All posts by Luis Moreno

Moreno Luis - is a business and economics reporter based in Barcelona. Prior to joining the BNE24 he was economics editor of the BBC Spaine and worked as an economics and political reporter for Murcia Tuday.

The Euribor drops to 3.70% in April and makes variable mortgages with annual review cheaper for the first time since the end of 2021

The de-escalation of the Euribor is taking a long time to come, but it is beginning to be subtly noticeable in the pockets of the mortgaged. The reference index for the vast majority of variable rate mortgages in Spain has fallen slightly in April to 3.703%. Although the decrease is just over one hundredth compared to the previous month, this first drop after two consecutive increases has been enough to surpass the levels at which the indicator was a year ago, which represents the first reduction in the monthly quotas for mortgages with annual review from the end of 2021.

Although it remains above 3.7%, the Euribor has fallen slightly in April compared to the average of 3.718% at which it closed in March. Despite the decrease, the indicator is still above the level at which 2024 started, recording an average of 3.609% in January, its lowest level in almost a year. This behavior at the beginning of the year invited confirmation of the long-awaited de-escalation of the Euribor, which exceeded 4% for much of the second half of 2023. However, the increases recorded in February and March frustrated this trend, which could now recover.

Although the ups and downs in recent months have been very subtle and the indicator is stuck at around 3.7%, the decrease in April has caused the Euribor to fall below the rate in the Eurozone for the first time in more than two years. which was located a year earlier. In April 2023, the index closed at an average of 3.757%, half a tenth above the data known this Tuesday. This year-on-year drop will allow mortgages with annual review that are updated with the April data to register the first reduction in their installments since 2021, although the respite will be very small.. “The first drops in mortgages with annual review have arrived in April not so much because of a sharp drop in the Euribor, but because the indicator is already beginning to be compared with the figures from the spring of 2023, when a very pronounced upward path began,” explains Estefanía González, spokesperson for the comparator Kelisto.es.

For example, a person who took out an average variable mortgage of 150,000 euros for 30 years in April 2021, with a differential of 0.99% over the Euribor, will barely notice a reduction in their monthly payment of about 4.38 euros.. This slight decrease contrasts with the increases of the two previous years in which this average fee went from 448.98 euros in April 2021 with a Euribor at -0.487% to 481.55 euros per month after the 2022 review – when the indicator entered positive territory for the first time since February 2016 – and rose again the following year to 759.36 euros per month, almost 300 euros more than at the beginning. These amounts are doubled in the case of a mortgage of 300,000 euros under the same conditions.. The decrease with the April 2024 data would be just 8.76 euros per month, going from paying 1,518.73 euros in 2023 to 1,509.97 euros per month, still 612 euros more than in 2021.

“The reduction in price that we see this month in the installments of variable mortgages due to the stabilization of the Euribor is very slight and does not compensate for the increases in prices that mortgage holders have suffered in the last two years,” confirms Simone Colombelli, director of Mortgages at iAhorro, if He clarifies that this first relief is “good news for citizens and for the mortgage market in general, which is beginning to recover.”

The reduction is more pronounced in the case of mortgages with semi-annual review, since the drop in the indicator is steeper compared to the 4.160% registered six months earlier, in October 2023, when it reached its highest threshold in thirteen years.. In the case of a loan of 150,000 euros, the update with the data from April 2024 will reduce the average payment by 39.18 euros to 747.62 euros per month. If the total amount of the loan were 300,000 euros, the reduction would double and the amount would be 1,573.59 euros per month, compared to the 1,495.24 euros paid in the previous semester.

In any case, the forecasts indicate that these first declines will continue in the coming months, in which the European Central Bank (ECB) is expected to change the course of monetary policy in the eurozone. “If the ECB lowers official interest rates after its June meeting, we could begin to see more drops in the average monthly Euribor data and also some rate cuts in banks' commercial offers on mortgages,” Colombelli predicts.. “As the rate drop will not be very pronounced, we do not believe that the situation will immediately take a radical turn; the outlook will be more positive but not very different from the current one,” he clarifies.

