EU postpones response to economic emergency again (Júlia Manresa Nogueras)

The eurozone economy could fall by 15% due to the coronavirus pandemic. The impact is clear when you put it next to the 4.9% drop that was experienced in 2009. It is the warning to sailors with which the President of the European Central Bank (ECB), Christine Lagarde, tried to raise awareness leaders so that they do not do “too little and too late” and approve a “fast, firm and flexible” recovery plan. And the Twenty-seven know that, but they still don’t agree on how to do it. In recent days, positions have come closer, especially after the South renounced any debt pooling. Yesterday they agreed to create an economic recovery fund that will be linked to the new EU budget, but they have not agreed on the size, the form, or how to distribute the money, if it sees more credit (as the north wants) or to through direct transfers (as required by the south).

The brutal work will be up to the Commission, which, after listening to everyone and gathering ideas from all over, has to come up with a proposal in the coming weeks that tries to gather all the concerns. Then the leaders will have to give the final green light, and all this leaves the final decision for June, when they hope to meet physically. And this despite the “emergency” awareness that the President of the European Council, Charles Michel, admitted yesterday after a video conference that closed without a document of conclusions, despite the fact that it was a key appointment to avoid the unequal collapse of the European economy and for the integrity of the single market itself. As the President of the Commission, Ursula von der Leyen, warned, without “decisive and collective action, the recovery will not be symmetrical and divergences will increase”.

But after so many comings and goings, where is the discussion now? Coronabons are definitely ruled out and a half-trillion shield in credits (for companies, ERTOs and healthcare systems) has been approved, which will be launched in June. With this decided, the debate revolves around how to articulate an economic recovery fund linked to the EU budget for the period 2021-2027 and which must be debated again. The discussion is stalled precisely because the north did not want to contribute more money. All of this will now be mixed up, which for some may further delay the discussion while for others it may be the necessary push.

The figures also generate some consensus around 1.5 trillion, but how this sum will be reached is a mystery. That is why, after gathering all the positions of the different European blocs, the leaders have left the final proposal in the hands of the Commission, also because it is Brussels that has the legislative initiative. Von der Leyen presented to the leaders yesterday a proposal for funds linked to the European Community budget that “will find the right balance between loans and direct transfers”. To reach up to 1.6 trillion euros (which is the plan he is working on), it would be necessary to raise the spending ceiling of the EU budget for the coming years and support a debt issue from the European Commission itself ( which has already been done before) and which, in practice, does not involve mutualization of the debt, precisely because the money is then made available to states that request it through transfers or cheap credits. From there, different internal or budget-related mechanisms would mobilize this high amount. In fact, the draft proposal foresees that the fund will only contain about 320 billion euros and that the rest of the money, up to 1.5 trillion, would be activated through various mechanisms of the community budget.

The Commission has presented this first draft after France presented the first fund idea with shared debt, the Netherlands its with gifts from north to south, and Spain its with perpetual debt issued from Brussels, a proposal that finally Italy take on. Perpetuity is already completely ruled out, but Paris, Madrid and Rome are pushing for the debt to be issued in the very long term. Knowing all this, now the battle is between credits and transfers and also in the pace of response. Therefore, the different European leaders appeared with relative satisfaction and full of nuances.

French President Emmanuel Macron was blunt: “Europe’s borrowing is not up to the task. Because? Because loans would already add to the debt of the most fragile countries and worsen financial imbalances. ” Macron is clear that with more credit the problem is not solved: “They must be real transfers, budget transfers.”

In the same vein, Italian Prime Minister Giuseppe Conte called for urgency and even called for a “bridge” mechanism to gain access to these transfers, given that they may not be effective until the end of the year. But for his Dutch counterpart, Mark Rutte, the emergency is resolved with half a trillion credits activated by the Eurogroup and which include the rescue fund that neither Spain nor Italy want to ask for. “There are 520 billion euros available, I would be stunned if we spend them all before the end of the year,” said the Dutchman yesterday, assuming that to finish detailing everything will take time and also that the recovery fund it will be structured mostly in the form of credits. Pedro Sánchez did not appear in Spain, but the Minister of Foreign Affairs, Arantxa González Laya, did so, claiming the role of Spain “at the center of the game” in changing the tone of the talks, although the demands Spanish initials have been diluted and that the south, for now, is the one who has yielded the most.


The country most affected by the pandemic and also one of the weakest economies in the EU with 135% debt. From the beginning he demanded to share risks, mutualizing debt so as not to have to borrow more, but he has already yielded in this line and now accepts a fund of 1.5 trillion euros in perpetual debt to give direct transfers , no credits.


It’s the other end of the story. He has managed to remove the coroners from the debate and now focuses his opposition on how to distribute the money from the recovery fund. He wants it to be just credits and that if there are transfers they are made through the EU budget, a budget that The Hague does not want to see fattened at the expense of its southern neighbors.


