Thursday, September 02, 2010

September has begun with a couple of bad economic indicators for Spain. Car sales plummeted in August and unemployment rose again after the summer respite. The latter, of course, reflects the ending of seasonal jobs. As a result, the percentage of unemployed here rose further beyond the astonishing 20% level.

But there was a surprisingly good statistic published this week as well; the construction sector soared 19% in June. That said, Mark Stucklin reports that “Spanish residential developers have responded to the figures with surprise and scepticism, saying output is no better than last year as far as they can tell. And the Vice-president of the Valencian developers’ association, suggested there might have been some mistake.”

Here in Galicia, 75% of men and women below 30 are reported to be living with their parents. I must say I wasn’t surprised to hear one young man quoted as saying he could actually afford to live alone but, if so, he’d have to go without his caprichos, or “whims/treats”. Possibly including a high-powered car. I’ve no real idea how representative he is but my impression is that Spanish parents regard it as an obligation to indulge their kids’ caprichos until they go off and get married, sometime in their 30s. Maybe this is why employers can get away with offering salaries of 1000 euros a month, just as they were doing ten years ago. Before inflation of 3-5% a year.

Still on the economy, this is a thought-provoking FT article* on Germany which addresses divergent prices across the EU. It makes the eye-opening claim that some prices in German supermarkets are 30% below those in Spain. The writer concludes that The intra-eurozone imbalances will not only persist but probably increase. This will make the economic adjustment for Spain, Portugal or Greece even more difficult than it already is. Those persistent imbalances, much more than the build-up of debt, are my deep cause of concern about the long-term health of the eurozone. But from a German perspective, this strategy boosts growth in the short term. It is, of course, a beggar-thy-neighbour strategy. The improvement in Germany’s economic growth is driven not by productivity gains but by real devaluation. Which may or may not be open to Spain, of course. Perhaps those who think that Germany must be shackled before the weaker members can grow their way out of trouble have an unanswerable case. In theory, at least.

But the weekend approaches and, along with it, our medieval fair (the Feira Franca) here in Pontevedra. The program is pretty comprehensive and includes a demonstration of falconry in the Alameda and a jousting match in the bullring. And it’s all free. Well, not really. We all, of course, pay for it (and for the numerous other summer events) in our taxes. I can’t help wondering whether this event will follow the trend of the last ten years and be even bigger in 2011.

Finally . . . The Spanish Consumers’ Association has issued a scathing report on the responses of mobile phone companies to a set of six questions about their service. Happy Movil took 15 minutes to respond to these; Vodafone 26; Simyo 51; Orange 69; and Telefónica’s Movistar a whopping 112. I’m guessing the customer picked up the bill for these. And at a premium rate.

But, if you think that’s bad enough, what about this – “In Movistar’s case it was normal for the call to hang up, be engaged, or end in an inescapable loop of automatic options.” And this is the most profitable phone company in the world, I seem to recall. Though clearly not one which believes in investing an adequate proportion of its gains in customer service. Once they do, sell your shares.

*If this link doesn’t work, could someone please tell me and I’ll reprint the article below.

Tailnote for new readers: My elder daughter has now published the second chapter of a novel she describes as “A fast-paced political thriller but, above all, a personal tale of pride and paranoia.” Set in a fictionalized Cuba, it’s being e-published one chapter per week. Click here. The easiest way to get new chapters, I guess, is to become a Follower of her blog. Or use Google Reader or the like.

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