Responsibilities for the controllers after the strike

After an intense weekend motivated by the wild and covert strike of the air traffic controllers, it is time to ask what measures could be carried out against them.

When the agreement between the State and the Air Traffic Controllers expired in 2005, many tension have arisen between them, but what has happened this weekend has gone too far, the controllers started a strike, leaving their job on Friday at 17:00 without saying anything about the strike, it could be justified or not, but it is illegal and has left more than 600,000 people in the airport depriving them of their freedom to fly with the moral and economic losses, specially in a country like Spain, where the tourism in the main income source.

We have to take into account that the workers and the jobs are not all equal, there are some labors that should not be taken with irresponsibility and immorality, because they could cause to the society and the economy a greater damage than what could be caused by other sectors.

Now, the Government has to face, after declaring the alert state, the first time during the democracy, is what punishments are going to be kept against the controllers.

Four hundred and forty two disciplinary proceeding have been opened and the results could be from the final expulsion of the job, to close the process without any penalty to job and salary suspension.

A Judicial process has been opened in the prosecution of Madrid to decide which controllers have committed a crime and will interview all of them, the penalties could reach eight years in prison.

Since this work was militarized, the controllers are consider militaries and if they don’t follow the orders, they will be judged under the Military Penal Code. In the 91 article, military sedition is considered “who refuse to obey the order received and labors or threat, offend a superior could be punished from one to eight to ten years of prison, in the case of mere executors, with two to fifteen in the case of promoters, the leader in charge of sedition. " "If the facts were to take place at risk the safety of the ship or aircraft against insurgents or rebels, resorting to weapons or assaulting a superior, the penalties will be from ten to twenty years of prison"

In the other hand, individual complains seek a compensation for damages either through civil or criminal. A practice that would be very complicated, but in my opinion would be fair, is that drivers respond to the damage with their personal wealth, so, I think the next time that they would like to make an illegal wild strike, the will think about that twice.

Inditex; Finance and fashion

The Galician group, funded and chaired by Amancio Ortega, continues its career to strengthen its position as one of the largest textile groups in the world. This great success is caused for two main reasons, textile and financial.

Inditex is formed by nine companies which satisfy the needs of a great amount of people with different styles and ages. Those companies are Zara, the main brand of the group (1.422 shops), Zara Kids (209), Pull and Bear (640), Massimo Dutti (507), Bershka (665), Stradivarius (533), Oysho (402), Zara Home (263) y Uterqüe (64).

It also has a marketing policy which is very close to the consumer that allows it to detect the trends for the next season and bring them to its production and distribution channels, doing it much faster that the majority of its competitors.

There is a great international diversification what has given to Inditex an important prestige, being present in in seventy four countries and employing more than one hundred thousand people, but the most important is the capacity of Inditex to adapt to the needs of each country, so the clothes which could be purchased in London is not same that it could be bought in Madrid.

To all of this, we must add, that the last second of September, Zara opened its online shop, being this the distribution channel with more possibilities and that will probably increase its sells, what has made that the Inditex shares rose, the 62% of the Bloomberg analyst recommend to purchase shares, the 26% recommend to maintain them and only the 12% recommend to sell them.

All these factors have meant that what began as a small textile workshop in La Coruña, to become a world reference with an innovative approach, sensitive to changes in the market, adventurous and definitely different.

Brazil, World power in the 2,020

According to a study published by the Council of the U.S. Intelligence, a dependet agency of the CIA, Brazil will be a world power in the 2,020


This year, Brazil will have economic growth exceeding 6%, higher than the world average, due to  a policy based on reducing costs and encourage private sector investments.

A year ago, when the world was suffering the consequences of the global economic crisis, Brazil made an exhaustive study of the public accounts, and its debt dropped, and it became a creditor economy from a debtor one.

