession to continue well into 2010.

The Spanish economy is struggling to catch up with the European monetary union.

On the same day as the UK announced that it has formely exited the recession, the International Monetary Fund (IMF) have confirmed what many have been saying, that Spain will remain in recession throughout 2010, with low growth forecast for 2011.

Good news for people with qualifying accounts that plan to travel to Spain, or live in Spain on a part-time basis as they will be able to take money out of any of Santander’s cash machines without incurring any foreign transaction fees.

People with accounts or mortgages with Santander or Alliance & Leicester can now also apply for the Zero Credit Card, offering no interest on balance transfers for the first year and zero interest on any purchases made with it in the first three months.

The Spanish Government’s recent plan to extend the smoking ban to bars and public spaces has been opposed by the Spanish catering industry because of the economic consequences it might have on the industry which is already suffering from financial turmoil.

A report issued by the Almeria Farmers Association (COAG) together with consumer associations UCE and CEACCU confirms that in 2009 the price difference between what farmers sold produce for and the price consumers had to pay had increased six-fold. Especially in produce grown in Almeria green houses such as courgettes, aubergines, cucumbers, peppers, tomatoes, melons and watermelons.

The price of Almeria produce has increased by an average of 620 per cent while in the rest of the country the increase is of 490 per cent.

The European Central Bank (ECB) has kept eurozone interest rates on hold at a record low of 1% for the eighth month in a row.

The decision was widely expected by economists, with Europe still recovering from recession.

But it follows positive data on the eurozone, with industrial production found to be growing twice as quickly as expected.

Interest rates have been at 1% since May last year.

Greece fears

The worst British recession in almost 90 years came to end in the final three months of 2009 with economic growth of 0.3pc, a think tank has estimated.

The National Institute of Economic and Social Research (NIESR) data showed a 4.8pc fall in gross domestic product (GDP) for 2009, Britain’s biggest contraction since 1921.

Describing the downturn as a “depression”, NIESR said that output fell sharply for 12 months until March 2009, “and has not changed very much since then, although evidence of a recovery is starting to emerge.”

Spanish giant Santander has stepped up the high street banking revolution by kicking off the rebranding of its Abbey and Bradford & Bingley branches.

Around 300 branches in London and the South East will be the first to undergo the name change, with another 700 outlets across the rest of Britain getting the treatment within the next three weeks.

Hundreds of British expatriates have been left out of pocket because the Government is refusing to pay them disability benefits.

The European Commission is now taking ministers to court over their decision to deny the benefits to British citizens living on the continent.

Campaigners say the withdrawal of the Disability Living Allowance to Britons living overseas has left many struggling to cope on severely reduced incomes.

Unemployment in the 16 countries that use the euro hit 10% in November for the first time since the single currency was introduced in 1999.

The unemployment rate in the eurozone is now at its highest level since August 1998, Eurostat said.

Some 15.7 million people are out of work in the eurozone.

Across all 27 countries that make up the EU, there are 22.9 million people unemployed. The jobless rate rose to 9.5% in November from 9.4% in October.

Anheuser-Busch InBev, the world’s largest brewer, is to cut 800 jobs across western Europe, 10% of its 8,000 workforce in the region.

The firm said the move was a response to falling beer sales, with the layoffs spread across Belgium, Germany, the UK, the Netherlands and Luxembourg.

The news trigged protests at the firm’s brewery in the Belgium town of Leuven, where it also has its headquarters.

Anheuser-Busch InBev’s brands include Becks, Budweiser and Stella Artois.

The Chinese are just coming to the end of the Year of the Ox; financial markets, however, have just begun the Year of the Pigs. By Pigs, blunt-tongued traders do not mean the roving four-legged sources of bacon, but Portugal, Italy, Greece and Spain – four countries in the European single-currency club with mountains of debt and full-square in the sights of financial-market vigilantes. (Add on Ireland, also precariously positioned, to get Piigs – and the equivalent of a European investors’ watchlist.)

There are now just under four million unemployed in Spain

Unemployment in Spain rose by 794,640 over 2009 and now stands just short of four million at 3,923,602, a number 25.4% higher than a year ago.

The numbers come from the Ministry for Employment, and are the highest seen since 1996 when comparable counting systems were introduced.

Marbella has announced plans to promote the city and its main attraction – tourism, through its own YouTube channel so that hotels can transmit the videos through their own TV channels.

A new website, which will include a reservation system and a forum will put this strategy into practice. The idea that Marbella announced also aims to have people who visited Marbella to post their own videos online.

The Economist – house prices in Spain still 55% overvalued

The Economist magazine has claimed that houses in Spain remain 55% overvalued. It uses the ratio of house prices to rents to make the claim. Using 1990 as a reference, they claim that the over-valuation is still 24%, and say the adjustment needed in Spain is the largest in the main economies. The report considers that house prices here will continue to fall, as they will also do in France and Ireland, claiming that the recent falls have not yet reached bottom.
Read The Economist article – here

Spain’s Economy Ministry has said in a statement on Monday that the deficit of the central government reached 71.52 billion euro ($103.02 billion) for the first 11 months this year. This is approximately 6.79 percent of the gross domestic product, and is more than five times last year’s figure of 13.96 billion euro.

The reason for this rise in budget deficit is the fall in tax revenues and the ever increasing costs of tackling the economic meltdown, said the government in Madrid on Monday.

The cost of several basic items and services went up in Spain with the arrival of the New Year

The last recourse TUR electricity tariff, the only one where the price is fixed by the Government and which is used by 22.7 million homes and small businesses, has risen by 2.64%. It means an 89 cent increase for the average user each month. The old night use tariff has not increased and the bono social with installations of less than 3Kw, are also unchanged.
Pensioners and numerous families will pay no more, nor will families where all members are unemployed.

The Spanish minimum wage has increased by 1,5% on the 1st of January.

The amount, bitterly denounced by unions as “useless”, is 0,5% more than was expected, and, indeed, announced two weeks ago. Meanwhile, state pensions have gone up by an average of 8,6%.

633,30 euros a month but “promises broken”

This means that the minimum monthly wage for a full time contract is now 633.30€.

The IBEX 35 stock market index rallies 30% over 2009

The Spanish stock market main index, the Ibex 35, rose by 30% over 2009. In line with other bourses it showed a strong recovery from March when countries launched the stimulus packages around the world. The increase from March has been truly spectacular, up 75%. Some profit taking in the last session saw the index close below the 12,000 level at 11,940.
Banco Santander and BBVA have seen their share prices increase by 71% and 44% respectively over the year, and outside the banking sector Telefónica has seen a 23% revaluation.
The biggest climber was Técnicas Reunidas which has risen 117% over the 12 months.
However the prospects for next year are not so optimistic as smaller domestic companies are still hit by recession.

Zapatero promises recovery for next year

Spanish Prime Minister, José Luis Rodríguez Zapatero, has admitted that 2009 has been ‘an economically very difficult year’, but he claimed that the recovery would be confirmed in 2010. The Bank of Spain has agreed that the indicators point to a recovery next year, but also warns that the improvement will be ‘limited’.
Speaking at a press conference after the last Cabinet Meeting of the year, Zapatero claimed the Spanish economy was in a moment of transition and underlined that the Government would maintain social cohesion and harmony.
‘The citizens who have lost their job are the Government’s grand concern’, he said.