Spanish Risk Premium back close to 400 basic points

The Spanish Risk Premium is back close to the 400 basic points today as European markets have fallen again as Moody's warns that they intend to reclassify the EU debt. Moody's says there was a lack of agreements at the European summit in Brussels last Friday.

The Italian stock market led the falls today and the IBEX 35 was down by nearly 3% in lunchtime trading. However the Italians managed to place 7 billion € of debt today. Demand was up at almost twice over subscribed, albeit at an interest of nearly 6%. The Italian Risk Premium is close to 450 basic points.

New President, Mario Monti is however facing his first General Strike. The main unions called for three hours stoppages today against the cuts and that is just the first of a series of actions planned for the week. The increased time contributing to pensions and the delaying of the retirement age are the most conflictive parts of the reforms in Italy.

The President of the European Council, Herman Van Rompuy has said that he wants to agree a pact before the stock markets open on Friday regarding the 26 remaining EU countries. He has criticized David Cameron for not presenting his petition in writing at the start of last weekend's meeting, and blamed people being in a hurry for what happened, saying that there was not enough time to negotiate the British proposal. He said the main objective of the summit was to reach a basic agreement.

The European Commission has urged the Spanish Government to apply another labour reform to face the high unemployment numbers. The Economy Commissioner, Olli Rehn, has not revealed whether Brussels is planning to impose a fine on Spain for the imbalances which continue in the economy, but he did speak of 'the need to carry out structural reform' in the labour market and to put other measures in place to improve the figures.

The OECD has warned that economic deterioration is set to continue in Europe. It says that the advance indicators for October show that there will be a further fall in the first half of the year, and notes that the slowdown is now much steeper in the USA and China.

Experts from FUNCAS, the Savings Bank Foundation in Spain have said that the stagnation will continue in 2012. Their panel of experts has said that there will be a cut in growth of 0.8% in 2012 compared to their previous prevision of a fall of 0.1%. They say it is called by the slowdown in growth in Europe and limits on credit availability.

PP Economic Spokesman, Cristóbal Montoro, has said he thinks it is very difficult for employment to be created in 2012 and said the country would have to wait more time, and carry out reforms looking forward to 2013.

Hacienda collected 10.4 billion € in their fight against fraud in 2011. The amount is 3.6% more than in 2010.

9.4 billion of the amount recovered came from new control measures while the other billion was volunteered by the public.

Since 2005 Hacienda has caught up with 55.833 billion € of tax which had been evaded.

Iberia will see 50% of flights on the 18th and 29th of December as SEPLA pilots' union goes on strike in protest at plans to set up a low cost airline, Iberia Express. The Civil Aviation Authority is reported to have received 'pressure' to guarantee the trans-Atlantic routes.

The imposed minimum service level, which also guarantees connections to the Canaries and the Baleares, has been challenged by the union.

Wage rises agreed in the round with the unions in November have increased by only 1.6%, while the average wages increase this year to November is 2.51%. The increase is the lowest for all the months ever seen except in September. 2,411 wage round deals have been registered for 2011. More than half a million workers will be affected by the wage rounds agreed in November.

Used car prices fell by 1.7% in November. The European Price Observatory said the average price was 12,801 € in Spain, an amount which is 1,000 € below the EU average.

The average age of vehicles on the roads of Spain is now 5.8% older and is now close to seven years old.

The María Dolores de Cospedal Government in Castilla La Mancha has raised just 300,000 € with the sale of 52 official cars. The vehicle were sold at an average price of just 5,700 €, but the 156,000 € armour plated A8 which was used by Barreda, the previous President in the region did obtain any bids. There are still 16 vehicles to be sold off which will handled in a new session.

Dia supermarkets are lining up to join the Ibex 35 index. The selection committee are revising the new composition today and companies which could leave the index include BMI, Bankinter and Sacyr.

Telepizza are to serve their pizza on Air Europa flights. The company is to develop a social individual format which will be served on national flights and services to the Canaries and Europe.