BBVA reactivates its interest in Banco Sabadell and proposes a merger plan

BBVA confirmed on Tuesday its interest in initiating new negotiations with the Bank of Sabadell to explore the possibility of a merger between the two entities, according to the National Market Commission. BBVA has appointed advisors for this purpose, while Sabadell’s board of directors will analyze the proposals. BBVA is said to have hired JP Morgan and UBS to evaluate a possible total stock offer. The news of the potential merger caused a rise in Sabadell shares and a drop in BBVA shares.

This would be the second official attempt at a merger between the two banks. In November 2020, they announced negotiations but later broke ties. The current situation has changed, with improved margins, reduced costs, and a profitable British subsidiary for Sabadell. The merger could create one of the largest banking mergers in Europe, forming a true banking giant with combined assets of 1,037 billion and a market value close to Santander.

However, mergers often result in layoffs and office closures due to duplicated services. It is estimated that about 4,000 employees could be affected in this potential merger. The announcement also comes after the six main Spanish banks reported a joint profit of 6,566 million euros in the first quarter of the year, a 15.3% increase compared to the same period last year. Santander, BBVA, and CaixaBank were the top performers.

The Treasury has earned 11,000 million in personal income tax since the pandemic for not deflating the tax, according to the Bank of Spain

The public coffers have made money with the inflation of recent years, especially with personal income tax. The Bank of Spain estimates that not deflating this tax – that is, not adapting the amount of its rates or its tax benefits to inflation – has allowed the Treasury to collect 11,000 million euros more since the pandemic than it would have achieved if it had adapted the tribute to the rise in prices.

This follows from an analysis published by the Bank of Spain this Tuesday within the framework of its annual report.. A document in which the banking supervisor reviews the main events that have surrounded the Spanish economy in 2023 and the structural challenges facing the country.

The deflation (or not) of personal income tax has become a cause of dispute between the Government and the opposition. The PP has championed this measure and the communities it governs have applied tax deflations (something that some regional governments in the hands of the PSOE have also done). On the other hand, the central Executive has rejected this measure on different occasions, considering that it mainly benefits high incomes.. The Government also defends that it has already reduced the tax on low incomes through the reduction for income from work.

According to the supervisor's work, between 2019 and 2023, personal income tax collection increased by 38,000 million euros. Of them, 26,000 million are explained by the widening of the tax base. This is, because there are more people working or obtaining other types of income and because the income they obtain has increased.. However, a non-negligible amount of this gain (11 billion, 29% of the increase) is explained by the so-called “cold progressiveness”. That is, the non-deflation of the tax elements.

If we measure personal income tax revenue over GDP – a metric that allows us to know how much is obtained from this tax compared to what the economy produces – the Bank of Spain estimates that half of the increase in collection is due to non-deflation. Revenue from this tax has gone from 6.9% of GDP in 2019 to 8.5% in 2023. In fact, if the trend continues, they could reach 9% in 2024 if rates are not adapted.

The non-deflation of the rate has meant that the average rate paid by taxpayers (that is, the percentage of their income that will be paid personal income tax) has increased. Specifically, this percentage has gone from 12.8% in 2019 to 14.7% last year. Of this increase, the supervisor maintains, 70% is the fault of the non-deflation of the tax.

The middle classes, the most affected

The Bank of Spain explains that, in general, for every 1% that a taxpayer's income increases (whether due to a salary increase, earnings from savings, rent, home sale…), the fee they have to pay increases. 1.85%. For example, for a taxpayer with an income of 33,700 euros, these percentages translate into an increase in income of 337 euros resulting in an increase in the amount payable of 101 euros.

However, cold progression does not affect everyone equally.. The effects are especially focused on taxpayers with “average” incomes. Taxpayers with income between 16. 385 and 19,873 euros are the ones that notice it the most. For every 1% that their income increases, the fee to pay increases by 10%. In the case of filers with income between 19,873 and 23,988 euros, the relationship is four to one. The effect of cold progressivity is often diluted as income increases. However, the 30% of taxpayers who earn the least income (that is, income of up to 16,385 euros) are not affected by no deflation.