It has made hinge. He was on the side of Italy at the beginning of the discussion, but has abandoned debt pooling. Italy made the turn after Spain presented a proposal similar to the French one and it picked up ideas that the socialist commissioners had already dropped: a fund of 1.5 trillion through debt issued by the Commission and backed by an increase in EU budget and that would be perpetual. The latter part is ruled out by the northern opposition. Spain asks for transfers and not credits, but would accept a combination of the two.


He always stands firm against the coronabons and on the side of The Hague, but seeking to focus the debate. That is why Berlin said this week that it was willing to increase its contribution to the EU budget has been key to making the issuance of debt by the European Commission a viable project.


Abertis to pay € 875 million to ACS and Atlantia despite the fall in toll road traffic (Àlex Font Manté)

Neither the widespread collapse of car traffic nor the uncertainty caused by the coronavirus have prevented Abertis’ shareholders from approving a dividend of € 875 million, the third highest dividend in its history. The concessionaire therefore has plans to pay generously to its shareholders, which are now basically two: Florentino Pérez’s ACS group and Atlantia’s Italian group. Just over 1% of equity is still held by small shareholders.

As the company has historically done, dividend payments will be split in two parts, one in April and one in November. The first half of the € 875 million will be paid next week, while the second half will be delivered in November.

Before paying the latter half, the board will make sure that the dividend does not penalize the note given by rating agencies to Abertis, as this would force it to pay higher interest rates on its debt, ‘company in a statement. In the same text, the company has “thanked the support” of its shareholders for the “flexibility” they have shown in dividing the dividend into two halves.

Who will pay for the traffic decrease?

The widespread confinement caused by covid-19 has plummeted the influx of cars on the toll roads of France and Spain, the two countries that offer the most business to Abertis today.
The drop was particularly bloody during the days when only workers in the essential sectors were allowed to move: during Easter, for example, the number of vehicles passing the Spanish Abertis toll roads dropped by 84%. In the case of France (where Abertis controls Sanef, the country’s largest concessionaire), the drop was almost identical, with 82%.


Decline in traffic on the Spanish Abertis toll roads during Easter

It is not clear who will have to pay the bill for this traffic decline. The last time Spanish motorway traffic dropped sharply, during the last crisis, Abertis demanded a compensation of 3 billion euros from the state because the car inflow levels were not reached provided for in the AP-7 concession contract. The matter ended up in the Supreme Court, which made a surprising decision: until 2021, when the last concession of the AP-7 expires, it would not say who was right.

Since the Supreme Court did not rule, we do not know now whether Abertis will have the right to claim compensation from the traffic slowdown that is being recorded in the state in recent weeks.

The opa raised the debt

Abertis, among the large Catalan companies, has the highest debt compared to its ebitda (profit before taxes and other concepts), as revealed in an article published on Saturday in the ARA. Specifically, while most large companies are not offended by this, Abertis currently has debt over six times its ebitda.

One of the reasons for these records is that their current owners (ACS and Atlantia) have repaid much of the debt they incurred to pay the cost of buying the company.

Atlantia and ACS pay Abertis half the price

To remain the concessionaire, ACS and Atlantia signed a bank loan of 9,824 million. Most of this money (6.5 billion) will be returned to banks with a bill payable by Abertis: on the one hand, 3.5 billion will be obtained through debt issuance of the concessionaire, while another, another 3,000 have been directly charged to the Catalan company in the form of long-term debt.

The remainder of the loan was paid off with the sale of investee companies, such as Cellnex or Hispasat.


The key is tax fraud

One of the meanings of tax fraud defines it as “the illicit activity that people or companies incur when they hide property or income from the tax authorities, or overestimate the deductible concepts, with the aim of paying less taxes than they legally owe” (Wikipedia) . By their very nature, it is impossible to calculate the amount of tax fraud in a country or territory, but what can be done are estimates. In fact, it is estimated that in Spain, in terms of GDP, tax fraud ranges from 6% to 9%.

For 2019, tax fraud amounted to between € 74,685 and € 112,028 million. So that we can understand the magnitude of these figures, Spain closed its public accounts last year with a negative balance of € 27 billion, and in terms of interest on public debt, it paid close to € 32 billion. This means that, in the theoretical assumption that in 2019 tax fraud would have been zero, Spain would have ended the year with a surplus, and with the difference it could have paid the interest on its debt.

The magnitude of the fraud

In any case, to understand the extent of tax fraud it is necessary to contemplate a sufficiently long chronological series and, in addition, it must be done with real values, that is, eliminating the reducing effect that inflation has. Thus, with euros from the year 2000, tax fraud in Spain between 2000 and 2019 (both included) reached a figure ranging from 1.54 to 2.32 trillion euros. These figures are six and nine times the GDP of Catalonia last year.

Things could look differently if in the current economic downturn we are in, Spain could have half of this figure that is disappointed every year, don’t you think?


