Andreu Mas-Colell, former Harvard Professor and the current Catalan Finance Minister, travelled to London to meet with financial representatives. The objective is to explain, first-hand, the Catalan Government’s austerity plans and its efforts to reduce the deficit and to foster the economic recovery. Mas-Colell met with City investors, banks and media, such as the ‘Financial Times’.
As carried out on two other occasions in the last year, the Catalan Government is preparing to release of 3,800 retail bonds to get cash. Financial sources informed ACN about the operation, which has not been confirmed by the Catalan Ministry of Economy. The bonds would be offered before November 21st, the day that the bonds issued by the former Catalan Government in autumn 2010 expire.
The Spanish Government temporary reduces the VAT on new flat’s purchase, asks the largest and profitable companies to advance money from their corporate tax, and obliges doctors to prescribe generic drugs and not brands. With all those measures, the Spanish Government expects to get 4,900 million extra euros until the end of the year.
French farmers have been protesting against their difficulties by destroying fruit and vegetables from Spain once they entered France to supply European markets. After last weeks angriness and frustration, Catalan farmers decide to answer back by offering, for one hour, their apples and pears for free to all the cars coming from France and explaining in four different languages the reason for their action.
The president of the United States called on Monday evening, the Spanish Prime Minister to discuss the world economic situation, focusing on two main themes, the evolution of debt problems in Europe and the United States, and the growth of world economy.
The Catalan Parliament was under siege by the “indignats” protesters, who have been camping on Catalunya Square for the last month. They tried to impede MPs' access to the park where the Parliament is located. Some MPs arrived on foot and were insulted, pushed or sprayed. Others, including the Catalan President and the Parliament’s President, had to arrive via helicopter or inside police vans. The ‘indignats’ movement condemned “the isolated violent episodes”, but said they have the right to block the Parliament. Today the first voting on the budget was held, which reduces public spending by 10%. Despite the protests, the parliamentary debate took place.
After the presentation of the Catalan Government’s budget proposal at the Catalan Parliament, opposition parties criticised its content and the lack of debate on the subject. The Catalan Government needs support from opposition MPs or at least their abstention to approve the budget, which foresees a 2.66% deficit for 2011. The Spanish Vice President for Economy Elena Salgado insists that the mechanisms of deficit control “will be strictly implemented”.
The Catalan Finance Minister presented the Catalan Government’s budget for 2011, which totals 39,354 million euros. For the first time, the budget will see a decrease in comparison to the previous year. Public expenditure is reduced by 10%, brought to 2007 levels. The public deficit is also reduced, but only to 2.66%. The Catalan Minister states that if the Spanish Government wants Catalonia to reach the 1.3% objective, it needs to show institutional loyalty and transfer the money due for 2011 instead of delaying it and calculating smaller amounts.
The study is funded by Catalan savings bank ‘la Caixa’ with data at Spanish-level. It reveals, contrary to xenophobic statements that immigrants bring more revenue to the state than the costs they generate. In addition, their presence also brings more services. “We came to the conclusion than the impact of immigration in the Welfare State is clearly positive”, states the coordinator of the study.
This initiative offers free food to people in need and it is a platform involving many organisations. The Food Bank already assists 118,000 people in the Barcelona Metropolitan Area and warns that “the figure is growing”.
Kenneth Rogoff, currently professor at Harvard, predicts that Spain has a “high chance” of being rescued by the European Union. He also ads that, if it were not rescued, even France could fall.
The board of the Catalan savings bank decided to “temporarily” use public capital in order to meet the new requirements in the sector. This move means it will reach 10.4% of ‘core capital’. Private capital is expected to increase its share “in the medium-term”.
Catalan political parties will meet with social and economic agents to discuss how best to boost the Catalan economy. The Advisory Council is made up of academic experts and members of the business community. They drafted the report as a basis for discussion. Among many measures, they recommend partially paying for extra public services or reducing the number of public employees.
Compared to 2009, real estate sales increased by 21.4% in Catalonia. The Catalan market’s activity triples the Spanish average. However, forecasts for 2011 are no so optimistic due to the VAT increase and the end of the fiscal deduction for purchasing houses and flats.
The total number of unemployed people in Catalonia is now 589,623. In Spain as a whole, registered unemployment increased by 130,930 people this January. The total number of unemployed people sets a new historical record, with 4.23 million. Traditionally, January is a bad month in terms of unemployment data due to the end of Christmas sales’ hirings.