Cold progressivity affects in two different ways. Firstly, if the amounts that delimit tax benefits such as reductions in the tax base or tax deductions are not updated when prices or wages rise, they lose their effects.. The second way occurs when the amounts that delimit the tax brackets are not touched.. These amounts reflect a certain standard of living, but were set more than ten years ago. The rise in prices and salaries since then means that a salary of 22,000 euros gross (to give an example) now has less purchasing power than before the pandemic.. However, you pay the same personal income tax as you did then.

The supervisor has confirmed that non-deflation has also produced a reduction in inequality in the distribution of income. Income differences between the richest 10% and the poorest 10% after taxes have narrowed. Of course, although redistribution has increased, progressivity has been reduced: the difference between the average rate paid by the wealthiest taxpayers and those with the lowest incomes has been reduced.

However, deflating personal income tax means giving up an important source of income at a time when Spain will have to face fiscal adjustments to balance its deficit and public debt levels.. From Brussels and from more and more international organizations, messages continue to be sent to the Government to present a consensual adjustment plan as soon as possible.

Yolanda Díaz accelerates with the reduction of working hours and sets summer as the deadline to reach an agreement

The Ministry of Labor is making significant efforts to reach an agreement with unions and employers to shorten the working day before the arrival of summer. Yolanda Díaz, the second vice president and minister of the branch, has set a deadline of summer vacations to achieve an agreement that would reduce the maximum working day from 40 hours to 37.5 hours by 2025, with a preliminary reduction to 38.5 hours this year.

Negotiations for the reduction of working hours are currently underway between the Ministry of Labor, unions, and employers through social dialogue. However, these three-way talks have been at a standstill for the past two months as employers and worker representatives negotiate technical details at a separate table.

Díaz considers this negotiation table to be “undoubtedly the most important of this legislature.” She emphasized the need to make rapid progress in the coming months to secure an agreement before summer. While Díaz prefers a three-way pact, she is also open to an agreement solely with the unions, similar to those that have resulted in increases in the minimum wage or the second part of the pension reform.

According to Díaz, this measure is highly valued by citizens, regardless of their political affiliation. She sees it as a way to distribute productivity between workers and employers. Ultimately, the goal is to amend article 34 of the Workers’ Statute, which currently establishes a maximum working day of 40 hours on average throughout the year.

A crucial aspect under discussion is the introduction of flexible elements to reduce the working day. The current regulations stipulate that the 40-hour requirement is an average calculated annually. This means that not all weeks need to amount to 40 hours; the important factor is that the average for the year is less than this figure. One possibility is for companies to implement a reduction in working hours by offering additional days off, though this approach is not favored by unions.

The unions believe that reducing the working day to 38.5 hours in 2024 will have minimal impact on most agreements, as many already have shorter working hours established. However, setting the legal limit at 37.5 hours by 2025 could benefit approximately 13 million workers, according to CCOO estimates.

The Bank of Spain warns that adjusting pension spending by only raising contributions can harm employment

The Bank of Spain has issued a warning about the potential negative consequences of solely relying on increased contributions to finance the expected rise in public spending on pensions in the coming years. According to the banking supervisor’s annual report, this approach could harm employment and Spain’s overall competitiveness. The report focuses on the country’s structural challenges and highlights the significant challenge of the imminent retirement of the baby boom generation, which will lead to a substantial increase in retirement benefit expenditures. The pension reform implemented last year has further accentuated this situation.

To address this increase in pension spending, the government has proposed a progressive increase in social contributions, particularly for salaries exceeding 50,000 euros. However, in case spending exceeds 13.3% of GDP, the government will be compelled to implement additional measures to reduce spending or bolster income, a decision that will be based on the forthcoming Airef report next year. If no agreement is reached, an automatic clause will come into effect, resulting in even higher contributions to offset the expenditure increase.

