2017 was the year in which all countries grew in unison for the first time in a long time. On the other hand, in the last twelve months a very different horizon has been seen, full of risks and vulnerabilities. The protectionism, the Brexit, the uncertainty about Italy or the turbulence in the markets … Everything has made the economy begin to grow at a more moderate pace. In that context, Spain has endured surprisingly. Although already below the 3% recorded in previous years, advances at rates of 2.5%, partly at the expense of savings and consumer credit. But nevertheless, there continues the high public and external debt, which has hardly been corrected. Y the external slowdown has begun to notice in a year marked by the following events.
The return of the CPI to revalue pensions
Barely five years has endured the pension reform of 2013 that unlinked its evolution of prices and resulted in increases of 0.25% between 2014 and 2017. As predicted by its detractors, when inflation regained vigor maintain it would be politically unsustainable.
The massive demonstrations of pensioners in February and March frightened to the Executive of Mariano Rajoy, who ended up renouncing his reform to approve the 2018 budgets and save the legislature. The PNV demanded a rise of 1.6% and managed to delay to 2023 the application of the sustainability factor, which reduces the initial retirement pension as life expectancy rises
Also, in this year – and three– The Toledo Pact has been unable to reach a common point on the recommendations to reform Social Security and remove it from the bulging deficits that it has been chaining since 2011. And it despite the demographic horizon. At least, the deputies have dissolved a stumbling block: all the political groups, also the PP, have agreed to put prices back as a reference for the update annual pension.
That pact was reached in October and has led the Government of Pedro Sanchez to use the average inflation of the year in 2018 and 2019 to ensure that pensioners do not lose purchasing power. For the mechanism to become final, and everything seems to indicate that this will be the case, we must wait until the Toledo Pact concludes its negotiations once, the Executive talks with the social partners and the Parliament approves a reform with many more adjustments that only the return of the CPI. Because if leaving the prices to update pensions was socially insostenibTo return to them without Social Security having more resources is financially impossible.
Lower wages ask for passage
Spain has returned to create a lot of employment in 2018. With this go four years creating between 400,000 and 575,000 employed. The high precariousness remains one of the pending subjects. The temporary rate exceeds 27%. And unemployment continues to be very high.
But after four years of intense recovery of employment, salaries have begun to demand prominence. During the crisis, the wage devaluation was primed with the lowest salaries. The governments, of the PP and the PSOE, and the social agents have tried to correct it in part. Not without tensions. The year began with an increase in the minimum wage of 5% and the pact between the popular executive, employers and unions to raise it to 850 euros per month in 2020 if the economy maintained its vigor.
That agreement followed in summer another collective bargaining between CC OO, UGT, CEOE and Cepyme, which begins by recommending salary increases in the agreement between 2% and 3%. But if something stands out in that pact is the commitment to ask that the lowest rewards of the agreements are placed at 14,000 euros per year (1,000 euros per month with two extraordinary).
But the star measure on the lowest wages came in October in the hand of the budgetary pact between the Government and Podemos: the minimum wage will rise in 2019 by 22.3% to 900 euros per month. The measure, which affects 1.3 million workers, has opened a debate in which the Bank of Spain has championed the opposite position, warning that it could cost 150,000 jobs. However, there have been quite a few economists who have answered that there is no clear and incontestable evidence that such an initiative has negative consequences. Neither are there otherwise.
One year negotiating the Budgets
The year began with the extension of the 2017 Budget and will end with another extension. Political instability and complicated parliamentary geometry make the approval of accounts one of the most complex issues for any government. The Rajoy had to be used thoroughly and until April he could not move forward the Budgets of 2018, after generous concessions to Basques and Canaries. The nationalists started the first rise in pensions since the crisis, of 1.6%. Now Sanchez faces the blockade of the PP and Citizens in the Senate, who do not even allow him reform the Stability Law to relax the deficit objectives and soften the adjustment. Thus, it has not secured the support for the 2019 accounts and has been forced to extend the 2018 accounts.
This year it was also agreed in March to return to raise the salary of the officials, one of the groups most affected by the cuts and recover what was lost in the crisis. The agreement also links wage increases to the progress of the economy.
Finally, the socialist government has presented new taxes to modernize the tax system before the new digital activities. It will approve, if it obtains the supports, a tax on digital activities, known as Google tax; another, on financial transactions, and a rise in corporate tax, so that companies pay more for external benefits.
