TWO of Spain's largest high-street banks are reported to be in merger talks, potentially resulting in the joint entity being the second-biggest in the country in terms of share capital.
Eurozone growth takes off as recession declared officially over – and Spain leads the field with strongest economic expansion
13/08/2017
THE EUROZONE is officially now out of its long-running financial crisis a decade after the first signs of recession began to bite, and is growing rapidly and consistently, according to official statistics.
Now Greece is recovering and Spain's economy is growing again – albeit the job market and family finances still have a long way to catch up – economic recuperation in the 19 countries which use the common currency is, as a bloc, on the up again at last.
Eurostat figures say year-on-year growth stands at 2.1%, with the economy increasing at 0.5% in the first quarter of 2017 and 0.6% in the second quarter.
Jobless figures in the 19 nations are said to be at their 'lowest-ever' since the continent's real nose-dive in 2009.
And the International Monetary Fund (FMI) has already reported that Italy, Germany, France and Spain are doing better than they had originally believed.
The downside to this is that the European Central Bank (BCE) may now review its monetary policies, since growth has been fuelled by bond purchases and rock-bottom interest rates.
And low interest rates mean mortgages in the Eurozone have been at their lowest-ever in the last five or six years – a huge help to improving the health of household finance.
The ECB could begin to make major monetary policy decisions as early as this autumn, although at present inflation is too low for any drastic interest hikes.
At 1.3%, it still sits way below the Eurozone target of 2%, and is frequently the result of a weakened economic structure.
Spain, one of the weakest Eurozone economies during the crisis, grew 0.9% in the second quarter of 2017 as a result of higher consumer spending and increases in exports, and making it one of the fastest-growing in the 19 common-currency nations.
In fact, current figures from the National Institute of Statistics (INE) suggest Spain's economy is now back to where it was prior to the recession which the country began to suffer in 2008.
Forecasts for Spain's growth this year sit at 1.6%, and it looks as though it will meet its target – exports are on the up and unemployment is down.
It has gone from approximately 25% to 17.2%, although at present this is largely because of summer tourism work and jobless figures are likely to rise again in September.
Also, Spain's seasonal employment, temporary job and minimum wage-paying culture continues, meaning many of the new positions created are only three or six months long and, in a high number of cases, less than a week, with long periods on the dole in between.
This is particularly the case for areas which rely heavily on summer tourism for their economy, such as the east and south coast and the islands.
On the Costa Blanca, roughly 99% of new jobs created in May or June will have been extinguished by September or October, if the pattern of the past few years continues.
EU and Eurozone growth speeds up as UK's slows down
Meanwhile, within the EU but outside the Eurozone, UK economic growth has slackened up with the last six months having been the weakest in five years.
Although the British service sector grew by 0.5% - the only element that fuelled any growth at all - the manufacturing industry has shrunk by 0.4% and that of construction by 0.9%.
And the GDP as a whole only increased by 0.3% in the second quarter of 2017 – albeit this was up on the first quarter's 0.2%.
But per capita, GDP growth was just 0.1% - or, once changes in population had been taken into account, only a third of the gross figure.
Whilst the European Union's and the Eurozone's economies are showing fast growth and picking up strength, the UK is showing a reverse trend – GDP has continued to grow for the last 18 quarters, but this growth is now well below that of Europe and less than a third of that of Spain.
The British Office of National Statistics (ONS) calls UK economic results for the year so far 'a notable slowdown', whilst Market Analysis boss at Monex Europe, Ranko Berich, says 'the overall picture for 2017 is grim'.
This is largely due to falling investment, reduced consumer spending through austerity and wage stagnation, and a falling pound sterling which, although it has encouraged exports, means the UK's imports – which far exceed exports - are now more expensive, once again leading to consumer spending cuts as families tighten their belts in light of higher living costs.
The growth slowdown is attributed by analysts to be among the side-effects of the Brexit referendum, especially the uncertainty for businesses and investors surrounding the likely future of a Britain without the EU.
Pre-referendum, the pound sterling flucturted between around €1.32 and €1.40 – the latter nearly as high as up to 10 years ago – but now sits at €1.10 according to currency site Xe.com, down from €1.20 at the beginning of the year.
