The European Central Bank (ECB) is very clear that the cost of starting the green transition as soon as possible far exceeds the risk of leaving things until the last minute.. This Wednesday, the banking supervisor presented a study in which it analyzes in great detail the effects that the adaptation of companies and households to an ecosystem without polluting emissions will have on the economy. Among the ideas that best summarize the situation, one fact: delaying the ecological transition for three years and concentrating efforts in the second half of this decade could confront consumers and companies with energy prices like those experienced at the beginning of the invasion of Ukraine.

In their study, ECB researchers propose three different scenarios that the eurozone economy could face on its way to reducing polluting emissions to zero.. The document focuses on analyzing the consequences that each of them would have in the short-medium term (until the year 2030).

The first of them is the most optimistic. It would be an accelerated transition, in which companies and households focus from the beginning on achieving their objectives. The second would involve delaying the transition until 2026, but with a final settlement that would compensate for the delay in the beginning and meet the emissions target for 2030.. Of course, with higher effort and cost. Finally, a third scenario proposes a transition that also takes three years, but would be smoother and less costly.. Instead, the increase in the planet's temperature would drop to 2.5ºC by the end of the century, with the potentially catastrophic consequences that this could entail.

The ECB researchers conclude that the first scenario —in which immediate and decisive action is taken— would bring significant benefits to companies, households and the financial market. The initial costs and investment would be higher than in the other two paths, but would be amortized before. This would allow families and companies to reduce their energy costs faster than in the other two scenarios.. The idea is to withstand a greater blow at the beginning, to later achieve greater savings in the medium term.

The ECB is very clear that this first scenario is, undoubtedly, the most desirable: “the faster the ecological transition, the lower the financial risk and the less public support will be necessary to mitigate the costs,” they point out.. “An accelerated transition is preferable to a last-minute push,” he summarizes.

This brings us to the second scenario, the one in which the transition is delayed by three years, but the delay is compensated by a greater effort in the middle of the decade.. The ECB believes that in this situation, citizens and companies would face energy prices “like those seen at the beginning of the Russian invasion of Ukraine.”. Something that would produce “a severe deterioration” in the profitability of the companies that most depend on energy to produce. It is worth remembering that in March 2022, the wholesale price of electricity reached €283/Mwh, triple what was registered last August.

Under this assumption, the economy would be weakened, which would lead to greater losses for the banks.. Furthermore, this overexertion would imply a higher level of debt, which would increase financial vulnerability and credit risk.

Finally, the third option—a smooth transition with a delay of three years—would imply a level of economic risk and investment similar to that of an accelerated and immediate adaptation.. However, this more progressive adaptation would come at the cost of further aggravating the physical threat posed by climate change.. A greater increase in global temperature at the end of the century is associated with more severe natural disasters in the long term, with the obvious consequences on the economy that this would have.

Of course, regardless of the scenario, there will be companies that will suffer the consequences more than the rest. The manufacturing industry, mining, or electricity, water or gas suppliers will be the sectors most affected by their greater dependence on dirty energy.

The financial system will also be affected.. The ECB estimates that in a scenario like the current one, the average bank will suffer 25% higher losses in 2030 compared to those registered last year only due to the indirect consequences of the transition. In addition, the most exposed entities are the large systemically important banks—those whose failure would put the global financial system in trouble.

The price of housing remained stable in the second quarter of the year, increasing in price by 3.6%, in line with the increase registered three months earlier, according to data published this Thursday by the National Institute of Statistics (INE).

Between April and June of this year, new housing was again the one that increased its price the most, 7.7% year-on-year, while used housing registered an increase of 2.9%.

With this new year-on-year increase, housing prices have risen for 37 quarters in a context marked by the rise in interest rates to stop inflation and the consequent rise in financing costs, which has slowed down sales and the granting of mortgages. .

2.1% more than the first quarter

In addition to the annual increase, house prices increased by 2.1% in the second quarter of the year compared to the previous quarter, the largest advance since the beginning of 2022..