Affected by ERTOs and without unemployment until May

March closed in Catalonia with almost 548,000 people affected by a temporary employment regulation file (ERTO). Most, however, found that on April 10, the maximum date they were expected to be paid unemployment, they did not receive any income from the State Employment Service (SEPE) in their accounts. The SEPE paid 2.5 million benefits across Spain in April, of which only 620,000 were new and most were ERTOs. Ministry of Labor spokesmen argue that between the autonomous community validating the ERTO and the SEPE, the benefit passes one week, and therefore all the files that entered at the end of March will not be charged until 2 or 3 May thanks to the agreement reached with the banking institutions, since the deposit is usually made on the 10th.

The ARA, however, has talked to employees who the company fired temporarily before and are still waiting for the benefit. One of them is Josep Soler, who works in an interior design firm and a furniture store. He received his share of salary until March 14, the day his ERTO came into force. “The only thing we have been told from the company is that we have patience, but with what I have charged I have to go to the supermarket and little more and I have to pay for electricity, water …”, he details. With your savings you can endure this situation for three months, parking all your future plans. “I was planning to change an apartment with my partner, but we have paralyzed it, and also the purchase of a car I need to go to work,” he says.

In his case, he also continues to work, in part – he admits – because he wants, since he has projects that must be completed by June. “The situation is so impressive that at least we could have been paid a part of unemployment because we didn’t have to ask the family for help,” he says.

Oriol Saura’s margin for survival is still lower than that of Soler. “One month, two at a time,” he says. In her case, she works at a home décor import company that sent them all home on March 14. In a normal month, he earns $ 900 net (in March he collected $ 390) and pays $ 300 for a purchased car. “If I had been hooked this month a month earlier it would have been a disaster, because I was without savings,” he says. Their salvation was in the extra pay in February and the advancement made by the company, knowing that their workers had not been paid unemployment. “We have advanced a little less than a monthly payment,” he says. Saura cannot understand how the unemployment rate is not speeding up in the heat of the pandemic. “I’m angry, it’s an unsustainable situation that will hit somewhere,” he says. To the chagrin of not charging is added the fear that the ERTO may become an employment regulation file (ERO): “We depend on the opening of stores; without shops we have no orders. “

Maite Mas’s case is less stressful because she lives with her family. He works for the public in a museum owned by the municipality, which is managed, however, by a private company, Ciut’art. Although the City Council of Barcelona when they closed the museum said that it maintained the workforce, the company decided to go for the right and submit the ERTO. “We charged until the 13th and from there, nothing more,” he says. The company has promised to supplement the salary by 30% – an ERTO charges 70% of the base salary – but has already told them that they will not pay this difference until the end of April. “It is a shame that we were not paid unemployment, there are colleagues who rely on this money to pay rent and bills,” he says.

Ministry spokesmen say that with the speeding of formalities that was approved on March 27, the arrears should not be repeated when presenting ERTOs. In May it will be possible to check if it is true.

The keys

1. Do you know the people affected by ERTOs in March who have not yet received the benefit in Catalonia?

No, the data provided by the Ministry of Labor is that in March 2.5 million benefits were paid throughout Spain. Of these, 620,000 were new and most were ERTOs. The ministry does not have the data broken down by community. However, taking into account that, according to the Ministry of Labor, in March closed with the presentation of more than 77,600 temporary files affecting almost 548,000 people, it is clear that many of those temporary unemployed people have not yet paid March unemployment.

2.When will unemployment pay?

They are due in May. The ministry estimates that from the 2nd to the 3rd they will already be able to charge it, thanks to the agreement reached with all the banking entities to advance this payment, which is usually done on the 10th. Part of March and April. The ministry assures that no other payment order can be made this April because the SEPE system prevents it.

3.And those affected by ERTOs in April will be paid unemployment in May?

It depends on when the file is filed. That is, the chapter of March will be repeated again. If the company submits it later this week or next, surely the worker will no longer be paid until June. The reason is that between the autonomous community and the SEPE it takes a week to validate the ERTO and the benefit, and if this procedure does not occur before the last day of the month it is no longer charged until the next.

4. Is there a way to speed it up?

On March 27, a decree was approved so that companies could expedite filing, but they would hardly be resolved by one week.


“Saving lives and preserving the economy are not contradictory things” (Esther Vera)

Àngels Chacón (Igualada, 1968) is the Minister of Business and Knowledge. From the confinement, he diagnoses the economic shock we are experiencing and the need for quick and forceful action.

Thank you for accompanying the ARA in these circumstances. Also, you are Igualadina …

Yes, confined since the 12th.

Did he choose to go home?

He was in the Government and Councilor Buch said to me, “You will have to decide if you will pass the confinement outside or from Igualada, but you will not be able to enter or leave.” For personal reasons, I decided to come to Igualada. It is also true that I did a lot of telecommuting and I always put my computer on it.

President Torra is very concerned about health issues and at times proposes a dichotomy between life and the economy. Is there a balance possible?

The life and security of all of us must be preserved in the first place, but that does not mean neglecting the economy. There are measures needed to support the productive economy that will allow access to credits, the suspension and moratorium on tax payments and direct subsidies to sectors. Therefore, this choice is wrong because while preserving health we can also preserve the economy. I don’t think the two things are contradictory.