Currently, the South American country has a number of sector of investments with a great rate of return and low risk in its favor. These sectors are basically the oil, gas, electric energy, railways, agriculture and building construction where Coutinho (President, National Bank of Economic and Social Development of Brazil, BNDES) said that the Government of Lula Da Silva has had a great contribution which let Brazil protect itself against of the effects of the housing bubble explosion. There are three main reasons to believe in Brazil;

1. Commodities; For the next fifty years, it is expected that a half of population world growth will be produced by eight countries, where Brazil is the only one that does not increase exponentially the commodities’ consumption, what would give it an advantage in the world trade. The meat demand made by China will represent the 40% of the world production, besides; urbanization will demand more raw materials like iron, mineral that Brazil produces in great amounts and Brazil is the first tropical country that is able to supply the meat market. For ten years, the economic politic tended to extend the livestock and the results were excellent and it is expected a production improvement in the future.
2. Oil; The fact of having a great reserve of black gold makes Brazil a strategic country with many advantages  over the traditional oil suppliers of the Middle East Region.
3. Demography;  Thanks to the reduction of the fertility rate that went from being 6.2 children per woman in 1,964, to 1.8 children in the present, Brazil will be able to increase the quality of the State services (education, health, etc). This decrease of the fertility will make possible the improvement of the education quality, reason why a production improvement is expected.

This study argues that Brazil will not lose its status as an American partner, but notes that if it really wants to get that position, it must get closer to Europe and Asia.

According to another study published by PricewaterhouseCooper, the emergent countries will have a great grow by the end of the 2,050, having a better position than the European countries. United States will be leading the world followed by China, India, Japan, Brazil, Indonesia, Mexico, Germany, United Kingdom, France, Russia, Italy, Turkey, Canada, Spain, Korea and Australia.

And who knows whether after the poor state of the economy of the European Union due to the low contribution of the countries of the enlargement of 2007 and poor economic and political actions of the PIGS (Portugal, Ireland, Greece and Spain) countries such as Germany, Britain and France will regret having been part of the European Union or have given such aid or consent of both extensions.

BBK will take CajaSur. Cordovans win.

It is official, after months of rumors, finally, BBK will purchase the savings bank CajaSur and not Unicaja, creating the seventh Spanish bank in assets.

This new, it is in my opinion the best new for the Cordovans, specially for the workers of CajaSur

Who have not liked that new are the Andalusian politicians, specially the president of the Junta de Andalucía, José Antonio Griñan whose objective was that CajaSur was acquired by Unicaja-Malaga to create a great Andalusian savings Bank. This way, the Andalusian politics will not have a great power to abuse of its influence...they would have deferred or extended loans and without any doubt, they would have used it as a political weapon.

Even so, I do not understand how Andalusian politicians (from all the political parties) are showing their disappointment with the decision of the FROB, when Unicaja was planning to dismiss over 1,200 workers and close many offices due to the expand of Unica in Córdoba, this way the fact that BBK is not in Córdoba will let the Basque savings bank let open almost all the offices of CajaSur and their workers will keep their employs. It will not be weird that the CajaSur workers would be celebrating, drinking a toast with champagne and with a Basque Flag

Cajasur will keep its brand and its social work which put the logo of CajaSur in every act of Cordova and Andalusia and BBK will enter in the Andalusian-open-market where it only had a few offices. 

The VAT rise, another (Zapatazo) blunder of Zapatero

As it is known, the Spanish economy is having some great weakness moments and the arrival of the summer and the holidays (when the unemployment is normally reduced due to temporary jobs) it seems to be the perfect time for our economy minister, Ms Elena Salgado to shown, with her team, their economic knowledge to stimulate the private consumption.

But we have found a measure that has surprised everyone, the rise of the VAT, going against about what the macroeconomic textbooks say.

This fiscal measure, giving an income level, the immediate effect that it causes is a reduction of the income of the families, thus, family economies reduce their consumption and savings, so, they reduce the demand of goods and services. As a result, firms will produces less, using less productive factors and this will reduce the national income.

