catalan economy

The Catalan economy is more open than ever and attracts record levels of foreign investment, according to new data published on Thursday by the Catalan Minister for Business and Jobs, Felip Puig. The minister celebrated the fact that for the second year in a row, the prestigious ‘Financial Times’ newspaper ranked Catalonia first region in continental Europe in foreign investment and job creation. Catalonia attracted up to 91 new business projects with an estimated investment of almost 3,000 million dollars (around 2,257 million euros) and the creation of 7,427 jobs. Gross foreign investment figures from the Spanish government put the figure at 3,500 million euros. Exports in 2013 were at record levels, and generated 58,359 million euros. There are now more than 49,000 companies selling abroad in Catalonia, a 6.8% increase in comparison to 2012.

The Barcelona-based bank, which was totally nationalised in December 2012 and received a €9.08 billion bailout, has made profits of €532.2 million in 2013, which would represent €167.8 million without the extraordinary profits. In 2012, CatalunyaCaixa posted losses of €11.86 billion. In 2013, the operational costs were reduced by 13.1%, having drastically reduced the number of employees and branches. The bank's capital ratio is now 14.36% and the main capital following Basel III criteria reached 12.3%, which represents liquidity of €15.01 billion. With these figures, the Spanish Government is in a better position to sell CatalunyaCaixa, which forecasts profits also for 2014. This company was the result of merging the banking business of 3 savings banks in 2011: Caixa Catalunya, Caixa Tarragona and Caixa Manresa, which disappeared after a long tradition of social work. The operation was part of Spain's restructuring of the banking sector.

In Catalonia, direct foreign investment – excluding the stock-exchange –grew by 31.5% year-on-year to reach €3.51 billion in 2013, as indicated by a report from the Spanish Ministry of Economy and Competitiveness. According to the Foreign Investments Registry, with such a figure, Catalonia achieved its second best year in history, only surpassed by the €4.82 billion received in 2010. Besides, Catalonia accounted for 22.2% of all foreign investments in Spain in 2013, which amounted to a total of €15.81 billion, meaning 8.8% more than the previous year. The region of Madrid was the leading Autonomous Community in Spain for foreign investment attraction, receiving €8.64 billion, which is it to say 54.6% of the total amount. However Madrid's sum also represents a 7.1% decrease on 2012 figures.

On Wednesday evening the main Catalan small- and medium-sized enterprises association, Pimec, organised a protest conference in which they accused the Spanish and Catalan Governments of politically and financially "discriminating" against them. With the slogan #diguemprou (#wesayenough) 1,400 owners of SMEs and self-employed workers protested against both Governments for not taking SMEs into account and only working for the interests of large corporations. The protest was explicitly backed by 220 guilds and associations, as well as by 9 professional associations and that of self-employed workers. The event issued a manifesto compiling a list of grievances, split into 7 different areas: entrepreneurship; loans and funding; taxation; labour market; energy; training and employment; and internationalisation.

Catalonia is the only Autonomous Community in Spain to have registered a decrease in wages, as it was also the only one to have public employees' Christmas payment – equivalent to a month’s salary – entirely eliminated in 2013, according to the latest Quarterly Labour Cost Survey issued by the Spanish Government. Hence, while Spanish wages have increased by 2.1% in 2013, the wages of Catalan employees have continued on a downward trend continued o, falling by 0.7% at the end of December 2013 compared to the last quarter of 2012. The average salary in Catalonia stood at €2,133 per month, returning to 2009 levels, when it had amounted to €2,119. Labour costs, which group the employee salary and social costs assumed by companies, have also fallen by 0.4% in annual terms in Catalonia whereas they were up by 2.1% in Spain.

Greater Barcelona-based car manufacturer Seat has hired 450 new workers to cover an expected increase in production. The new employees will join the workforce at the Martorell factory to aid the production of two of its most popular car models, the Ibiza and the Leon. Seat also announced an increase in overall production during a strong performance in 2013, which saw its highest production rates for 5 years. Besides, the Japanese Nissan recently extended the contract to 308 temporary workers and hired additional 20 people in its Barcelona factory. Last November, Nissan launched a shorter night shift to produce the Primastar X83 van, which was extended in February in order to increase production.

The largest employer’s association in Catalonia, Foment del Treball, expects that the economic recovery in both Catalonia and the whole of Spain will not lead to a growth in employment and consumption until late 2014 or early 2015, as explained in the Report on the Economic Situation published on Thursday. The Director of Foment’s Economics and Taxation Department, Salvador Guillermo, said in a press conference that the economic recovery is being “consolidated”. Nevertheless, he added that ongoing structural reforms in the energy sector, public administration or the financial system should continue. According to Guillermo, the reduction of public deficit must be slowed down in order to avoid any negative impact on the economic recovery. 

