Interest rates continue to fall, but your mortgage may not

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Interest rates continue to fall, but your mortgage may not

News Article Date: Wednesday 11th of March 2009

The Euribor interest rate, used to set the mortgages for many in Spain has fallen before 2% for the first time in five years, ending the day at 1.993%. Experts think that the index could end this month at an all time low, especially if the European Central Bank reduces interest rates tomorrow to below 2% as expected. However despite the Euribor reduction many ‘protected’ mortgages will not be falling. Many policies have a clause which sets a lower limit when the Euribor is used to set the interest charged. The users group AUSBANC says that many who think they will be charged less at the end of this month are in for a surprise. The Zapatero Government in Spain has sent a note to London ahead of the G-20 summit next month, with ten suggestions on reform of the financial system. Among the ideas is that banks be obliged to reveal their risks to their local government. Spain says their ideas are designed to reduce the uncertainty at a time when the economic perspectives are deteriorating. The ABC newspaper has applied to lay off 238 workers, some half of the total workforce, in a measures described by management as being needed for ‘economic, production and organisational’ reasons, and claim it is needed to guarantee the viability of the paper. A statement from the workers said they are not prepared to start talks on any sacking with management, and would ‘use all the tools within reach to avoid this aggression’. The Government says it is looking at improving the resources for INEM, the state employment service, following a survey which has shown they have only helped 2% of those who have found a job. Unemployment in Spain is fast approaching 3.5 million according to the latest figures. Unions have meanwhile their intention to start demonstrating about the unemployment numbers in Madrid next month. A large demonstration is being planned for the 19th. The head of General Motors in Spain, Carl-Peter Forster, has said that the viability plan for Opel will see, in addition to the requested state aid, a reduction in the workforce of some 3,500 and wage reductions for those who stay. The company wants the Spanish, Belgium and British governments to help fund them to the tune of 3.3 billion between now and 2014. There is more evidence that hotels in Spain are lowering their prices in the face of weak demand. The number of overnight stays in January was 12% down on the same month in 2008, and according to the National Statistics Institute, INE, and prices were lower too, by 2.6%. Meanwhile Spain has slipped a place in the list of the countries which are most attractive for tourism. According to the World Economic Forum Spain is now sixth. Top three countries are Switzerland, Austria and Germany followed by France and Canada head of Spain.
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