By type of home, on that occasion the one that increased the most was second-hand, which did so by 2.2% compared to the period between January and March. Likewise, new home prices increased by 1.7% quarter-on-quarter.

This increase occurs after the price of housing became more expensive by 3.5% year-on-year in the first quarter of the year and that in 2022 as a whole it staged its biggest rise since 2007, chaining nine consecutive years on the rise, despite the quarterly drop of 0.8% at the end of the year.

Grows in all communities

Housing prices presented positive annual rates in the second quarter of the year in all autonomous communities. The largest increases occurred in the autonomous cities of Ceuta and Melilla with 6.2% and 6.1%, respectively.

Above the average, the increases in Navarra (5.6%) also stood out; Cantabria (4.7%); Andalusia and the Canary Islands, (4.5% in both cases), and the Community of Madrid (4.1%).

In the Valencian Community prices rose by 3.5%, while in the Balearic Islands and Catalonia they rose by 3.2%, respectively. For their part, Murcia (1.4%), Extremadura (1.8%) and Castilla-La Mancha (2%) recorded the lowest annual increases.

Compared to the previous quarter, there were also increases in all communities with Extremadura (3%), Castilla-La Mancha (2.9%) and Andalucía (2.7%) leading the way.

Little supply, much demand

As highlighted by the real estate portal Fotocasa, the increasingly significant imbalance between supply and demand for housing is pushing prices up and although there are many citizens waiting for a big price drop to take place, it is difficult for produce, since no significant adjustments are expected.

For its part, Clikalia agrees that the price of housing will continue to grow for the remainder of the year, as a result of this imbalance, if measures are not adopted to reduce it. In addition, he points out that the rise in interest rates is leaving potential buyers with low financial capacity out of the buying and selling market.

Powerful gentleman is a gift of money also in the telecommunications sector. One more proof has been the acquisition by STC Group, the main Saudi operator, of a 9.9% stake in Telefónica for a total amount of 2,100 million euros.. This makes the group the main shareholder, but it has assured that it does not want to take control of the entity, strategic for Spain.. But this is just one more piece of a relevant puzzle at the European Union level; or a house of cards that has been shaky in recent times.

“Telecommunications infrastructures are a fundamental element for the strategic autonomy of the EU, but several obstacles have been emerging that make it difficult to meet the objectives of the Digital Decade”, explain Raquel Jorge Ricart and Judith Arnal in a report by the Elcano Royal Institute. Added to this is the fact that stock market prices have been declining, therefore opening the door to foreign investments.

STC President Mohammed K. Al Faisal commented that his company shares many similarities with Telefónica and highlighted that “this important long-term investment” is aligned with “the growth strategy” of his company, which has already made investments in the information sector. communication and technology, both in Saudi Arabia and abroad. “The investment is very profitable for STC. Telefónica's cash flows are very interesting and at the current price it gives an 8% profitability in dividends, which is outrageous in a company that is so safe and with a projection of increasing its price,” says Leticia Poole, professor of Economics and Company of the European University of Valencia, as reported by Jacobo Alcutén.

In fact, the case of Telefónica is not the first.. and may not be the last. And the Arab group E& confirmed in July talks to fully enter the European markets through a collaboration with PPF Group, based in the Czech Republic. PPF Group consolidated its position in the European telecommunications market with the acquisition of Telenor's assets in Hungary, Bulgaria, Montenegro and Serbia for €2.8 billion in March 2018, after previously acquiring O2 in the Czech Republic and Slovakia.

Since then, it has divested itself of the Montenegrin business and separated its retail telecommunications businesses from infrastructure, but maintains its intention to be a medium-sized European telecommunications operator, although this requires Arab investment.. Since then, talks between the parties have been taking place at the highest level, seeking, they say, a “strategic collaboration in central and southeastern Europe.”

