Spanish Core Inflation Turns Negative

Spain’s underlying inflation rate turned negative in April for the first time since at least 1986 as the highest unemployment rate in the euro region curbed demand.

Core consumer prices, which exclude energy and fresh food, fell 0.1 percent from a year earlier, after rising 0.2 percent in March, the National Statistics Institute in Madrid said today.

The headline inflation rate IPC Consumer Price Index, based on European Union calculations, was 1.6 percent, in line with an initial estimate published on April 29.

The biggest contributors to the increase were clothing and footwear, up by a staggering 9.5%, transport was up by 1.5% and housing up by 0.7%.

Spain’s economy emerged from an almost two-year recession in the first quarter, even as unemployment rose to 20 percent. After the third-largest budget gap in the euro region prompted a surge in Spain’s borrowing costs, the government announced a 5 percent reduction in civil servants’ wages this week, and said the measures could undermine the return to growth. Taking billions out of the economy threatening the fragile recovery.

According to Bloomberg. The government plans to increase the main value-added tax rate to 18 percent from 16 percent in July. Retailers may pass on around half of the increase and absorb the rest, Deputy Finance Minister Carlos Ocana said on March 23. Inditex SA, the owner of the Zara fashion chain, said on March 17 that it would not pass the VAT hike on to consumers.

As households pay down one of the largest private-debt burdens in the euro area, Spaniards expect prices to fall and have the region’s second-most negative inflation expectations after Italians, according to data from the European Commission.

Spanish Village Cashes In, Bringing Back Peseta

In Salvaterra, on the border between Spain and Portugal, the peseta has been resurrected. For a limited period only, restaurants, taxi drivers, pharmacies and about 50 other businesses have been accepting payments in the old Spanish currency.

Spanish Stubs Out Cigarettes

Smokers stubbed out their cigarettes in tapas bars and restaurants across Spain as one of Europe's strictest anti-tobacco laws came into force on Sunday. After a one-day amnesty granted for New Year's Day, the new law banning smoking in all bars, restaurants and public places took effect at the stroke of midnight Saturday.

Man Rescued On Madrid Railway Tracks

A man who fell onto a railway line in Madrid was saved from serious injury or possible death by an off-duty policeman. [No sound]

Spain Flights Resume Following Controller Strike

Spain placed striking air traffic controllers under military authority and threatened them with jail terms in an unprecedented emergency order to get planes back in the skies and clear chaotic airports clogged with irate travelers.

Al-Qaeda Arrests In Spain

Police have arrested at least seven people in Spain after a raid on a group suspected of forging passports for an al-Qaeda-linked Islamic terrorist group.

Spain's Interior Ministry provided no other details, but the country's leading Cadena SER radio says the detainees formed part of a group based in Thailand and linked to Lashkar-e-Taiba, a Pakistan-based terror group blamed for the 2008 Mumbai, India, attacks that killed 166 people.

The arrests took place late Tuesday and early Wednesday in the northeastern city of Barcelona and in the surrounding region of Catalonia.

SER and other Spanish media say the arrested are mostly Pakistanis who stole passports that were later doctored and sent to Thailand for distribution to groups linked to al-Qaeda.

Spain To Privatise Barcelona & Madrid Airports

The Spanish government plans to privatise the country's top two airports, as part of a series of measures seeking to jumpstart anaemic economic growth.
Prime Minister Jose Luis Rodriguez Zapatero told legislators in Parliament that Madrid's Barajas and Barcelona's El Prat airports will be run by private operators under a licensing, or concession system. Both airports have been recently remodeled and expanded to absorb increased passenger traffic in coming years.

The country's airport operator AENA will also sell a 49% stake to private operators, above initial plans to sell a 30% stake.

The government is also planning to sell 30% of Spain's state-owned lottery company, Zapatero added.

Ready, Set, Snooze! Spain Holds Siesta Contest

A sleepy Spain is holding a siesta contest to promote the traditional nap that's endangered by the hectic modern lifestyle.

General Strike In Spain, But Impact May Be Limited

A first in eight years, about 10 million workers went on a general strike in Spain on Wednesday according to unions, to protest against the socialist government's tough labour reforms and spending cuts. But despite the movement causing transport chaos and clashes across the country, Prime Minister Jose Luis Zapatero has vowed there will be no reversal of the labour reforms, which make it easier to hire and fire workers and which received final approval from parliament on September 9.

Spain Rejects Basque Truce Offer

The Spanish government has rejected a ceasefire announcement by the Basque militant group ETA. Madrid ruled out talks on Basque independence and said police would continue their crackdown on the group.

ETA Declares Ceasefire In Struggle With Spain

Basque separatist group ETA declared a ceasefire Sunday in its bloody 42-year campaign for a homeland independent of Spain, vowing to give up guns and bombs to seek a democratic solution. [An extract from the ETA announcement]

Spanish Food Fight Festival

Thousands of people descended on the Spanish town of Bunol on Wednesday to take part in the Tomatina festival.

Spanish Aid Workers Freed By Al-Qaeda Return Home

Two Spanish aid workers freed by Al-Qaeda's North African offshoot returned home after nine months in captivity following the reported payment of a ransom of millions of euros.

Bullfighting Protesters Strip Down

More than 100 semi-naked protesters lay down in the shape of a dying bull Saturday outside one of Spain's most iconic buildings the Guggenheim museum in Bilbao to demand an end to bullfighting in the Basque Region.

Flotilla of Stinging Jellyfish Hit Spanish Beach

A vast flotilla of small, virtually undetectable jellyfish stung hundreds of people along Spanish beaches this week, the kind of swimmer's nightmare that biologists say will be increasingly common because of climate change.
Elche is just south of Alicante.

Michelle Obama Meets Spain's King

U.S. first lady Michelle Obama and daughter Sasha had lunch with Spain's King and Queen on Sunday at the royal family's holiday retreat on the resort island of Mallorca in the Mediterranean.

Spain's Catalonia Region Bans Bullfighting

Catalonia's parliament on Wednesday voted to ban bullfighting from January 1, 2012, becoming the first region in mainland Spain to outlaw the centuries-old tradition.

Spain's 'Low Cost' Prostitutes

Dozens of prostitutes for less than a hundred euros a trick, and apparently within the law: that's what many brothels here have on offer, just six kilometres over the border from France, in the Pyrenees. The place is making a name for itself among the French a popularity that local authorities could have done without.

Nine Injured in Running of the Bulls

Nine thrill-seeking runners were injured, three by goring, in a dangerous last running of the bulls at Spain's San Fermin festival, officials said Wednesday. It was the bloodiest run of this years festival.

Running Of The Bulls

At least three people ended up in the hospital with minor injuries after Tuesday's running of the bulls, the second-to-last running in this year's San Fermin festival in Pamplona.

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