Spain’s January-july trade deficit widens five-fold to $38.65 billion
Spain’s trade deficit in the first seven months of the year widened more than five-fold compared to the same period a year earlier to 38.52 billion euros ($38.65 billion), the Industry Ministry said on Tuesday.
The outcome was wider than the deficit for the whole of 2021 and compared with a 6.99 billion euro deficit in the first seven months of 2021, the ministry said in its monthly report.
Despite the gap between imports and exports widening, growth in Spain’s exports in the period compared to a year earlier exceeded that of other big European countries, such as Germany and Italy, according to Eurostat.
Like many other European countries, Spain is entirely dependent on imports for its oil and gas supplies, and prices have soared following Russia’s invasion of Ukraine.
Although the EU tries to cut its electricity consumption from power plants fired with Russian gas, imports from there still accounted for 14.5 per cent of Spanish overall gas imports, twice as much as a year earlier.
Meanwhile Spain is raising 5 billion euros ($5.02 billion) via a syndicated sale of a new 20-year bond on Tuesday, with demand exceeding 38 billion euros, according to a lead manager memo.
Spain priced the bond at 9 basis points over its benchmark bond due in October 2040, said the memo released on Tuesday and seen by Reuters.
The country, which plans to issue a net 75 billion euros in bonds in 2022, mandated BBVA, Credit Agricole CIB, Deutsche Bank, JP Morgan, Santander and Societe Generale to handle the bond, which will mature on July 31, 2043.
Spain has not consulted the European Central Bank about a proposed banking tax as the plan could still be amended, ECB Vice President Luis de Guindos said on Monday, also warning that care needed to be taken with such measures at a time of economic uncertainty.
In July, Spain’s leftist ruling coalition introduced a bill in parliament to create a temporary levy on banks and large energy companies, aiming to raise 7 billion euros ($6.99 billion) by 2024 to ease cost-of-living pressures.
“I am not going to pre-judge, we need to know the details... and it still can be amended, or not,” de Guindos told a financial event. “So far the government has not asked us (the ECB) for an opinion.”
Even though higher interest rates are boosting banks’ financial margins, De Guindos said that a banking levy right now could have negative side-effects.
“We could find ourselves in a situation that requires higher provisions” from banks to cope with higher loan losses.
“We don’t have to look just at the short term, let’s look beyond it,” De Guindos said, warning of the risks to the companies most affected by the energy crunch.
Top executives at Spanish lender Sabadell said on Monday that the proposed tax would directly hit banks’ profitability and also distort competition as it targeted lenders with a turnover above 800 million euros, leaving out the units of foreign banks in Spain and also smaller Spanish banks.
“I understand that it is necessary to work together because of the difficult environment... but just a few banks have to pay,” Sabadell Chairman Josep Oliu said. “Therefore... it is crucial to give it a second thought on how exactly we should work together.”
The Spanish government wants the legislation approved before the end of the year.
Spain’s Santander hired a law firm to investigate a whistleblower report that a group of bankers visited a strip club after a day of company meetings and pressured younger employees to join, the Financial Times reported on Monday.
The incident took place in February after the bank’s global debt capital markets team held meetings at the lender’s UK headquarters, the FT said, citing several people with direct knowledge of the events.
A Santander spokesperson said that the bank takes “all concerns about employee conduct extremely seriously” and follows a “rigorous process” to ensure the facts are established and “appropriate action is taken as necessary.”
It said further that the details were being treated “confidentially, and as such, we cannot comment further.”
Concerns about the trip and that junior staff had felt pressure to attend were raised to the bank’s compliance department by an internal whistleblower, the FT reported, citing people with knowledge of the matter.
Impor t s r ose 40 per cent from the same period ayearagoto 261.49b eur os, hiked by oil and gas pr ices, while expor t s incr eased by24per cent to 222.96b eur os