However, the Bank of Spain highlights the potential drawbacks of relying solely on increased social contributions for pension system financing. According to their estimates, for every percentage point increase in the average social contribution rate, employment could decline by 0.25% after four years. In practical terms, a 1% increase in contributions would lead to the loss of approximately 50,000 jobs within the same timeframe.

Under the full implementation of the pension reform, the Airef predicts a 2.7-point rise in the average contribution rate. In numerical terms, this would result in a loss of 135,000 jobs within four years. Nevertheless, the fiscal supervisor notes that the impact would be uneven and primarily affect higher salaries.

(More information will be provided)

At least eight dead after a fire due to a gas leak in a pizzeria in Beirut

Tragedy struck the capital of Lebanon, Beirut, on Tuesday as a devastating fire caused by a gas leak engulfed a popular pizzeria, claiming the lives of at least eight people and leaving several others injured.

Authorities, led by Minister of the Interior Basam Mawlawi, swiftly launched an investigation to uncover the root causes of the incident and bring the responsible parties to justice. Initial findings suggest that the restaurant had stored up to four gas cylinders on its premises.

It is worth noting that the pizzeria is located within a building that accommodates various state administrations, including the Ministry of Finance’s Import Directorate and the National Authority of the Litani River, as reported by Lebanese news portal Naharnet.

The EuroMillions draw has a jackpot winner: a bettor takes home the accumulated 166 million euros

The EuroMillions draw this Tuesday, April 30, has produced yet another lucky winner in Europe, taking home the impressive jackpot of 166,790,050 euros.

The winning ticket was purchased in France, and in Spain, there is also cause for celebration as a second category winner claims their prize of 114,649 euros. This winning ticket was bought at Administration No. 40 in Seville, located on Calle San Jacinto, 17.

In Spain, each EuroMillions ticket costs 2.5 euros, and players must select 5 numbers between 1 and 50, along with two stars between 1 and 11. The coveted jackpot is won by matching all the numbers correctly, though there are also 12 other categories that offer various prizes.

The very first EuroMillions draw took place in February 2004 in Paris, and currently, citizens of Spain, Switzerland, France, Ireland, the United Kingdom, Portugal, Austria, Belgium, and Luxembourg have the opportunity to participate in this thrilling game of chance.

For the entire week’s winning EuroMillions numbers, be sure to visit the Lotteries section of 20minutos.es.

A four-month-old baby ends up hospitalized for an alcohol coma after his grandmother mistakenly put wine in his bottle.

A baby who is just four months old was admitted to the hospital this Monday in critical condition after falling into an alcohol-induced coma. Reports from La Reppublica suggest that the child’s grandmother mistakenly filled the baby’s bottle with white wine instead of water.

The incident took place in Brindisi, a city in the Apulia region of Italy, where the family resides. Apparently, the grandmother was unaware that she was mixing powdered milk with wine, assuming it was plain water.

The baby consumed the liquid without any suspicion until the mother noticed the symptoms of alcohol ingestion. Concerned, she rushed the infant to Perrino hospital in Brindisi, where doctors diagnosed an alcohol coma and conducted a gastric lavage procedure.

Although the Italian media reports that the baby’s condition is currently stable, the potential risks associated with alcohol consumption at such a young age cannot be ignored.

Local authorities have initiated an investigation into the incident, confirming it as an unfortunate accident. The Brindisi Prosecutor’s Office has been notified of the situation.

Petro denounces the lack of more than a million projectiles and ammunition in military bases

Colombian President Gustavo Petro raised concerns on Tuesday regarding the disappearance of over a million projectiles and ammunition, including missiles, from various military bases in the country. He suggested that these weapons may have fallen into the hands of international arms trafficking networks or illegal armed groups.

“The only plausible explanation for such a significant shortage is the existence of networks comprising military personnel and civilians involved in a large-scale arms trade, utilizing the legal weapons of the Colombian State,” stated the president during a House session held in Nariño.

According to Petro, inspections were carried out at the Tolemaida Fort in the central department of Tolima, as well as at the Army’s 10th Brigade base in the northern region of the country.