A reform of minimums for the euro
The euro will remain incomplete for a while longer. The countries of the single currency They closed the year with a reform that provides a fiscal support to the bank resolution fund and gives new functions to the European Stability Mechanism (Mede), which will have new tools, such as lines of credit for countries with specific difficulties. However, there is still no progress on a roadmap to launch the community deposit guarantee fund, which the Commission considers a key piece for the Banking Union. Germany continues to demand a reduction in banking risks, while Italy continues without giving in to the limitation of sovereign debt in the balance sheets of its financial institutions. Only the commitment of having prepared the design of a budget for the euro zone anchored within the EU accounts. A year ago, that instrument was a taboo. Even so, its defenders -among them France and Spain- had to swallow with the demands of the northern countries that only serve to promote "convergence" and "competitiveness", leaving out any stabilizing function in times of crisis.
Prices of electricity at maximum
The price of electricity has not stopped during 2018. It started to rise in May, in August broke the barrier of 70 euros per megawatt / hour (MWh) and in September beat record: on the 12th of that month he hit annual highs, with an average price of 75.39 euros per MWh. That rebound made September the month with the most expensive electricity of 2018, and contributed to this year's path to be consecrated as the second most expensive since 1998.
This increase, the result of the increase in CO2 rights, the rise in oil prices or poorly designed prices, became a burden for the consumer and a puzzle for the Government, which in October adopted urgent measures to stop the escalation of prices. Among other things, it suspended the electric generation tax for six months, eliminated the green cent and the sun tax. The package also includes actions aimed at the most vulnerable citizens, such as the extension of the electric social bond, the creation of a thermal bond and the future implementation of a strategy against energy poverty.
Short, in jail
After a decade since the beginning of the crisis, 2018 saw how some of the bankers who contributed to aggravate it with their management entered prison. Until then, and after a flood of judicial processes, the few exdirigentes of the savings banks that had come to step on the jail (those of Novacaixagalicia) spent little time behind bars. Last October the Supreme Court he sent Rodrigo Rato to prison, converted into a symbol of an era of waste and corruption, the black cards of Bankia. Another 14 former directors or advisers were sentenced to more than two years in prison. It was the first judicial process of Bankia to be resolved, but another even more relevant has begun to be judged a few weeks ago at the Audiencia Nacional: the IPO of the entity, fraudulent according to the Prosecutor's Office (which requests five years in prison for Rato) and dozens of private accusations.
The year that has ended has also seen how the courts get stuck with the demands of those affected by the land clauses and other abusive conditions of the banks. Only one in four have been resolved, and in 97% of the cases the judges have given the reason to the clients.
Double synchronized relay in the big bank
In October, and for the first time, the two large Spanish banks, Santander and BBVA, announced that they were changing their executive boards. In the case of BBVA, the relay is at the highest level: starting in January, the now CEO, Carlos Torres, will substitute Francisco González in the presidency, who has been at the head of the entity since October 1999. The second place in the ranking will occupy, to the surprise of all, the Turkish Onur Genç, who does not speak Spanish and who has developed his career in Turkey and the USA.
The bank chaired by Ana Botín has also changed the second level: the Italian Andrea Orcel, from UBS, will be the new CEO. José Antonio Álvarez, who now holds the position, will become executive vice president and president of Santander Spain.
Both relays have elements in common: the two big ones want new faces to awaken the quote, which goes through a long tunnel in both cases. On the other hand, it has appealed to foreign CEOs, in a gesture that is interpreted as a sign of internationalization. Finally, the new managers are not traditional bankers, proof that the entities are looking for business-transforming executives before the digitalization of finances.
Housing, the year of rent
After the serial of the real estate bubble, its rupture and recovery, it can be affirmed that 2018 has been the year of the rent. And not only because the percentage of Spaniards living in rented houses is the highest in recent decades (16.9%, according to the latest figures from the INE), but also because as prices climbed, especially in large cities , evictions of tenants were triggered. These rose about 8% annually in the third quarter. Since at the same time the launches for mortgage default have declined, the evictions of the rent are already more than 65% of the total. The restlessness has been transferred to the political class. The penultimate Council of Ministers of the year approved a decree of urgent housing measures focused on the rent and whose parliamentary validation will take place at the start of 2019.
But there was also some turbulence in the buying market. The most remarkable one originated unexpectedly in a ruling of the Supreme Court, dated November 16, which indicated that it was the banks, and not the clients, who had to pay the mortgage tax. The president of the Administrative Litigation Chamber, Luis María Díez-Picazo, called a plenary session to review this criterion. The legal chaos lasted for three weeks until the room, by 15 votes to 13, reversed. An irrelevant decision because at the same time the Government announced (and carried out) a legislative reform for banks to pay the tribute.