Was it possible to overcome the seriousness of this situation?

Seeing it in perspective, surely. I remember the last time I traveled abroad. It was in Amsterdam for this fair that is coming to Barcelona next year, and then we saw what was happening in China, the empty streets, the confined people … And we could not imagine that this would come to us.

What impact do you foresee for the Catalan economy?

There are three vectors that totally condition it. U: We have a very diversified production fabric. Two: 95% small and medium enterprises. And three: very internationalized. Therefore, everything that happens around the world affects us greatly. In addition, we must add two of the essential sectors that we have. One is tourism, which brings us 12% of GDP, and is stagnant. The other is trade, which, except for essential supplies, is closed. These are two sectors that, at first, cease to receive any income and still have expenses. And we must add that we were already in a complicated situation because it was necessary to adapt our industrial fabric to what is Industry 4.0, that is, how we integrate new technologies in the industrial strategy. This will mean that many sectors, for example in the automotive industry, have to change business models, relationships with producers, suppliers, customers, etc.

When digitalisation was being applied, this crisis came.

We are in a very dangerous stop. That is why we insist that this business fabric must be preserved for at least a few months or the startup will be very difficult. There is uncertainty about how gradual the start-up will be, the return, I would no longer say normal but activity. We are obviously in a complicated situation, yes.

Could we say that in 2008 we came out thanks to internationalization and this time through digitalization?

We only come out of it if we take into account the global economy. We are interconnected, hyperconnected with the rest of the world. In the tourism sector, there are those who talk about domestic tourism, and here the most immediate campaigns are addressed. But in terms of figures, we in Catalonia are 7 and a half million inhabitants and last year we visited 19 million tourists. Obviously, knowledge and innovation will have to be generated, which is what gives the region competitiveness. That is why it is very important to take care of this innovative ecosystem with the start-ups including technology centers, research centers, the university system. The other aspect, of course, is the ability we have to inject liquidity into our productive fabric and to help it.

In this situation, what specific measures will you take and what will the State require to help the tourism and trade sectors?

What we are doing now is closely monitoring what is happening, then applying methodologies linked to artificial intelligence so that the actions we take are very effective. Today we can no longer launch campaigns in the abstract. We need to think very well which audience we are going to look for. But in the short term, campaigns to promote the domestic market.

And what does the Spanish government ask?

I ask the Spanish government, which has the most financial muscle, for direct help for a sector that has already lost Easter, while the summer looks quite lean. Therefore, direct aid and then the same as we ask the sector, that these months if there is no entry, they can not keep the costs. Therefore, suspension and moratorium on taxes and, obviously, later aid to the self-employed. In Catalonia, for the 540,000 freelancers we have, I do not ask to extend the quotas: I ask that they not be charged. They represent 185 million a month. If they have no income it doesn’t make sense for them to continue to contribute.

The freelancers claim that the aid established by the Generalitat is incompatible and bureaucratically complex. Do you agree that they are much better?

Yes, it can be improved. We are talking to the different departments because you may not need help and we ask for incompatibility. We will have to complement it and correct it, yes.

Immediately? The situation for the self-employed is urgent.

Yes, we are already talking with the socio-economic agents and also with the Aragonese Vice President.

The research and knowledge sector was made available to assist with the tests. Are they already collaborating?

It was our responsibility to activate all the research centers and it has not been easy. Each center now has both the machinery and the operational equipment for the preparation of these PCR tests. It was necessary to supplement it with the work of ACTION, in the search for reagents, and we have made them available to Health. It is now Health that determines when, how and with which groups the preparation of tests is prioritized.

Are they ready but not currently active?

I know that it has started to activate, but I repeat, the number on how many tests will be performed per day and in which groups, has Health.

Counselor, is the Government preparing for the end?

We have to take scientific criteria first, but from each department we have to see how it will come about and how we begin to focus it strategically.

The Process has had an economic component. Has this situation once again shown the boundaries of Catalonia as an autonomous community?

I really trust our management capacity, which here we have not been able to demonstrate completely because there has been a centralization of competences. Even a state like Germany, with all its lands, has opted for other solutions. This shift that sometimes occurs in decision making has hurt us. It is also true that our territory is different, with a much higher industrial GDP than the rest, and this means that we have our own demands that obey our reality.

Has cooperation and collaboration been replaced once more by the Madrid-centric vision of the state?

Yes. In that sense, I think it is clear that we have momentarily parked positions that were very opposite to how the problem was being managed. However, let us not go to the other extreme of saying that, taking advantage of this, we forget the rest and here we act as if nothing had happened, and now we also take the opportunity to rebuild Spanish unity. This is also a wicked discourse. People aren’t there to see confrontations, but it’s also not politically ethical to wrap up this whole patina of the coronavirus crisis on what pretensions.

Citizens sometimes find it difficult for politicians to cooperate.