As a result, British expat pensioners in Spain and elsewhere in the EU are feeling the pinch, but most recognise they would not be able to live on their income in the UK at all, whilst in Spain they can at least 'get by' even if non-essentials have to be sacrificed.
Related Topics
THE EUROZONE is officially now out of its long-running financial crisis a decade after the first signs of recession began to bite, and is growing rapidly and consistently, according to official statistics.
Now Greece is recovering and Spain's economy is growing again – albeit the job market and family finances still have a long way to catch up – economic recuperation in the 19 countries which use the common currency is, as a bloc, on the up again at last.
Eurostat figures say year-on-year growth stands at 2.1%, with the economy increasing at 0.5% in the first quarter of 2017 and 0.6% in the second quarter.
Jobless figures in the 19 nations are said to be at their 'lowest-ever' since the continent's real nose-dive in 2009.
And the International Monetary Fund (FMI) has already reported that Italy, Germany, France and Spain are doing better than they had originally believed.
The downside to this is that the European Central Bank (BCE) may now review its monetary policies, since growth has been fuelled by bond purchases and rock-bottom interest rates.
And low interest rates mean mortgages in the Eurozone have been at their lowest-ever in the last five or six years – a huge help to improving the health of household finance.
The ECB could begin to make major monetary policy decisions as early as this autumn, although at present inflation is too low for any drastic interest hikes.
At 1.3%, it still sits way below the Eurozone target of 2%, and is frequently the result of a weakened economic structure.
Spain, one of the weakest Eurozone economies during the crisis, grew 0.9% in the second quarter of 2017 as a result of higher consumer spending and increases in exports, and making it one of the fastest-growing in the 19 common-currency nations.
In fact, current figures from the National Institute of Statistics (INE) suggest Spain's economy is now back to where it was prior to the recession which the country began to suffer in 2008.
Forecasts for Spain's growth this year sit at 1.6%, and it looks as though it will meet its target – exports are on the up and unemployment is down.
It has gone from approximately 25% to 17.2%, although at present this is largely because of summer tourism work and jobless figures are likely to rise again in September.
Also, Spain's seasonal employment, temporary job and minimum wage-paying culture continues, meaning many of the new positions created are only three or six months long and, in a high number of cases, less than a week, with long periods on the dole in between.
This is particularly the case for areas which rely heavily on summer tourism for their economy, such as the east and south coast and the islands.
On the Costa Blanca, roughly 99% of new jobs created in May or June will have been extinguished by September or October, if the pattern of the past few years continues.
EU and Eurozone growth speeds up as UK's slows down
Meanwhile, within the EU but outside the Eurozone, UK economic growth has slackened up with the last six months having been the weakest in five years.
Although the British service sector grew by 0.5% - the only element that fuelled any growth at all - the manufacturing industry has shrunk by 0.4% and that of construction by 0.9%.
And the GDP as a whole only increased by 0.3% in the second quarter of 2017 – albeit this was up on the first quarter's 0.2%.
But per capita, GDP growth was just 0.1% - or, once changes in population had been taken into account, only a third of the gross figure.
Whilst the European Union's and the Eurozone's economies are showing fast growth and picking up strength, the UK is showing a reverse trend – GDP has continued to grow for the last 18 quarters, but this growth is now well below that of Europe and less than a third of that of Spain.
The British Office of National Statistics (ONS) calls UK economic results for the year so far 'a notable slowdown', whilst Market Analysis boss at Monex Europe, Ranko Berich, says 'the overall picture for 2017 is grim'.
This is largely due to falling investment, reduced consumer spending through austerity and wage stagnation, and a falling pound sterling which, although it has encouraged exports, means the UK's imports – which far exceed exports - are now more expensive, once again leading to consumer spending cuts as families tighten their belts in light of higher living costs.
The growth slowdown is attributed by analysts to be among the side-effects of the Brexit referendum, especially the uncertainty for businesses and investors surrounding the likely future of a Britain without the EU.
Pre-referendum, the pound sterling flucturted between around €1.32 and €1.40 – the latter nearly as high as up to 10 years ago – but now sits at €1.10 according to currency site Xe.com, down from €1.20 at the beginning of the year.
As a result, British expat pensioners in Spain and elsewhere in the EU are feeling the pinch, but most recognise they would not be able to live on their income in the UK at all, whilst in Spain they can at least 'get by' even if non-essentials have to be sacrificed.
Related Topics
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