End the tourists 'borrowed'
Until February is known the arrival data of foreign tourists December, it will not be known if 2018 closes with the sixth consecutive record of visitors. It will be, or not, by little. The tourism sector already discounted that 2018 would not bring the spectacular growth of previous years, especially by the resurrection of destinations that compete with Spain in the sun and beach, such as Turkey, Egypt or Tunisia. Many Britons and, above all, Germans who toasted on Spanish beaches now do so in the eastern Mediterranean.
Before that reduction of tourists borrowed, the sector, which has invested billions in sophisticating the offer, is torn between the temptation to reduce prices to maintain the occupation or to bet on clients with more wallet funds (Chinese, Americans, Russians …). The challenge, for the Government and for the associations of the sector, is the second: to achieve more with less. The issue is how to attract those visitors and promote other strengths (culture, leisure, landscapes, shopping …) to deseasonalize the offer and that the sun and beach is not the only attraction.
Black cars that taxi drivers hate
In 2018 we learned that those black and elegant cars with a sticker on the rear window were VTC, rental vehicles with drivers that use companies to attract passengers through applications such as Uber and Cabify. Their number grows month by month. Now they are almost 13,000 but will reach more than 20,000 thanks to the licenses granted by the courts. Your business makes direct competition to that of taxi drivers, who took up arms this summer calling for their ban, with demonstrations that began in Barcelona and then spread to Madrid, Seville, Valencia and other cities. In the same, hundreds of taxi drivers cut large roads and carried out vandalism, until the Ministry of Development announced a new Solomonic regulation that grants a four-year extension to the VTC to continue circulating with their current state license. As of that term, they will need a second municipal license if they want to continue operating.
Netflix and football sneak into the phone bill
The open television agonizes. 62% of Internet users in Spain are already paying to see content with some type of subscription on both video platforms in streaming OTT (Netflix, HBO, Prime Amazon, etc.) as pay television of the telecommunications operators (Movistar +, Vodafone TV, and Orange TV), according to the report Televidente Now! 2018, from the consultancy The Cocktail Analysis. The streaming platform with the most users is Netflix (more than 6.7 million), although only 79% pay for the subscription (total or shared). The telephone companies, including the reluctant Telefónica, have had to include in their programming series such as Narcos or Game of Thrones of these American giants to be able to capture their fiber or mobile clients. They also have to face the astronomical figure of 1,300 million euros that it costs to offer the League and the Champions this season. Vodafone said enough and preferred to lose more than 100,000 lines to pay that toll for football. MásMóvil, which for now does not offer any pay TV service, was the big winner of the year. It approaches the 8 million Internet and mobile client, after winning more than one million in 2018 and buying Lebara, the operator specialized in the immigrant segment.
The long succession of Draghi
Fans of central banks will remember 2018 as the year in which Mario Draghi returned the monetary policy to more conventional territories, even boring. The ECB president stood firm and extended until December what may have been the largest monetary engineering program in the history of Europe, the massive purchase of corporate and sovereign bonds that in four years has injected 2.6 billion euros. The Italian goes away with a gift: he cuts the tap of the debt acquisition, yes, but he will reinvest the amounts that are winning over a prolonged period. It is a respite for the European economy, which accumulates symptoms of slowdown.
Draghi takes his leave of office – his term ends on October 31 – and leaves two doubts in the air. The first is when the first rate rise will arrive after almost three years in ground zero. The Italian could put a flourish on his mandate with a rise just before leaving the ECB, but the economic storm clouds could delay the rise. The second question is the name of your substitute. Dismissed from the race hawk German Jens WeidmannFinnish Erkki Liikanen and Frenchman Benoît Cœuré win.
All pending of the commercial war
The threat hangs on November 8, 2016, when Donald Trump won the US election by surprise. In his honor, it must be said that he has been faithful to his promises: the president has fulfilled his threat to move away from partners and allies, generating what today appears to be the greatest risk to the international economy: a protectionist wave that everyone ends up paying.
The fronts are very varied. From the German Volkswagen to Chinese aluminum. Faced with the evidence that the damage goes in all directions, the leaders of the US and China agreed in December a truce of 90 days to end hostilities between the two great powers. This momentary peace came after approving tariffs on Chinese products for 53,000 million dollars, then for 200,000 and threaten another 267,000. The last two measures are now suspended. The closing of General Motors factories in the US He showed Trump that tariffs are double-edged weapons. The OECD has already detected a slowdown in world trade in the first half of the year, which will particularly harm the developing countries. It remains to be seen whether 2019 will be the year of total war, or it will remain in minor skirmishes.