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New rules and laws: Everything that changes in Spain in July 2021

As the month of July kicks off in Spain, we take a close look at all the important changes that come with it, from vaccines to entry requirements, new VAT charges, car devices and more.

New rules and laws: Everything that changes in Spain in July 2021
Photos: Help Flash/AFP

Delta variant expected to become dominant in Spain 

Spanish researchers and public health officials believe the Delta variant of coronavirus, first identified in India, will become the dominant Covid-19 strain in Spain over the course of July.

On June 24th, the Delta variant accounted for four percent of the cases detected in Spain, three points more than the previous week.

In Catalonia, at least 20 percent of new cases are due to the Delta variant, the region’s health official Josep Maria Argimon told reporters at a press conference on June 17th, adding that it would be “predominant” in two to four weeks.

The Health Ministry has so far only officially recorded 62 cases of the Delta variant in Spain, but several regions have reported many more cases than this. Galicia has reported 25 Delta variant infections, while Castilla y León are investigating 83 possible cases. 

The variant has also been found in Andalusia, the Balearic Islands, Canary Islands, Cantabria, Castilla-La Mancha, Castilla y León, the Valencian Community, Extremadura, Murcia, Navarra, La Rioja, Ceuta and Melilla.

READ MORE: How much is the Delta variant spreading in Spain?

Vaccines for thirty-somethings

In July, Spain’s vaccination campaign will focus largely on getting people in the 30 to 39 age group their first dose of the Covid-19 vaccine.

Many Spanish regions have already started inoculating those aged 35 to 39 towards the end of June, whilst Madrid has decided it will start allowing thirty somethings to book their vaccine appointments in July.

Administering second doses to those in their forties, fifties and sixties will also be a priority, especially for the latter group as only around 30 percent of the 60 to 69 age group have completed their vaccination treatment (roughly half that of people in their fifties). 

That’s in large part because the AstraZeneca vaccine has been reserved for this group and delivery delays and side-effect investigations have hampered its distribution. As a result, Spain’s Health Ministry has brought forward their second dose by two weeks. 

As of June 29th, 16 million people (35 percent of the population) have received their full vaccination treatment and more than half of the population (52 percent, 24.7 million people) have at least one dose.

To read all the latest vaccine news from Spain, visit The Local Spain’s Covid-19 section

Photo: Pau Barrena/AFP

New travel entry requirements 

July 1st marks the start of the requirement for British travellers to Spain to show proof of full vaccination or a negative PCR test.

Prime Minister Pedro Sánchez made the announcement on Monday June 28th with regards only to the Balearic Islands, but it has been widely reported that the requirement will apply to travel to all Spanish regions, to be confirmed in an official government bulletin on Tuesday. 

Conversely, Spain added the United States to the list of third countries that are exempt from presenting negative tests or vaccination certificates, meaning American travellers will able to visit Spain more easily during the month of July. 

To read all the latest travel news and information relating to Spain, visit The Local’s travel section

EU digital Covid pass launches

Still on the topic of travel, this digital ‘travel pass’ should make things a little easier if you’re venturing out of the country. 

The EU’s Digital Covid Certificate, as it’s officially known, launches across the bloc on July 1st, although Spain’s regions have made it available to their residents in June. 

In theory, people travelling from Spain to another EU/EEA country will be able to use their vaccination, testing or recovery certificates to get a QR code which allows for quicker and hassle-free travel in Europe. 

READ ALSO:

How to get a Digital Covid Certificate for travel from Spain to the EU

New VAT rules for imported goods

Imported goods with a value of €22 or less used to be exempt from tax, but this condition will be scrapped on July 1st across the EU. 

This means all goods arriving into Spain and other EU countries from non-EU countries will be subject to VAT, regardless of their value.

This EU-wide regulation will particularly affect businesses that import goods from outside of the bloc and people who shop online on international websites such as China’s AliExpress. 

If the goods cost more than €150 (not including transport, insurance and handling charges) you will also have to pay customs duty.

If businesses don’t register with the The Import One-Stop Shop (IOSS), the VAT will be paid by the customer when importing the goods into the EU. 

Postal or courier companies may charge the customer an additional clearance fee to collect this VAT and carry out the necessary procedures when importing the goods.

New device for cars in Spain

Back in January we reported how the warning triangles drivers in Spain have to carry in their cars in case of a breakdown are being phased out and replaced with these new emergency lights.

