crisis

The President of the Left-Wing Catalan Independence Party ERC, Oriol Junqueras, has explained his own road map to allow citizens to vote on independence from Spain and build a new state. Junqueras proposed running in immediate early elections through different pro-independence lists with shared elements and opened to independents, in order to respect diversity. The ERC leader differed from the proposal of running through a single electoral list made by the President of the Catalan Government and leader of the centre-right pro-Catalan State coalition CiU, Artur Mas. Junqueras insisted on the need to answer to the social and economic concerns of many citizens in addition to those about independence. Should they altogether obtain a majority, the different pro-independence candidatures should form a national unity government and start building the new state from day one. He particularly emphasised the need to include those who did not voted for independence in the constituent process, which should be finally ratified in a referendum.

According to official data released by the Catalan Ministry of Economics and the Statistical Institute of Catalonia (Idescat), the Catalan economy grew by 0.5% between and July and September 2014, the latest in six consecutive quarters of positive economic growth. A signal that the recession is far left behind. The whole of Spain also grew by 0.5% in the same 3 months. In annual terms, Catalonia's GDP has grown by 1.8%, mainly thanks to the boost by the services sector,which has demonstrated an annual growth of 2.4%. The sector of industry grew by 1.5% and those of construction and agriculture decreased by -2.6% and -1% respectively. Idescat’s previous predictions for 2014 quarters has been reviewed: the 0.5% initially estimated for the first quarter increased to 0.7%, while the 0.6% for the second quarter dropped to 0.5%.

Figures released by the Barcelona Chamber of Commerce on Monday showed that the economy of Catalonia is set to grow by 1.6% in 2014 and 2.1% in 2015. The Chamber also predicted that by 2015, there will be a 2% rise in Spain’s GDP and 1.4% in that of the Eurozone countries average. According to the President of the Chamber, Miquel Valls, the recovery of Catalan and Spanish economies is "solid", but he stressed that the "austerity in wages" must be maintained. This report comes after the success of all Catalan banks passing the stress tests issued by the European Banking Authority and the European Central Bank, which 25 banks across Europe failed. Related economic news is that the unemployment figures released for third quarter of 2014 set Catalonia’s rate at 19.1% and Spain’s at 23.67%.

The Catalan banking system boasts a strong image after the publication on Sunday of the 2014 EU-wide stress test results, issued by the European Banking Authority (EBA). All the financial entities based in Catalonia have sailed through the EBA stress test, showing they could face the most adverse economic developments with only their own resources. In the most difficult scenario, Barcelona-based CaixaBank – which is the largest bank in the Spanish market – reached a 9.3% equity ratio (CET1), Banc Sabadell got an 8.3% and Catalunya Banc an 8%. The minimum required was 5.5%, which was not reached by 24 of the 123 European banks analysed. Only one Spanish entity, Madrid-based Liberbank, would need additional capital in the worst case scenario.

The left-wing independence party ERC asked the Catalan President to join the Government "in order to protect the [self-determination] consultation vote" scheduled on the 9^th of November. The Catalan President, Artur Mas, stated that they will talk about it in the coming days to strengthen the unity around November's vote. In addition, the Catalan Socialist party (PSC) also asked Mas to talk to them if the Constitutional Court ultimately bans the consultation vote. The People's Party (PP), which runs the Spanish Government, accused Mas of promoting "a soft dictatorship" in Catalonia. The green-socialist and post-communist coalition ICV stated they want a consultation vote with "credibility". The Spanish nationalist and populist C's said that Mas' time is finished and asked for early elections. Finally, the alternative left and radical independence party CUP advocated ignoring Spain's institutions and voting on the 9^th of November by any means.

The real estate market has stopped its downward trend and has started its recovery in Spain. Housing prices already registered an increase in September of 2013 in quarterly terms, but now the prices grew for the first time in annual terms, a phenomenon not registered for the last 6 years. By the end of June 2014, prices grew by 0.97% compared to June 2013. In quarterly terms, housing prices increased by 1.53% compared to March 2014. Since the start of the economic crisis in 2008, housing prices have plummeted an average of 32% throughout Spain, with prices equivalent to those registered in 2003. In the second quarter of 2014, Catalonia was the Autonomous Community with the second highest number of housing sales, registering 11,980 operations.

