Spain

Spain’s economy could contract this year by more than 12% in a worst-case-scenario forecast by the country’s central bank, the first official figures that spell out the potential toll of the coronavirus pandemic on the European Union’s fourth-largest economy, Bloomberg News reported. The economic shock could push the unemployment rate to as high as 21.7% this year, undoing gains achieved in the aftermath of the 2008 global recession and the subsequent European debt crisis. At nearly 14%, Spain’s unemployment rate is already one of the highest in the developed world.

Spanish bankers and lawyers are bracing for a steep surge in insolvencies, amid the country’s rising death toll and strict lockdown measures. In an attempt to offset the economic cost, Prime Minister Pedro Sanchez last month announced a 117 billion euros ($128 billion) fiscal stimulus, but some business leaders say aspects of the government’s response risk making things worse, Bloomberg News reported. All those who work in non-essential services must remain at home over Easter, but the government says that companies must pay employees in full during that time.

Spain offered more help to households and small companies on Tuesday to try to calm fears about the country’s mothballed economy and shield the population from losing their homes during the coronavirus lockdown, Reuters reported. Infections and deaths from the virus are still rising, but health officials said the pace had slowed in the past few days. Confirmed cases rose by about 11% to 94,417 and the death toll hit 8,189 after 849 fatalities were reported overnight.

Singapore’s most high-profile restructuring case has attracted a new offer from a Spanish company, adding more uncertainty to a drawn-out process that’s left many retail investors in the lurch, Bloomberg News reported. Water treatment firm Hyflux Ltd. said in an exchange filing that FCC Aqualia SA, which is also in the water management business, plans a potential transaction involving it or its assets, without giving details. Hyflux investors have already been evaluating two different takeover offers and one debt-purchase plan.

Airbus announced plans to halt operations at its plants in France and Spain for four days as the coronavirus crisis spread from battered airlines to the manufacturing sector, The Irish Times reported. The most serious across-the-board disruption in Airbus production since a strike at then British partner BAE Systems in 1989 pushed its shares down 7 per cent as a rebound in other European shares quickly faltered.

King Felipe VI of Spain said on Sunday that he was renouncing his personal inheritance from his father, Juan Carlos, who has been implicated in a Swiss offshore account investigation, the International New York Times reported. King Felipe is also stripping his father of his stipend, in an apparent bid to sever any financial linkage between the Spanish royal household and the former monarch. The announcement came as King Felipe has himself risked getting entangled in the financial scandals centering on his father.

Spain’s Supreme Court ruled on Wednesday that a 27% interest rate applied by online bank WiZink to one of its credit cards was unjustified, a decision that could force other Spanish lenders to cut some of their rates, Reuters reported. Shares in Caixabank, Bankinter and Sabadell fell more than 3% after the much-awaited ruling on the view that it effectively sets guidelines for the sector, even though it was specifically about a WiZink card.

Telefónica posted a net loss for the fourth quarter, as restructuring costs and impairments from Mexico and Argentina underscored the challenges the company faces as its overhauls its business and reorients its strategy in Latin America, the Financial Times reported. The Spanish telecoms company said that revenues during the quarter dipped 4 per cent to €12.4bn, slightly beating the €12.38bn expected by analysts polled by Bloomberg. The fourth quarter net loss of €202m fell short of analyst expectations of a €715.7m net profit.

In a related story, the Financial Times reported that Spain’s central bank chief has warned its new leftwing government not to scrap a landmark labour reform that economists say is crucial to the country’s recovery. Pablo Hernández de Cos told the Financial Times that Spain’s competitiveness could be hit by moves such as a shift from company-level to sector-wide bargaining over wages and conditions — a priority for the ruling coalition. “The Spanish economy still needs to keep its competitiveness at a high level,” Mr Hernández de Cos said in an interview.

A Spanish magistrate has launched a criminal investigation into suspected account-fiddling at retailer Dia under its previous management, before Russian oligarch Mikhail Fridman took over the near-insolvent company last year, Reuters reported. Magistrate Alejandro Abascal said in court documents seen by Reuters that he was looking into whether the company’s management, including then-CEO Ricardo Curras, manipulated Dia’s pre-tax earnings data in 2017 to make it falsely appear the company had reached financial targets.