As of July 1st, drivers in Spain can use these DGT-approved V-16 emergency lights (luces de emergencia) instead of the warning triangles, although it won’t be obligatory to do so until 2026. 

Photo: Osram

VAT drop for electricity

The Spanish government’s bill to reduce the VAT on electricity from 21 to 10 percent in light of opposition to historically high rates comes into effect on July 1st.  

Last month we also reported how Spain’s main electricity access rates, the regulation costs of electricity which customers pay for, will no longer be frozen as they have been since 2018. 

The changes to the electricity rates means it has become more expensive to use electricity in the first part of the day from 10am – 2pm and in the evenings from 6pm – 10pm from Monday to Friday. The average times are between 8am – 10am, 2pm – 6pm and 10pm – midnight. 

READ ALSO: Spain’s new electricity rates for 2021 -the tricks to help you save up to €300 a year

July kicks off with a heatwave 

As is customary during the summer, July will bring suffocating heat to mainland Spain, with the mercury expected to hit 35 C in many areas. 

It hasn’t been a particularly scorching month of June in Spain but July is forecast to start with temperatures between 5 and 10 degrees higher than normal from Friday, the first heatwave of the year. 

That means that in parts of Andalusia and Murcia the temperature in the first weekend of July could be above 40 C. 

Photo: Jaime Reina/AFP

Ten single-use plastics officially banned

As of July 3rd, changes to the Packaging Act will come into force. 

Manufacturers will not be allowed to produce food and beverage containers made of Styrofoam from July. Furthermore cutlery, cosmetic cotton swabs, balloon sticks, stirrers, plates, bowls and drinking straws will also no longer be made from plastic.

If retailers and restaurants have remaining stocks, they can continue to hand them out so that they do not end up unused in the rubbish bin.

According to the EU Commission, the products prohibited under the law represent 70 percent of the waste that pours into oceans, posing a threat to wildlife and fisheries.

Money for staycations 

Twelve autonomous communities in Spain are offering their residents – and in some cases people from other parts of Spain-  holiday vouchers worth hundreds of euros as an incentive for them to spend their summer holidays in their part of the country.

These offers are available for the month of July, so if you want to find out more click on the link below. 

TRAVEL: Which regions in Spain are paying residents to go on staycations?

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MONEY

Rampant branch closures and job cuts help Spain’s banks post huge earnings

Spain’s biggest banks this week reported huge profits in 2021 and cheered their return to recovery post-Covid, but ruthless cost-cutting in the form of thousands of layoffs, hundreds of branch closures and the removal of many ATMs have left customers in Spain suffering, in this latest example of ‘Capitalismo 2.0’. 

A man withdraws cash from a Santander branch in Madrid.
More than 3,500 Santander workers lost their jobs in Spain in 2021 and a further 2,000 more employees working for Santander across Europe were also laid off. Photo: PHILIPPE DESMAZES / AFP

Spanish banking giant Santander on Wednesday said it has bounced back from the pandemic as it returned to profit last year, beating analyst expectations and exceeding its pre-COVID earnings.

Likewise, Spain’s second-largest bank BBVA said on Thursday that it saw a strong rebound in 2021 following the Covid crisis, tripling its net profits thanks to a recovery in business activity.

It’s a similar story for Unicaja (€137 million profit in 2021), Caixabank (€5.2 billion profit thanks to merge with Bankia), Sabadell (€530 million profit last year), Abanca (€323 million profit) and all of Spain’s other main banks.

This may be promising news for Spain’s banking sector, but their profits have come at a cost for many of their employees and customers. 

In 2021, 19,000 bank employees lost their jobs, almost all through state-approved ERE layoffs, meant for companies struggling financially.

BBVA employees protest against layoffs in May 2021 in Madrid. Spain’s second-largest bank BBVA is looking to shed 3,800 jobs, affecting 16 percent of its staff, in a move denounced by unions as “scandalous”. (Photo by GABRIEL BOUYS / AFP)

Around 11 percent of bank branches in Spain have also been closed down in 2021 as part of Spanish banks’ attempts to cut costs, even though they’ve agreed to pay just under €5 billion in compensation.

Rampant branch closures have in turn resulted in 2,200 ATMs being removed since the Covid-19 pandemic began, even though the use of cajeros automáticos went up by 20 percent in 2021.

There are now 48,300 ATMs in Spain, levels not seen since 2001.