Moreover, it does not like that the VAT rise will produce greater revenues for the government, at least in the short term. Here, there are some examples of Germany, Portugal and there is also another case in our country, with the socialist government of Felipe Gonzalez.

• In 2,007 Germany increased its VAT, from 16% to 19%, what caused a sharp drop in consumption, so it will not be weird that the same will happen in Spain

• In Portugal and Spain happened exactly the same. The Government of Felipe Gonzalez  raised the VAT three times and the tax revenues were significantly lower than it was budgeted, being the VAT the principal responsible

However, the increase of the VAT will have revenue effects in the long term. So, let’s tied up our belt and let’s get used to the idea that this will last a long time. Although with the improvisational government of ZP we will never know which will be the next “measure”.

On the other side, while exports do not pay VAT in Spain (they do it in the place of destination), imports do it, getting more expensive and reducing the trade deficit, what is necessary.

Finally, the increase of the VAT is regressive, what means that it increases the social differences, for that reason, the indirect taxes are called the taxes of the poors. A medium class worker will spend all of its salary to consume, so, everything it pays to consume pays VAT. But who has a great salary and save a lot does not pat VAT of that part of its income that is not destined to consume. The increases of the VAT get worse the distribution of the income.

-Ivamos sounds like ibamos (we were) and IVA means "VAT"

 Ibamos mal (We were bad)

- Y ahora iremos peor (and now we'll be worse)

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The World Cup of South Africa; Economic issues

The football world cup of South Africa has begun; this event is not only about the sport impact but also the economic facts that arise from it. Today, more than ever, football is more a business than a sport.

In my opinion this “economic event” would produce three clear winners.

-         FIFA, the undisputed winner, whose numbers seem to be immune to the economic crisis, it has given 420 million of euros to the participating teams, increasing this amount in 159 million over the previous edition, in addition, it is estimated that it will have a turnover of 1.04 billion euros.

-     The second winner would be South Africa, thanks to the world cup, the transport, communication and security have been improved. Besides the tourism will be increase, and each tourist will spend an average of €3000 to which should be added, the benefit that the brand-country South Africa may produce.

-         Another winner but quite far from the precious two winners is the country that wins the competition. In Euro 2008 (a less important competition) the victory of Spain had a positive impact of 90 million of euros excluding the impact on consumption.

I think that it would be also very interesting to analyze the situation of our national team, Spain, whose players would receive 600,000 euros each if they win the tournament, this amount has been heavily criticized due to the bad economic situation that our country is suffering, and don’t lie ourselves, we are not only suffering the consequences of this global economic crisis, but most of all, we are suffering the consequences of an useless government.

The financial American giant, Goldam Sachs, as it does since the France world cup of 1998, writes its own report about the football world cup taking into account economic and political issues. This report also makes an exhaustive analysis of the situation of each country that play these days the maximum football competition, all of this in a key football, providing statistics anecdotes, curiosities, etc, connecting football and economy.

With respect to Spain, the two pages that the report devotes to it, the authors try to compare between the political and economic situation, in sharp decline, and the football situation which has a clear health growth; According to the report, the difference between both areas is that, while in the first one, our leaders have not been able to keep joint to change the situation, taking appropriate actions that would achieve to strengthen the economy in the mid and long term (so-called structural reforms). In the other hand, our team, managed by Luis Aragonés changed radically the situation, from being “the fury” a team with more heart that head and football to be a “tiki-taka” team, making that the “the red one” has become one of the most favourite teams for this championship.

Faced with a football team which seems to aspire to everything, we have a country that seems to aspire to nothing, or rather, that seems to aspire to be rescued by the EU (which we preside this year) following the trail of our battered partners.

The future is dark for our country and if the feelings of the public are very pessimist, an early elimination in the World Cup could mean another moral hit for the Spaniards, what could deteriorate the confidence in our possibilities. So  it would not be surprising that like the “Financial Times” publishes in one of its editorials; one of the most interesting Spaniards that our selection wins the championship is Rodriguez Zapatero.