Citizens are suffering, either because they have relatives in the hospital or because they have relatives or acquaintances who have died, and emotionally it is a difficult situation to be confined. Then there’s the economic element – a lot of people having a really bad time. This causes people to go through critical situations and it can sometimes be difficult to understand that there are such quarrels. But there is a social reality in Catalonia that we cannot hide, that it will return. That can’t be put under a mat.

Will this parenthesis end when elections are called?

Now people would not understand that we were running for election. I believe that the citizens ask us for efficient management, that we solve their problems in the first place. How long this break will be, I don’t know. Many times I have said that I carry the yellow bow on one side and the management on another. Now, without forgetting the yellow tie, we are asked a lot of management and I think that to overcome this crisis we will have to apply a lot of strategy and management. Now maybe it’s a frivolous thing to talk about these issues when some people are dying, when there are people who have no income, but it’s time to address them and it takes courage everywhere.

Can the supply of the new Moncloa Pacts be detrimental to the negotiation table with Catalonia?

The President has always been ready to collaborate in dealing with the health and economic emergency. However, do not use this to whiten or refocus the policy on the relationship with the Autonomous Communities towards a recentralizing model, because this will not work out. With measures to get out of the crisis, that no citizen of Catalonia thinks that for political reasons we will stop asking for help, claim the right one, and fight for measures. In that sense, we will be at 200%.

Do you have to approve your current budgets to get started? Do they adjust to the new reality?

To begin with, we must be honest. These quotes were made without thinking of covid-19, but we must approve them because it is the third year that they are extending. But adjustments and modifications will need to be made to adapt to the new situation.

One of the actors who were already in distress before this serious crisis is the automotive industry.

Yes. We made the most accurate mapping ever made in the automotive sector. We anticipated that there were about 211 companies at risk of disappearing in five years if they didn’t fit in the electric car. That represents a lot of jobs. You can imagine that. The entire sector represents 143,000 jobs. It is one of the issues that we must now address, because if we do not take care of our productive fabric we will also have more social expenses.

The health emergency has changed priorities. Are you satisfied with the budget in the Research Department?

I understand the vice president has to make a thousand balances, but he obviously wasn’t happy because there wasn’t enough staffing. There is one element that has been the National Pact for the Knowledge Society. The recipe is the one contained in the Covenant. I believe that in extreme situations like this, research is needed now. We now see that even our lives hang from the evolution of a particular field, in this case biomedicine. Therefore, it is not only their impact on saving lives, but also on the economy, this knowledge-based economy that we seek. It is one of the collective goals, I think, forgotten.

What do you miss most about being confined?

I’m home with my two kids and a dog. I obviously miss finding my mother, with the closest family and friends, embrace them, because even when you walk past her house or see her mother from the balcony or window and you down with the car, it’s a very strange situation. We all know we do it for security, but you want to hug her. I miss breathing and feeling the sea near, and obviously the hugs with a lot of people, friends, people on my team. But most of all, this sense of freedom.


The Moncloa SOS to the large Ibex-35

The economic situation Spain is facing is so difficult because of the pandemic that the Spanish government launched an SOS a few weeks ago to a traditional partner: the adults of the Ibex-35. As the ARA may have learned, while in Brussels the pulse of programs to allow the states to cope with the cost of a steep economic downturn, the executive who led Pedro Sánchez contacted major companies in the Spanish selective to give them a helping hand with a specific request: that they go to buy on public debt issues.

Sources aware of these movements have told the ARA that those requests were made between March 24 and 26. They were individual, not collective, contacts and, in full alarm, were not made in person, but by telephone. The sources consulted have indicated the Minister of Economy and Business, Nadia Calviño, and the Chief of Staff of Pedro Sánchez, Iván Redondo, as interlocutors. According to the same sources, none of these contacts were made personally by the president of the government. Both the Ministry of Economy and the Presidency, consulted by the ARA, avoided confirming this.

What Moncloa asked the chief executives of these companies was for them to buy public debt in the regular emissions that the State makes to meet their cash needs. And it did so to guarantee the success of these exits and to avoid being in the spotlight of the markets. In the previous recession, the risk premium (the overpayment that a government pays to the German to finance itself) became a constant headache and soared to the point that in 2012 observers took it for granted that Spain would go bankrupt. And the Sánchez government wanted to use the big companies of the Spain Brand to avoid getting to this point.

According to the newspaper, the consulted voices, who have asked for anonymity, the recipients of these requests from the Sanchez government were “the Ibex-12 or the Ibex-15”. The expression refers to the largest companies by size or influence: the five largest banks, including the Catalans CaixaBank and Banco Sabadell, the giant Inditex and energy companies such as Iberdrola, Endesa, Repsol or the Catalan Naturgy. Telefonica is also part of this leading group of companies, and so does ACS, of course, the company of the ubiquitous Florentino Pérez. However, the confidentiality of the talks has prevented this newspaper from compiling the exact list of companies that received this request.