READ MORE:

Apart from losses caused by the coronavirus crisis, Spain’s financial institutions have justified the lay-offs, branch closures and ATM removals under the premise that there was already a shift to online banking taking place among customers. 

But the problem has been around for longer in a country with stark population differences between the cities and so-called ‘Empty Spain’, with rural communities and elderly people bearing the brunt of it. 

 

Caixabank laid off almost 6,500 workers in the first sixth months of 2021. Photo: ANDER GILLENEA/AFP

Just this month, a 78-year-old Valencian man has than collected 400,000+ signatures in an online petition calling for Spanish banks to offer face-to-face customer service that’s “humane” to elderly people, spurring the Bank of Spain and even Spain’s Prime Minister Pedro Sánchez to publicly say they would address the problem.

READ MORE: ‘I’m old, not stupid’ – How one Spanish senior is demanding face-to-face bank service

It’s worth noting that between 2008 and 2019, Spain had the highest number of branch closures and bank job cuts in Europe, with 48 percent of its branches shuttered compared with a bloc-wide average of 31 percent.

Below is more detailed information on how Santander and BBVA, Spain’s two biggest banks, have reported their huge profits in 2021.

Santander

Driven by a strong performance in the United States and Britain, the bank booked a net profit of €8.1 billion in 2021, close to a 12-year high. 

It was a huge improvement from 2020 when the pandemic hit and the bank suffered a net loss of €8.7 billion after it was forced to write down the value of several of its branches, particularly in the UK. It was also higher than 2019, when the bank posted a net profit of €6.5 billion.

Analysts from FactSet were expecting profits of €7.9 billion. 

“Our 2021 results demonstrate once again the value of our scale and presence across both developed and developing markets, with attributable profit 25 per cent higher than pre-COVID levels in 2019,” said chief executive Ana Botin in a statement.

Net banking income, the equivalent to turnover, also increased, reaching €33.4 billion, compared to €31.9 billion in 2020. This dynamic was made possible by a strong increase in customer numbers, with the group now counting almost 153 million customers worldwide. 

“We have added five million new customers in the last 12 months alone,” said Botin.

Santander performed particularly well in Europe and North America, with profits doubling in constant euros compared to 2020. In the UK, where Santander has a strong presence, current profit even “quadrupled” over the same period to €1.6 billion.

Last year’s net loss was the first in Banco Santander’s history, after having to revise downwards the value of several of its subsidiaries, notably in the UK, because of COVID.

The banking giant, which cut nearly 3,500 jobs at the end of 2020, in September announced an interim shareholder payout of €1.7 billion for its 2021 results. “In the coming weeks, we will announce additional compensation linked to the 2021 results,” it said.

BBVA

The group, which mainly operates in Spain but also in Latin America, Mexico and Turkey, posted profits of €4.65 billion ($5.25 billion), up from €1.3 billion a year earlier.

The result, which followed a solid fourth quarter with profits of €1.34 billion, was higher than expected, with FactSet analysts expecting a figure of €4.32 billion .

Excluding non-recurring items, such as the outcome of a restructuring plan launched last year, it generated profits of 5.07 billion euros in what was the highest figure “in 10 years”, the bank said in a statement.

In 2020, the Spanish bank saw its net profit tumble 63 percent as a result of asset depreciation and provisions taken against an increase in bad loans due to the economic fallout of the virus crisis.

“The economic recovery over the past year has brought with it a marked upturn in banking activity, mainly in the loan portfolio,” the bank explained, pointing to a reduction of the provisions put in place because of Covid.

In 2021, BBVA added a “record” 8.7 million new customers, largely due to the growth of its online activities. It now has 81.7 million customers worldwide.

The group’s net interest margins also rose 6.1 percent year-on-year to €14.7 billion, said the bank, which is undergoing a cost-cutting drive.

So far, it has axed 2,935 jobs and closed down 480 branches as the banking sector undergoes increasing digitalisation and fewer and fewer transactions are carried out over the counter.

At the end of 2020, BBVA sold its US unit to PNC Financial Services for nearly 10 billion euros and decided to reinvest some of the funds in the Turkish market.

In November, it launched a bid to take full control of its Turkish lending subsidiary Garanti, offering €2.25 billion ($2.6 billion) to buy the 50.15 percent stake it does not yet own.

The deal should be finalised in the first quarter of 2022.

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