David Hernández, analyst at El Orden Mundial, explains to 20minutos that since Saudi Arabia approved the Saudi Vision 2030 plan, “it has set three major objectives: modernize its economy and reduce dependence on oil; attract new foreign investments and strengthen the private sector; and become a great economic power, which not only has a leading role in the oil sector”. From Arabia they understand that the world order “is changing and that is why these great strategic objectives are being set” for the medium and long term.

Hernández highlights that there are several sectors that the country wants to promote. “One of them is tourism, as seen for example in the sports sector, but also telecommunications” because Saudi Arabia wants to be an important “industrial hub for the region”. Thus, STC is 65% controlled by the public fund, and is one of the large telecommunications companies in the Middle East: “It is specialized in the field of 5G and is also beginning to work in Africa and Europe”. But he goes a step further and maintains that “the maneuver of Spain and Telefónica surely revolves around looking even further, also in Latin America.”

It is, again, a strategic question. “We have to understand that for Saudi Arabia, European countries are increasingly less relevant. “Arabia has been able to balance its relations, reduce its dependence on the US and Europe and even these countries increasingly have a closer relationship with Russia,” summarizes the analyst.. Europe and Spain are playing a lesser role at the political level, “but it could be said that Spain has a preferential position for foreign policy”, and he gives as an example the agreements on Defense, so relevant in the times that they run

Arabia has been able to balance its relations, reduce its dependence on the US and Europe

In this context of difficulty, Thierry Bréton, Commissioner for the Internal Market, stated in 2022 that “high-speed Internet requires large investments”. For this reason, Elcano insists, in addition to facilitating the deployment of networks in the short term, Brussels is “examining the important question of who should pay for new generation connectivity infrastructures.”

In September 2020, the Commission already approved a Recommendation urging Member States to boost investments in broadband and very high capacity connectivity infrastructure.. In addition, once the Connectivity Special Group was set up a month later, a subgroup made up of representatives of the Member States was created to dedicate specific efforts to studying the reduction of the costs derived from the deployment of electronic communications networks.

In the particular case of Telefónica, the Government had to respond to the information and assured that it will preserve “the strategic importance” of the company in the medium and long term.. “The Government has the ability to value these types of investments that do not affect the control of the company. There are channels to preserve our strategic autonomy that the Government puts in place, and what I want to emphasize is that Telefónica is not only an emblematic company in our country, but it is a strategic company, a strategic operator and that the Government will ensure. “, of course, for the strategic autonomy of Spain with absolute normality and tranquility,” summarized the spokesperson for the acting Executive, Isabel Rodríguez, in statements to TVE.

From STC they reiterated, in this scenario, that they have no intention of acquiring control or a majority stake in Telefónica. “This is a great investment opportunity that allows us to use our solid balance sheet and at the same time maintain our attractive dividend policy,” they noted.. All in all, this acquisition represents “another important milestone” in its expansion and growth strategy, and reflects confidence in Telefónica's sustainable growth and upside potential.

As part of its growth strategy, STC has made a series of investments in the information, communication and technology sector, both in Saudi Arabia and abroad, the most recent being the acquisition by its subsidiary Tawal of the assets of United Group telecommunications towers in Bulgaria, Croatia and Slovenia.

Inflation has not gone on vacation this summer. A year after the long-awaited de-escalation began, prices have returned to an upward path that is here to stay until the end of the year. Behind the increases in the CPI in the last two months is mainly the rise in fuel prices, which have accumulated eight consecutive weeks of increases and could add pressure on a shopping basket hit by drought and poor harvests.

According to provisional data published this week by the INE, inflation rose three tenths in August to an interannual rate of 2.6% and did so for the second consecutive month, after having already increased four tenths in July compared to 1.9%. registered in june. In this way, the behavior of the CPI in the summer months par excellence has put an end to the price moderation experienced in the last year, after peaking in July of last year with a rate of 10.8%.

The origin of the increases in the CPI in the last two months is found above all in the increase in the cost of fuel, according to the INE. Data from the European Union Petroleum Bulletin show a clear upward trend in the price of both diesel and gasoline during the last eight weeks, in which both fuels accumulate increases of 12% and 8%, respectively.. The liter of diesel has gone from paying 1,437 euros at the beginning of July to reaching 1,612 euros in the last week, its highest level since mid-February. In parallel, the price of gasoline has risen from 1,591 to 1,721 euros per liter, the highest figure so far this year.

