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50 people fired in a mass redundancy plan (ERE) implemented by Macael townhall (bankrupt, can’t pay salaries) have received notification from the Employment Office that they won’t get the dole.

The reason is apparently because there is a dispute about whether the ERE is legal or not.

The ERE was approved by the Junta de Andalucia, but the Inspectorate of Work (Madrid) says that proper procedures were not followed and has accused both Macael and the Junta of “cutting legal corners”.

Since it looks as if the ERE is going to be appealed by the government, the dole people are refusing to cut cheques until a Judge rules on the legitimacy of the firing. The dole office points out that if the ERE is overturned back salaries will be paid, and any dole that was supposed to have been paid would have had to be reclaimed, and therefore it is justified in withholding payments.

Mojácar townhall has announced that anyone who direct debits their annual council tax (IBI) payments before the middle of June will get an automatic 5% discount off the bill.

In order to distract citizens from the woes of Spain, Madrid has ordered Queen Sofia to cancel her visit to the London Jubilee celebrations, due to take place in two days time. The reason is, according to El Mundo, that the Gib marching band is playing in London as part of the Jubilee celebrations. (Eh?)

Nor did they like the recent visit of the Count of Wessex to the place, a few days ago.

(King Juan Carlos, generally considered to have gone mad a few years ago, was being left at home anyway).

So the new tax limits have been issued in Andalucia. First of all: remember that personal income tax is split into two bits in Spain, the bit collected for the central government (Madrid) and then the bit for the region you live in (in my case, Andalucia). Madrid takes, if I remember correctly, between 12% and 22% of your income, depending on how much you earn.

Now, Andalucia has decided that to balance its books, it will increase its tax margins to make the highest tax band in the region a whopping 56% of your income (if you earn over 300,000€ a year). Making Andalucia, along with Catalunya, the most expensive place for the wealthy to live in Spain. (legal tax tip: move to Murcia, flats are cheap, and get on the padrón there instead. You don’t actually have to move).

But, anyone earning under 60,000€ will continue to pay the same as they do now, and people earning 60k will pay the same as people earning 100k.

So, the table (Andalucia’s portion of the tax, add the national one on top):

under 60,000€: no change.
60-80,000€: from 21,5% to 23,5%
80-100,000€: from 22,5% to 23,5%
100-120,000€: no change, stays at 23.5%
Above 120-300€: 25.5%

All of this to take effect next year. Where the loonies think they’re going to find people earning more than 300k in Andalucia is anyones guess. Also, aren’t we bankrupt now?

Interesting note: Griñán and his ministers earn just over 60,000€ a year. They’ve announced that they will accept a 5% pay cut “to share the pain”. That, according to my rough calcuations, puts them under the 60,000€ a year limit, meaning that this pay cut is roughly offset by the tax increase they would otherwise be exposed to. Hmm. As the Spanish say: el que hace la ley, hace la trampa.

Meanwhile, with a more immediate effect, petrol will go up to the maximum Andalucia can put it up to, Capital Gains tax goes up, as do a whole raft of secondary taxes.

Here’s an (free) idea to get some more money: Make the politicians who stole billions from the public coffers over the last few years pay it back. Anyone with me?

A full list of the changes announced yesterday can be seen here (El Mundo).

Egg on the face of the National Police after the company that manages its denuncia hotline went bust overnight, leaving citizens calling the official hotline and not having their calls answered.

The hotline, which has been run for a number of years now by a telemarketing company, allows you to make simple denuncias over the phone (for anything you need a basic police crime number for insurance purposes, but didn’t really expect the police to do anything about, basically). You then went to your nearest National Police station and picked up the crime sheet, meaning you didn’t have to wait in line.

Anyway, the company went bust overnight, and as is the way in Spain, didn’t bother telling anyone in advance that the coffers were empty. The National Police are now hunting for a substitute company, and insist that they were up to date on the payments.

Griñán, the chap who is back in power despite never having won an election, has announced that he will slash public sector wages (by up to 6.5%) and increase taxes to the maximum permitted in order to save 2,5 billion euros from the Andalucian budget.

Higher earners will see their IRPF increase as Andalucia increases it’s tax on income to the legal maximum, and several cents will be added onto petrol prices as the Andalucian tax doubles.

Hey ho.

Some clever clogs of a Republican has counter attacked me in todays Times. The debate continues!

An interesting link showing the savings, tax increase, and how much the rescue of failed bank Bankia is costing Spain:

http://www.elmundo.es/especiales/2012/05/economia/bankia/comparador.html

Today I became officially published in The Times.

……

OK, so it was only a letter on the letters page, but pride where pride is due!

Bankia, the about to be failed bank that was formed out of seven failed savings banks, actually needs a bailout of over 7 billion euros, not 4,5 billion.

Interestingly enough, the amount that the state wants the federal regions to cut out of their budget is only 5 billion, so that’s that savings gone then. Bummer.

CEO of Bankia, Rodrigo Rato, has announced his resignation, which is unusual.

Does that make sense? I think it makes sense.

Anyway, the new Minister for Justice in Griñán’s new Junta de Andalucía is Emilio de Llera , the man who is also the prosecutor general of Seville.

Emilio was the man in charge of investigation the ERE pension scandal currently rocking the Junta (where the Junta has been accused of spending hundreds of millions in a slush fund to pay off union leaders, ex-politicians and generally use public cash to buy cocaine and gin).

He’s now in charge of Justice for the region.

Which brings in allegations from the PP about cosy backhander deals and generally putting the gamekeeper in charge of the poachers. Or at least, as the PP puts it, “protecting oneself from the juridic process and the due course of law”.

Which, in Andalucía, is surely kind of the point? I mean, it’s what the PSOE has been doing for the last 30 years?

Bankia, the new Spanish bank made out of a shotgun wedding of no fewer than seven failed Spanish caja de ahorros, and the bank with the largest exposure to real estate debt in the country (37,500 million euros), has seen its share price sink through the floor after it was leaked that Bankia is bankrupt.

Expansion, the financial paper, tells us this morning that emergency talks between Madrid and the Bank of Spain are culminating in a 4,500 million euro plan to either nationalise the bank or split it into two, with the state taking over the “bad debt” of the bank.

Rajoy confirmed this morning that yes, if necessary, he will bail out and nationalise the bank, but it is “his least favourite option”.

Bankia was formed by the administration after merging the assets of Caja Madrid, Bancaja, Caja Segovia, Caja Ávila, Caja Canarias, Caja La Rioja & Caja Laietana, all Spanish savings banks that failed during the credit crunch.