The Catalan economy grew by 1.3% from July 2013 to June 2014. However, the economic recovery has particularly sped up and got stronger over the second quarter of 2014, when it grew by 0.6% in quarterly terms, according to data released on Wednesday by the Catalan Statistics Institute (Idescat) and the Catalan Finance Ministry. The GDP growth between April and June was higher than the one registered during the first quarter of the year, set at 0.4%. With the 0.6% registered at the end of June, Catalonia has achieved 5 consecutive quarters of posting positive figures, leaving the recession more than a year behind. Regarding economic sectors, services have led the economic recovery, posting a 1.8% annual growth at the end of the first half of 2014.

BBVA will pay €1.187 billion to the Fund for Orderly Bank Restructuring (FROB) for the nationalised Catalan bank, beating the other two offers in the final phase of the auction process presented by Santander and Barcelona-based CaixaBank. This means that Spanish taxpayers will lose €11.84 billion considering guarantees and due to the fact that the Spanish Government injected €12.622 billion into Catalunya Banc since it was nationalised in 2011. Catalunya Banc was a private bank owned by CatalunyaCaixa, the merger of three historical Catalan savings banks (Catalunya, Tarragona and Manresa). It could not face the deep restructuring process required to meet the new banking regulations. The bank had a weak financial position resulting from a high exposition to toxic real estate and mortgages assets, as well as suffering from poor management. The BBVA will become the second largest bank operating in Catalonia, doubling its past position.

CatalunyaCaixa (CX) on Thursday confirmed the sale of its portfolio of high risk loans to US investment company Blackstone, consisting mainly of mortgages with a nominal value of €6.392 billion and provisions of €2.205 billion. The transaction involved the transfer of funds to a portfolio of asset-backed securities for an amount equal to its book value, €4.187 billion, with €3.615 billion supplied by Blackstone and Spain's public Fund for Orderly Bank Restructuring (FROB) providing the remaining 572 million. With this divestment, the CX solvency ratio stood at 14.9% and coverage stands at 81.6%. After this sale, the liquid assets of CX will reach €16.848 billion and the company is now ready to face its full privatisation, after it was nationalised in 2012.  In addition, Blackstone had already bought CX's real estate business in June in a €40 million operation.

The Catalan Government approved on Tuesday a measure to impose a tax on empty flats owned by financial institutions. The aim of the tax is to incentivise banks to rent out the empty homes. Santi Vila, the Catalan Minister for Planning and Sustainability, said that the "mere announcement" of the tax has already caused Sareb [Spain's public 'bad bank'], Catalunya Caixa and Bankia to yield to the Government 1,230 apartments for social rent. During the press conference after the weekly Cabinet meeting, Vila pointed out that the new tax will not apply to individuals and will only be intended for flats that have been taken out of the market for more than two years. The Minister also said that the measure is not simply about "tax collection" but is instead to ease the access to housing market in the midst of a housing crisis.

''The recovery has come and has come to stay,'' according to Salvador Guillermo, Director of the Economy of Catalonia's main association of business-owners, Foment del Treball. Guillermo, who coordinated the report published on Tuesday, said that the analysis of economic data confirms that the positive trends have been occurring a month earlier in Catalonia than in the rest of Spain, "which means that recovery is more entrenched'' in Catalonia. The agents of this recovery are internal demand (consumption and investment) and the fast pace of exports in Catalonia.

Throughout this week the Fira de Barcelona's Montjuic exhibition venue in the Catalan capital is transformed into a business fair for start-ups and entrepreneurs. The BizBarcelona event takes place on Wednesday the 4^th and Thursday the 5^th of June and is the second edition of this innovative business fair. The event serves several purposes and contains as many as six different areas including e-commerce, the financial markets, exports, franchises, business consulting as well as cooperation and networking. The event offers various opportunities for established and future entrepreneurs. BizBarcelona is a welcome initiative. First quarter financial reports revealed a decrease in bankruptcy proceedings, and with a high unemployment rate in Catalonia and Spain it is hoped that these new companies can create jobs.

The Catalan economy grew by 0.4% in the first quarter of 2014, which means that GDP has been increasing for the last 4 consecutive quarters, leaving recession far behind, according to an early estimate published on Monday by Catalonia’s Statistics Institute (Idescat) and the Catalan Ministry of the Economy and Knowledge. Furthermore, between March 2013 and March 2014, Catalonia’s economy grew by 0.8%. In the second quarter of 2013 it registered a quarterly growth of 0.1%; in the third it also posted a 0.1% quarterly growth; between October and December, it increased by 0,2%; and now, between January and March, it grew by 0.4%. The services sector has been the main engine behind this positive trend; in the last 12 months it grew by 1.4%.

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.

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.