The ghost of the patriotic good

The nature of the petition and the urgency of its choice meant that some of those who received those calls came to the conclusion that the government wanted to issue patriotic bonds. This is called the financial instrument for small investors that an administration launches in a time of difficulty. They tend to be more at risk and thus offer higher returns. In Spain, the last administration that resorted to this tool is the Generalitat, which made several broadcasts during the last crisis, both during the tripartite period led by José Montilla and later in the convergent government of Artur Mas. Each of these issues was the victim of a mockery of Spanish public opinion, understand that good patriotic Catalans as a proof of mismanagement by the government, then suffocated by falling revenue, the increase in the population at risk of social exclusion and the European rules against the deficit and the public debt.

But what Moncloa raised at the end of March for the Ibex-35 greats were not good patriots. They were normal and good guys. “The usual ones,” says a manager who was offered them. As they state, the only thing that made them special, or patriotic, is the express request of the Spanish government, and its need for the emissions to be successful at a time when the worst drop in GDP is predicted since the Civil War, when the country was in ruins. In all respects, the government-mandated transaction for companies is much like the one launched in 2012 by Bankia. Then, to guarantee that the bank was even closer to total bankruptcy, large Spanish businessmen were invited to buy Bankia shares to secure their exit.

What the ARA may have known is that the government movement was not successful. Some companies did better than others, and some consulted with the National Securities Market Commission to find out if the public debt buying operation was well viewed by the regulator. A spokesman for the ARA contacted the agency, saying they did not know if the consultation was being made, but said that such requests were confidential. Other companies have already stepped away from the operation, especially in a crisis context that is ill-advised to allocate resources to anything other than survival. “It was impossible for them to get good at it, many are really playing it,” says one manager who knew the move.

One week after the Moncloa movement, the petition was dead. By April 2 and 3 it was already known that there would be no broadcast with the support of large companies. During the previous days the debate by international experts was centered on the need for the European Central Bank (ECB) to secure cheap borrowing from EU member countries, and, despite initial doubts, this was the case. At the end of March, the ECB announced that it would relax its own debt-buying regulations and help more needy states. And, in fact, the broadcasts the government has made since the outbreak of the pandemic have been saved without complications. However, the price is appreciated: at the beginning of March the risk premium was 91 basis points and it is currently approaching 130. The fateful 2012 reached 650 points.

However, the talks between the central government and companies were successful. Once it was clear that companies would not buy public debt, Sánchez’s executive asked them to avoid ERTOs as much as possible. The petition responded to the desire to preserve the country’s image and the impact on the citizens of seeing the great economic symbols temporarily firing thousands of workers, and also on the example this could mean for small businesses.

A particular request

It is impossible to know the extent to which this may have influenced the decisions of the large companies of the Ibex-35, but the fact is that the temporary files are practically non-existent among these companies. Spain’s most valuable company, Inditex, has so far ruled out making an ERTO, which the same company announced had to affect 25,000 employees of the 1,500 remaining stores: the Galician giant will eventually assume all of its salaries. The second company to capitalize on the stock, the Basque Iberdrola, has also not applied, as did Endesa or Repsol. Banco Santander, the third most valuable company but historically perhaps the most influential, not only did not make an ERTO but also made a statement showing its commitment to employment. Naturgy, the first Catalan billing company, has not applied temporary files either. And, following the big Catalan companies, neither CaixaBank nor Banco Sabadell have done so, despite the fact that in recent weeks the two banks have severely reduced their branch network as a result of the pandemic.

Telefonica, one of the companies that have done the most to be a haystack for the Spain Brand and fifth for the capitalization of the Ibex-35, has also not implemented this measure of temporarily firing workers. BBVA, the second largest bank in Spain in value and second in Catalonia in implementation, has not resorted to ERTOs. And the same can be said of ACS, despite the impact of the state of emergency on construction.

The government’s failed attempt to involve companies in their financing and the subsequent request not to make ERTOs shows the close relationship between the central executive and the main Spanish companies, which in the current crisis have not shied away from having a well active role. On April 10, in the midst of a debate between governments, employers and unions about returning to non-essential job activity, Ana Botín, chair of the Santander, publicly requested that her return to work be planned as soon as possible. “For the youngest and those who are already immunized.” He claimed it the day before Pedro Sánchez confirmed what his government had already advanced: that on Monday, the 13th, or the next day in the case of holiday communities, non-essential employees would have to return to work.


The Spanish risk premium closed on Friday at 127 basis points, when it was 91 at the beginning of March, an increase of 39%. The indicator represents the surcharge over Germany that Spain has for itself. Although sources from the Ministry of Economy say that the debt issues that have been made since the outbreak of the pandemic have been successfully closed, it is already expensive. However, it must be remembered that the fateful risk premium in 2012 reached 650 basis points.


Inditex has closed the 1,500 stores of its brands in Spain. However, he has avoided doing any ERTO, although the group presiding over Pablo Isla went so far as to assume that it would apply a temporary suspension to the 25,000 workers it has in its stores throughout the state.


