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)

-