Good morning!

How is the week going? We once again have the bittersweet taste that good macroeconomic data gives that later do not have as much translation to various sectors of citizens. The European Commission has improved the growth forecast for the Spanish economy for 2024 to 2.1% and has reduced the deficit to 3%. Are good news. Spain will be the major European country that grows the most this year and also next (1.9%).

However, there are data that are very worrying. “Generations born after 1980 show a progressive delay in their age of emancipation,” states the latest Financial Survey of Families from the Bank of Spain. Housing is once again at the center of the problem: 65.9% of young Spaniards between 18 and 34 years old lived in the family home in 2022, 13 percentage points more than in 2008. Runaway rents, sky-high purchase prices and inability to access credit is what several generations of Spaniards face.

There is a palpable reduction in the wealth of the youngest. Only 30% of those under 35 years of age own a home, compared to almost 70% in 2011. The fall in the median net wealth of those under 35 years of age is alarming because they cannot access credit due to increases prices or because the financing conditions of the banks (for mortgages) are stricter. Here we explain why young people no longer have the economic capacity to get into debt.

The high interest rates raised by the European Central Bank (ECB) to fight inflation have further reduced the purchasing power of a home by the youngest people. Although countries such as Sweden, Switzerland, the Czech Republic and Hungary have already cut the official 'price' of money, the ECB maintains its aggressive monetary policy.

To make matters worse, salaries have slowed the pace of increases at the start of 2024 in Spain. Salaries grew an average of 4.8% in the first quarter of this year, according to statistics from the Tax Agency. The reality is that salary increases are not enough to balance the historic 'bite' of inflation in the pockets of workers in 2021 and, above all, in 2022.

There is a clear inequality problem in Spain. To give you an idea, the income of the richest 20% of the population in Spain is 5.5 times higher than that of the poorest 20%, according to the European Commission's social convergence report. Brussels pulls us by the ears due to the great inequality that exists in our country, despite the progress made with the labor reform, the Minimum Living Income or the increases in the Minimum Interprofessional Wage. Although the Spanish economy is the fastest growing of the large EU economies, Brussels is particularly concerned about Spain's risk of poverty. Here we explain that income inequality in Spain is among the highest in the EU.

It is an obligation for the Government to get its hands on housing prices.

The graphic

BBVA launched a hostile takeover bid for a competitor: Banco Sabadell. If the merger proposal, which Sabadell rejected, already seemed like a terrible move to us because it accentuates the lack of competition in the Spanish financial system, this assault by bad means is incomprehensible to us. Among other things, because BBVA's hostile takeover bid for Sabadell faces opposition from the Government, the parties and market doubts, but it is also confirmed that it will result in layoffs and less competition in the financial sector, with the closure of offices, since they coincide in numerous points of the Spanish geography as we show in the map of the municipalities that may be most affected by the closure of BBVA and Sabadell branches.

The Data

The harvest for the production of olive oil has grown, according to April data from the Ministry of Agriculture, Fisheries and Food. We are talking about 850,157 tons, 11% above initial forecasts, so “prices are expected to be below the high levels recorded in the current campaign.” It is good news and even more so when we still see that food is driving prices: food inflation rose again in April to 4.7%. Price increases in supermarkets refuse to moderate and advanced four tenths compared to the same month last year.

Entrepreneur


Sometimes there is no need to change the world, just do the right thing. The electricity company Holaluz presented itself as the electricity company that was going to “change the world” with renewable energy at “fair prices” for consumers, but it is on the verge of bankruptcy. He has never made money. Since its listing on the stock market, it has lost more than 43 million euros after spending more than 115 million on advertising, propaganda, public relations and advisors. With a debt of 58.8 million at the end of 2023, Holaluz threatens to join the long list of fiascos in the listed SME market, like other companies such as EiDF or Solarprofit. Here we explain the decline of Holaluz.

Every time he speaks the bread rises

The accusation has been built on uncertain income accusations, on an invented asset seizure, it has been built on the exhaustive analysis of all the seized documentation… but the houses of cards fall easily and we will see how many blows this one can endure.

Rodrigo Rato, who was managing director of the International Monetary Fund (IMF) and economic vice president of the Government with José María Aznar (PP), faces in a trial the request by the prosecutor for more than sixty years in prison for the origin of his fortune. The words at the head of this section correspond to Rato's lawyer, María Massó, who alleges that this case is “a house of cards.” However, the representative of the Public Ministry not only called Rato a “fiscal stateless person”, in a forceful allegation she pointed out that the former politician used “up to eight refined laundering techniques” through “opaque accounts” and financial “trusts” no less. opaque with the aim of “breaking the trail of the origin of the money.” At this link you can read 'Rato, on the bench: portrait of a “powerful” man who made fraud and money laundering a “modus operandi”'.

public good

One of the biggest problems facing humanity is the climate crisis. There is already a general consensus, not only in the scientific world, in society that firm steps must be taken to eliminate fossil fuels as an engine of the economy. However, year after year it can be seen how the oil and gas industry continues to maintain its power and ability to attract multimillion-dollar investments. The 60 largest global banks allocated $705 billion to the oil and gas industry in 2023, 4.7% more than a year earlier. One more example of the greenwashing of the oil and banking image. In fact, the US Congress has accused oil companies of being “deniers” of climate change and of eco-posturing. The US House of Representatives calls their climate actions “disappointing” and accuses them of using “double language” to whitewash their strategies focused on combustion fuels. Here you can read a report by Cristina G. Bolinches on how big banks accelerated financing for fossil fuels in 2023.

We like competition

In this section we offer you articles from other media that we found interesting:

Here we come to the end of the newsletter. We'll be back next Thursday. You already know that on June 28 and 29 we will celebrate the Festival of Ideas and Culture (FIC) in Barcelona, ​​the third edition of this free event open to the public that will feature Margaret Atwood, Sidonie and Juan Diego Botto, among many others. If you have a proposal or idea you can write to us at [email protected].

Good week!

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