The Spanish public sector is making efforts to save around 200,000 jobs in the face of the government's spending cuts (read article in Castilian here, El Periodico). The trickle of 'expedientes de regulación de empleo' (ERE)—by which companies put in place temporary measures (such as fewer working hours, reduced salaries or suspension of contracts) as a way of avoiding mass redundancies–seen so far in hospitals and suppliers to the government could be just the start of the negative effects felt in the sector as a result of the spending limitations. The magnitude of proposed changes to personnel numbers is causing alarm not only to trade unions, but also the companies affected and employers' associations (patronales). Cuts by the Spanish administration could put 200,000 jobs at risk, according to the Catalan employers' association, Cecot, which is advising some companies already affected by the reduced spending plan. In Catalunya, it is estimated that around 15,000 jobs could disappear as a result of budget cuts by the Generalitat and the Spanish government, if measures are not put in place now, according to David Garrofé, secretary-general of Cecot.
The property industry, which has been so negatively affected by the economic crisis, is continuing to seek financial assistance to help deal with the consequences of the crisis (read article in Catalan here, Avui). The latest request of the so-called G-14 lobby, a group of 14 of the biggest real estate companies, is for tax changes that would ease the merger or acquisition of companies in this sector, as a way to strengthen those new businesses that would be created from such a move. Specifically, the group wants to see the end of the tax on transfer of patrimony (transmissió de patrimonials) and documented legal acts (actes jurídics documentats); these taxes are managed by the autonomous communities, which take seven percent of the value of these types of transaction in tax. The G-14 has noted that such mergers and acquisitions are not subject to these taxes in other sectors; it also claims that the taxes make these kinds of undertakings impossibly expensive to contemplate and if they hadn't been in place, the sector would have suffered less as a result of the collapse of the housing bubble in Spain.
In the face of market jitters about the Italian economy, Spanish debt has this morning reached its highest-ever rate (read article in Castilian here, La Vanguardia). The 'risk premium' that investors are offering on Spanish 10-year bonds with respect to the German equivalent (the standard measure for establishing the value of these bonds and evaluating the health of the wider economy) rose sharply this morning when markets opened. The premium on Spanish bonds broke through the psychological barrier of 300 points to hit a high of 311. Investors are feeling uncertain about the extent of the crisis regarding sovereign debt in certain European countries, including Italy's, whose premium also hit historically high levels at 271 points. Greece, Ireland and Portugal, which have all received bail-out money from the EU, all have risk premiums on their bonds of more than 1,000 points.