The Government of Extremadura, a region bordering Portugal, presented a study comparing its contributions to the rest of Spain with those of the other Autonomous Communities, particularly focusing on Catalonia. The main thrust of the report was that Catalonia receives the highest amount of money from the Spanish Government, which goes against absolutely all the previous studies that have established that Catalan taxes fund services, investments and infrastructure in the rest of Spain. The Catalan Finance Minister, Andreu Mas-Colell, characterised “the political document” presented by Extremadura’s Government as a “complete nonsense”. Mas-Colell, who was Professor of Economics at Berkley and Harvard from 1972 to 1995, said that the report lacked rigour and was not a technical work. The next day Extremadura’s President, José Antonio Monago, stated that Catalonia is “a privileged territory” and questioned whether it could repay its debt.

In February, 629,586 people were enrolled on the unemployment lists in Catalonia, representing a decrease of 4,285 unemployed people on the same month last year, according to figures released on Tuesday by the Spanish Employment and Social Security Ministry. It is also the sharpest decline for a month of February since 2004, when 5,138 fewer jobseekers were registered. With this latest drop in the unemployment figures, Catalonia has achieved eight consecutive months of registered unemployment reduction in annual terms. In the whole of Spain, unemployment stood at 4,812,486 people, down by 1,949 people in February. It is the first decrease for the month of February since the beginning of the crisis in 2007.

The ‘Allure of the Seas’, which is currently the largest cruise ship in the world, will operate from 2015 onwards from the Port of Barcelona. Next year, it will offer 25 different routes from or to the Catalan capital. For each trip, the ‘Allure of the Seas’, which belongs to Royal Caribbean, welcomes 6,318 passengers on board. Due to the considerable size of the boat - 361 meters long - passengers will access and exit the facilities through two terminals of Barcelona’s Harbour. Royal Caribbean stated that the 158,000 passengers expected to travel on all 25 routes will bring €17.5 million to Barcelona’s local economy each year. It will be the first time the ‘Allure of the Seas’, which currently operates in the Caribbean, will drop anchor in a European harbour.

The Catalan Minister for the Presidency and Spokesperson for the Executive, Francesc Homs, warned that “if a political solution cannot be reached” to keep Catalonia within the EU if it becomes independent from Spain, it would be “the end of Europe as a model for democratic and peaceful integration of the different peoples that form it”. On Monday, in a debate on ‘Catalonia’s political process’ held at the University of Lisbon’s Faculty of Law, Homs highlighted the fact that if EU Treaties had been interpreted “literally”, the financial bailouts for Spain, Portugal, Ireland and Greece would not have been possible. However, in this case, the EU reacted “with common sense” and for “the general interest”. Therefore, “since the EU is a project of peace and democracy, a political solution [for Catalonia] will be found, as the EU has ever done in all situations”, he stated.

The Catalan Minister for the Economy and Knowledge, Andreu Mas-Colell, emphatically stated that if it is “neat, the conflict between Catalonia and Spain will not affect the economy” nor business activity. In front of about 250 employers who were invited at a luncheon organised by Barcelona’s Chamber of Commerce, Mas-Colell explained that “Catalonia had emerged stronger” from the economic crisis. The former Economics Professor in Harvard and Berkley also emphasised that the Catalan Government “will not do anything that may leave [Catalans] out of Europe”, thereby sending “reassuring” messages to business-owners. In his speech, the Finance Minister also defended the ongoing self-determination process, describing it as an attempt to respond to the Spanish Government’s centralist policy which is looking to “laminate” Catalonia’s Autonomy “using the crisis as an excuse”.

The President of the Catalan Government, Artur Mas, has called on employers “to work together” on 3 objectives: lifting the economy, ensuring social cohesion through Welfare State public policies and driving forward the political process on Catalonia’s future. On Friday, Mas addressed over a hundred major employers in Catalonia at the Tower Sabadell, during the presentation of the book Capitans d'indústria (which would read as ‘Captains of industry’), written by journalist Francesc Canosa and Farran. During the event, the President of Banc Sabadell, Josep Oliu, called for a “stable political environment” and “peace of mind” so that employers could “focus” all of their energy on their businesses.

The President of Barcelona Chamber of Commerce, Miquel Valls, stated on Thursday that the independence process was not affecting Catalonia’s economic recovery. During a press conference, Valls emphasised that such a statement was based on concrete “facts”. He stressed that Catalonia had tripled the amount of incoming foreign investment compared to the Spanish average, and that the Catalan economy had also registered better figures in enterprise creation and business confidence, employment and other indicators showing an economic recovery According to the report on conjecture and economic perspectives, the Catalan GDP grew by 0.7% during the fourth quarter of 2013, whereas the Spanish GDP dropped by 0.1%. Valls also recalled that the consultation vote on the political future of Catalonia would involve “citizens and not businesses”, thus responding to the employers who recently voiced their opposition to Catalonia’s independence.

Housing sales in Catalonia have reached 45,064 units in 2013, representing a 4.8% increase on the previous year, according to data published on Wednesday by the Spanish Statistics Institute (INE). Such figures are the highest since 2010, when 55,857 transactions were registered. Besides, in monthly terms, in December 2013, there were 3,014home sales in Catalonia, amounting to a 2.6% increase on the same month last year. At Spanish level, residential property transactions dropped to 311,414 in 2013, meaning a 2.2% decrease. The December figures reveal a similar trend, with the number of sales falling to 22,723 units in the entire country, a 3.6% decrease compared to the same month last year.