The shopping basket goes from beer to fruit

Everyday shopping has been one of the central elements in the lives of citizens since the covid-19 pandemic arrived in Spain, and especially since its declaration of alarm on March 13. According to studies, shopping lists have been changing over the course of weeks of confinement, from an early stage in which health care products (disinfectants and medicines) flew off supermarket and drugstore shelves. current, more based on the massive purchase of food products.

Consumer consultancy Nielsen says in a study that from the first cases of covid-19 to the return to a certain normal society, the shopping basket will go through several stages. The first, when the epidemic is still in its infancy, is an increase in purchases of products related to health and wellness. The second, on the other hand, occurs when the pandemic is already declared and is increasing the acquisition of preventive products, such as face masks, disinfectant gels and medicines such as paracetamol.

But in terms of food and everyday products, the study points out that there is no increase in purchasing until a later stage, when the population interviews that the government will take emergency measures. That is, in the days before the obligation to confine yourself at home. It was during this phase that the famous shortage of toilet paper came about, a phenomenon that has been repeated in many countries. Shoppers are clutching food for fear of having a shortage of food.

And even though no supermarket chain was missing, the hoarding did the same. The Ministry of Agriculture saw a 29% increase in food purchases between March 9 and 15, which has been moderating in the following weeks. This is in line with Nielsen’s study, which states that after a few days of compulsive shopping, consumption normalizes and online shopping becomes stronger.

Among the star products of the confinement, at least in the early stages, were all kinds of snacks, soft drinks and beers. That is, typical foods to spend the day at home watching television or for a family snack.

The turn of late March

The Ministry of Agriculture, in fact, found this. During the week from March 16 to 22, chocolate purchases increased by 33% and nuts increased by 15%. On the other hand, the sale of flour – an essential product for making homemade bread and cakes – grew by 196% and alcoholic beverages also increased by 58%. However, this trend has been reversing over the days. The following week, March 23-29, sales of products like potato chips (23%) continued to increase, but fruit purchases have already rebounded, which hit its roof in the last week of March, to where the data published by the ministry are coming.

This change in trend, then, is in the same vein as Nielsen’s study, which points out that as confinement becomes a daily reality and it is no longer seen as a purely temporary newcomer, citizens are opting for healthier shopping. and fresh produce to compensate for the lack of physical exercise. This trend will continue, according to the study, in the weeks following the end of the confinements, when the memory of the pandemic is still very recent.


The minimum emergency rent may be ready by May

“We must guarantee the income for all those affected by the crisis and we must do it for as long as it lasts. The health crisis is temporary but we do not know how many months it will last. The protection scheme is broad and the effect is emerging. ” These are the words of the Social Security Minister, José Luis Escrivá, who said yesterday that the central government is working to protect the earnings of 6.3 million workers and 30% of the self-employed, and considers that the measures of Approved protection is enough to alleviate the effects of coronavirus. Measures to achieve this include the minimum living income, an income for lower-income families to reduce the poverty rate.

Escrivá disassociates income from the coronavirus crisis, though he believes it is now time to start up. In fact, it could be ready in a matter of “weeks,” according to the Social Security insider. Sources close to the Vice President of Social Rights, Pablo Iglesias, said that it would be launched in May and that it could be presented publicly tomorrow. According to the same sources, this has been agreed between Iglesias and Pedro Sánchez after Escrivá rejected a minimum living income bridge to start up immediately.

This all came on the same day as the number of workers affected by temporary employment regulation files (ERTO), which is now four million, 16% of the active population, was finally made public. After weeks hiding the figure, Escrivá made it public to Congress yesterday: “There are now more than three million and there may be four.” During the control session in the lower house, the president of the Spanish government, Pedro Sánchez, pointed to the number of 3.9 million workers affected. Until now, the executive had provided only the data of those affected by ERTOs that had already been processed – a much lower figure – claiming that not all the autonomous communities provided the information.

According to Escrivá, more than 50% of the files are already processed and companies have already been exonerated from paying their employees’ Social Security contributions. In the face of allegations of the collapse of the Public Employment Service, the Minister of Social Security said that an “extraordinary effort” was being made to process all the files as soon as possible.

The minister also said that from March 12 until yesterday, 900,000 jobs had been permanently lost in Spain, but that the situation is stabilizing and even membership is growing in April. In fact, a third of affiliations were lost in the first 10 or 12 days, with subsequent declines being milder. In the first weeks of April, the balance between low and high is positive, with 42,000 new affiliations in the last two days. There are eight provinces where membership has grown in April, including Tarragona and the Balearic Islands. Persons affected by ERTOs are not counted as unemployed or as destroyed employment because they have their contracts suspended temporarily.

Protected freelancers

As for the self-employed, despite the criticism of the group, Escrivá argued that they are well protected and numbered 950,000 the number of those who applied for the cessation of activity benefit, which was granted in a 97% of cases and will be paid this Friday.