“Every summer the price of gasoline usually rises due to greater demand. We go on vacation, we take the car more, there are more flights…. The demand for fuels increases due to holiday trips,” explains economist Antoni Cunyat, professor at the Open University of Catalonia (UOC) and the University of Valencia. “At the beginning of the summer, prices usually start to rise and towards the middle there is normally a drop that ends with a rebound towards the end of the summer,” agrees Borja Ribera, professor at EAE Business School and financial adviser to GVC Gaesco.

However, this summer's rise has been uninterrupted. To the usual summer behavior, this year has been added a cut in production by the Organization of Petroleum Exporting Countries (OPEC). The body made up of large producers of 'black gold' such as Saudi Arabia, Iraq and the United Arab Emirates agreed in early June to extend the decline in crude oil production until the end of 2024 to try to contain the downward price trend.

Despite the fact that drivers have noticed the rise in prices when going through the pump, the experts consulted by 20minutos deny that there could be an escalation in fuels as abrupt as the one triggered after the Russian invasion of Ukraine, which caused the liter diesel and gasoline will exceed 2 euros in June. “The situation is different. There is a threat of recession and we have higher interest rates. A significant increase in fuel prices would add inflationary pressures, with which the ECB would continue to increase interest rates and demand would fall, which would put downward pressure on the demand for fuel and thus its price,” says Cunyat.

Impact on food

The UOC professor points out that, although a change in trend is expected, it is possible that the rise in fuel prices will continue at least during the month of September.. “If the prices of the fuels that we have now are maintained for several more months, they will end up being transferred to the rest of the prices, because they make logistics more expensive and that makes the entire chain more expensive,” he points out.

On the other hand, Ribera sees the change in trend in the evolution of fuel prices closer and is more reluctant to the possibility of contagion from the rise in basic necessities. “It is clear that the price of transportation influences the shopping basket, but lately we are seeing that the price of oil has become uncorrelated with that of essential goods.. This last year we have had a very significant drop in the crude oil price indices and it has not manifested itself in the prices of basic products,” he says.

The EAE Business School professor attributes this distancing between the behavior of oil prices and that of the shopping basket to the cumulative effect of the time lag in the transfer of the extra cost and the reluctance of prices to drop. The price of food is very sensitive to temporary elements such as poor harvests caused by drought. In this sense, the Spanish Federation of Food and Drink Industries (FIAB) has warned that the lack of rainfall and high temperatures are having a strong negative impact on agriculture and livestock. One of the products that is being most affected is olive oil, whose price has skyrocketed above ten euros per liter.

“Olive oil is one of the first products that, as a consequence of the drought, began to rebound in the market in March, and now, especially in the last month, consumers are beginning to notice the increase in price in a more significant way,” explains María Romero, a financial analyst at Afi. The acting First Vice President of the Government, Nadia Calviño, acknowledged this Thursday that “the perspective is not that there will be a short-term drop” in the price of olive oil, given that this year's harvest is being “very bad”.

Uploads in sight

Beyond fuel and food, forecasts suggest that the rise in prices will continue until the end of the year, although inflation will remain far from the record levels reached last year. Funcas' forecast, for example, predicts a gradual rise in the CPI variation rate until closing December at 5%. The comparison with the worst months of the inflationary crisis was favorable before the summer, but from now on that positive effect disappears, because inflation began to be contained a year ago.

However, core inflation, which excludes energy and unprocessed food from the calculation due to their high volatility, is expected to moderate in the coming months.. The provisional data for August already shows a drop to 6.1%. “This is what we have to watch in the coming months.”. That will be the key to seeing the impact of fuel prices. If in a couple of months we see that the underlying price rises again, it will indicate that the increase in fuel prices is spreading to the entire economy,” concludes Cunyat.