VZCZCXRO3334
PP RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV RUEHSR
DE RUEHMD #0025/01 0091501
ZNR UUUUU ZZH
P 091501Z JAN 09
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC PRIORITY 0044
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHLA/AMCONSUL BARCELONA 3736
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS SECTION 01 OF 02 MADRID 000025 
 
SIPDIS 
 
STATE FOR EUR/WE:SAMSON,ZERDECKI, EEB/IFD/OMA, EEB/TPP/IPE 
TREASURY FOR OIA/OEE/W.LINDQUIST 
COMMERCE FOR 4212/DON CALVERT 
STATE PASS USTR 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EIND ELAB KIPR SOCI SP
SUBJECT: MADRID ECONOMIC WEEKLY, JAN. 5-9 
 
REF: MADRID 14 
 
MADRID 00000025  001.2 OF 002 
 
 
Contents 
 
ELAB: Unemployment Surpassed 3 Million in December 
ECON: December Inflation Falls to 1.5 Percent 
EFIN: Albacete and Toledo Savings Banks to Merge 
KIPR: Hotel Owner in Galicia is First Convicted of Cable TV 
Piracy 
EIND: Car Production and Sales Plunge 
SOCI: Highway Deaths Down Significantly 
 
 
Unemployment Surpassed 3 Million in December 
 
¶1. (U) The number of registered unemployed rose to 3.1 
million in December, according to the Ministry of Labor and 
Immigration.  This is almost exactly one million above the 
level of December 2007 and a 50 percent increase for the 
year.  Spain has the highest unemployment rate in the EU, 
with Eurostat estimates showing a 13.4 percent rate for the 
month of November.  The fourth quarter unemployment rate is 
expected to be released by the GOS around January 23.  In a 
radio interview January 8, Minister of Labor Corbacho opined 
that unemployment would likely continue to increase in the 
upcoming months, although not to the 4 million estimate that 
many are projecting. (Europa Press, 1/8; Expansion, 1/8) 
 
December Inflation Falls to 1.5 Percent 
 
¶2. (U)  Preliminary EU-harmonized estimates indicate that 
Spain's December inflation rate (December 2008 prices 
compared to the December 2007 level) fell to 1.5 percent, a 
rate significantly lower than the over 5 percent registered 
last summer.  The decrease in inflation will mean that a 
general labor contract clause covering about 9 million 
workers that mandates an annual salary adjustment if 
inflation reaches certain rates will not be triggered.  (INE 
press release, 1/5; El Pais, 1/6) 
 
Albacete and Toledo Savings Banks to Merge 
 
¶3. (U) Two small Castilla-La Mancha savings banks ("cajas"), 
Caja Rural de Albacete and Caja Rural de Toledo, announced on 
January 8 that they would merge.  The new caja will have over 
1,000 employees and 263 offices in 6 provinces in central and 
southern Spain.  Comment: The general expectation is that the 
economic crisis will lead to additional mergers, many of 
which are small and heavily exposed to troubled construction 
and real estate companies. (ABC, 1/8; Expansion, 1/9). 
 
Hotel Owner in Galicia is First Convicted of Cable TV Piracy 
 
¶4. (U) A court in Pontevedra, Galicia has convicted a hotel 
owner of IPR piracy for distributing the signal of cable 
channel Digital Plus to all of his guests without the 
required "collective contract," according to local media.  In 
Spain's first conviction for this type of IPR piracy, the 
hotelier was sentenced to six months in prison and a fine of 
20,000 euros.  Sogecable, the cable operator that owns 
Digital Plus, has filed criminal complaints against 24 hotels 
for similar signal theft, but this is the first case that has 
resulted in a conviction and sentence.  Convictions and 
especially prison sentences for IPR crimes have been 
relatively rare in Spain. (El Pais, 1/8) 
 
Car Production and Sales Plunge 
 
¶5. (U) Auto production decreased by 12 percent in 2008 from 
the year before amidst plunging sales, and industry estimates 
suggest that production will decrease in 2009 by another 13 
percent.  According to the auto and truck manufacturers 
association AFNAC, car sales in Spain fell by 28 percent in 
¶2008.  The year-on-year percentage declines were even greater 
in the last few months.  Auto exports have also decreased, 
with France and Germany being key markets for Spain.  Auto 
manufacturing is an important industry for the country, with 
70,000 direct employees and another 200,000 indirectly 
employed by the sector.  Automakers such as Ford and GM have 
announced job and production cuts in Spain in recent months. 
(Expansion, 1/9; El Pais, 1/5; ANFAC website) 
 
Highway Deaths Down Significantly 
 
¶6. (U) According to the Ministry of Interior, traffic-related 
 
MADRID 00000025  002.2 OF 002 
 
 
deaths on Spain's highways dropped by 20 percent in 2008 from 
the year before, reaching the lowest level since 1964.  This 
is the fifth consecutive decrease and results from more 
stringent speeding and traffic laws and aggressive GOS 
enforcement actions.  MOI's 2003-2008 strategic plan 
envisioned a 40 percent decrease in road deaths, a goal that 
the GOS has surpassed.  In 2008, there were 2,181 highway 
accident-related deaths, a drop of 1,848 (46 percent) since 
¶2003. (Ministry of Interior press release, 1/5) 
CHACON