The Generalitat will not raise taxes
The Generalitat yesterday ruled out an increase in taxes to cover the extraordinary measures and expenses caused by the covid-19 crisis.

“This is not the time to increase taxes or punish the citizenry fiscally speaking,” said Meritxell Budó, a counselor for the Presidency and a spokeswoman for the Generalitat, at a telematic press conference. The government is confident that the 2020 budgets will be approved on April 24, with a view to turning them into a “shock plan” against the coronavirus crisis.

The agreement with the commons is based on six tax changes, but covid-19 has changed the economic and social scene, so the executive believes that the accounts will need to be changed again after they are approved.


Cellnex buys Portuguese mobile operator NOS Towering for 375 million

Cellnex has reached an agreement to buy 100% of the Portuguese mobile operator NOS Towering for 375 million euros and an additional investment commitment of up to 175 million. It is the second operation of the company in Portugal, after the same year of purchase from the operator Omtel. According to the Catalan company, the transaction involves about 2,000 locations, with telecommunication towers and rooftop antennas, located in urban (40%), suburban and rural (60%) areas across the country.

The operation, which will be funded by Cellnex’s cash (without debt), includes an investment commitment of up to 175 million to expand the perimeter with 400 new sites, with new tower construction programs and other agreed initiatives. to run for the next six years. In addition, Cellnex and NOS have signed an initial contract of 15 years, extendable to successive periods of additional 15 years, by which the Portuguese operator will continue to use the locations that Cellnex will operate. After completing the integration of these assets and the deployment of new sites, it is estimated that the result before the amortization and additional taxes (ebitda) generated by the group will reach 50 million euros.

With this transaction, Cellnex’s already contracted future sales will grow by € 2 billion, reaching € 46 billion. The closing of the operation is subject to the approval of the regulatory and administrative authorities. Cellnex’s CEO Tobías Martínez emphasized the company’s ability to close new agreements “even in a particularly complex and sensitive scenario like the one we are living in”, in reference to the coronavirus crisis.


“Crisis can strengthen monopolies”

Covid-19 has reversed most of the business dynamics, as well as competition. The Catalan Competition Authority is the government body responsible for preventing distortions such as price increases for certain products. From his home in a video call, his CEO, Marc Realp, tells of the abuses that have already been observed and what may happen later.

How can competition be guarded against a pandemic?

It’s complicated. The current situation is with multisectoral market tensions. We must have our eyes everywhere. That is why we constantly ask consumers and operators to contact us with any queries or practices they may consider to be unfair. We have an anonymous collaboration channel. For example, if you are a retailer who wants to report a dealer’s price.

What anomalies have you noticed?

There are different sectors and casuistry. In general, we are facing an unprecedented health and economic crisis, which in certain sectors or products has led to a substantial increase in demand or, conversely, a reduction in supply. This entails a waste of products and an increase in prices due to the same market dynamics. There is a mismatch between supply and demand that must be balanced in some way.

For example the sanitary material?

That worries us. Masks, disinfectant gels, respirators … These are products of which there is clearly a lack of supply and complaints from many consumers about the exorbitant price increase. We need to see if they are specific cases of a particular establishment or a market dynamics. What the pharmaceutical industry has told us is that stores are not applying this increase and, therefore, if it comes from the supplier.

Should prices be limited?

We have to see if in masks or this type of product it might be easier to reduce the requirements and establish a type for sanitary use and basic requirements for daily street use. There have been manufacturers who have been quick to make it. By adjusting the current regulation and lowering the barriers to entry, we can encourage supply to avoid mismatch. With masks, if we limit the price it could be counterproductive if those who sell them to us in China find someone else who can sell them at a higher price. The only way to counteract this effect is by producing them yourself. It is important that the authorities analyze the regulation to allow more innovation to enter the productive fabric. Traditionally, these are very regulated sectors controlled by a few operators and it may be time to reduce them, obviously while maintaining the quality and safety criteria.

At the moment the State has limited the price of the funeral services.

In this case, we have seen that intervention can be justified. Another sector that we will have to look at soon is the banking sector. Like funeral homes, there is now much demand for loans and the supply is what it is. It is a regulated sector and we are concerned about the behavior of the banking industry. In this area and in others it must be ensured that the economic conditions can be coordinated. We have some hints in some sectors that may be happening, because it is suspected that the cancellation conditions, for example, are the same.

Will this crisis help strengthen certain monopolies?

This is likely because it is not an economic crisis but a health crisis. There are businesses that even being solvent can disappear. Small SMEs and companies, while economically viable, can be absorbed by larger companies because they have no liquidity. From the point of view of competition, we are concerned because we want the markets not to concentrate and, if they do, for economic efficiency, not for lack of liquidity. One consequence may be the increase in concentration in some sectors.

Amazon is considered an essential service, but much of the small business has had to close.

Here it is true that there has been an imbalance. The physical space is closed and not the online one, and we have to see if they are competing on equal terms. It should also be noted if there has been a consolidating change in consumer behavior.