At Tolemaida, the president highlighted the following shortages: 746 81-millimeter caliber grenades, 3,712 M-26 hand grenades, 2,880 40-millimeter grenades, 1,590 60-millimeter grenades, 797 40-millimeter chain-link grenades, 8,203 7.62 caliber ammunition, 41,745 5.56 caliber ammunition, 131,577 7.62 caliber ammunition, and 626,614 5.56 caliber ammunition.

Meanwhile, at the 10th Brigade base, the missing weapons include two Spike missiles, 37 Nimrod missiles (both Israeli-made), 550 RPG rockets, 22 155-millimeter grenades, 621 106-millimeter grenades, 1,077 105-millimeter howitzer grenades, 1,077 90-millimeter grenades, 960 81-millimeter grenades, and 1,218 60-millimeter grenades.

The inventories also reveal the absence of 4,171 40-millimeter grenades, 24 40 mm, 9,829 162 caliber ammunition, 761,551 5.56 caliber ammunition, 57,992 5.56 caliber Slap ammunition, and 1,262 .38 caliber ammunition.

Regarding the situation in Haiti, Petro stated, “As you can see, only the 5.56 ammunition alone accounts for over a million lost rounds.” He suggested that these stolen weapons were either sold to armed groups within Colombia or potentially used in foreign conflicts, with Haiti being one of the closest conflict zones accessible by speedboat from the 10th Brigade base located in the Colombian Caribbean region.

The president also expressed his regret that “it is often these very same munitions that lead to injuries and fatalities among our military personnel.” He further warned that inspections in other military bases across the country will continue to identify and dismantle such criminal networks.

Five skeletons found under the house of Nazi Hermann Göring, in the Wolf's Den

A team of amateur historians and archaeologists from Germany and Poland have stumbled upon a startling discovery while conducting excavations at the former residence of high-ranking Nazi official Hermann Göring. The remains of five individuals, including a newborn baby, were found, all of whom were missing their hands and feet. This shocking revelation has renewed the interest in the Wolf’s Den (Wolfsschanze), the former Nazi headquarters in northeastern Poland, which continues to exude a haunting and ominous aura.

Located in the heart of a desolate forested area, the Wolf’s Den comprises extensive bunkers and dilapidated structures, now engulfed by moss. Its eerie allure attracts over 200,000 visitors annually, all seeking a glimpse into its dark past. Oktavian Bartoszewski, editor of the popular magazine Relics of History in Germany, expressed his astonishment at the discovery, stating, “We were completely taken aback.”

Bartoszewski and his fellow researchers have been collaborating with the research organization Fundacja Latebra for several years to unearth remnants of the former Nazi headquarters. The German-Polish team frequently encounters Nazi artifacts, including utensils, tools, and personal effects, during their explorations. While the ruins of Göring’s residence were presumed to have been thoroughly investigated, a researcher named Jens Hfalek noticed traces of an ancient wooden floor, prompting further excavation.

Their efforts unearthed water pipes and a fragment of a human skull approximately four inches below the surface. Upon making this discovery, the team immediately halted their work and alerted the authorities. As they resumed digging, the remains of five individuals were unearthed, identified by forensic experts as three adults, a teenager, and a baby. The German media speculates that these individuals could have been a family buried beneath Göring’s residence, perhaps victims of a dark secret known only to him.

Historian Bartoszewski suggests that it is plausible the bodies were dumped after the construction of the house, implying that those involved in laying the water pipes might have come across the human remains. Alternatively, it is also possible that the burial took place toward the end of World War II or even that these victims were unrelated to the Nazis and fell victim to a different crime. The investigation into this shocking discovery is now in the hands of the Prosecutor’s Office.

During World War II, Adolf Hitler spent more time at the Wolf’s Lair than at any other location, totaling over 800 days. This sprawling complex, consisting of approximately 200 buildings, witnessed one of the most famous assassination attempts on Hitler’s life on July 20, 1944 when Officer Claus Schenk von Stauffenberg planted a bomb that nearly claimed the dictator’s life.