Price increases and predictions for 2011

2011 starts for Catalans (and Spaniards) in a usual though very annoying way: prices and fees controlled by the government go up. Standard postal letters will be one or two cents more expensive, not really important in the age of electronic communication. Train and metro rides will cost around 3% more, as will highway tolls. Natural gas for heating and cooking will go up, the electricity bill by a hefty 10%, the use of public bicycles in Barcelona by even 15%. These increases exceed inflation by far, and ordinary "salarymen" (those lucky enough to have a job in a country with a 20% jobless rate) and pensioners will see their purchasing power decrease.
Families will no longer receive 2,500 euros for the birth of a child; anyway an ineffective way to stimulate population growth and not really "just" as it was the same sum for the rich and the poor alike. And people won't get the same tax reductions for the purchase of a home as before.
Bitter medicines to keep Spain away from the risk of default as the government does not make progress in reducing corruption, tax evasion and social security fraud, and cutting spending where it should, not in research and education as it did last year.

But it has finally seen the light on smoking. From January 2 smoking will be prohibited in all closed public spaces in Spain, i.e. bars and restaurants, discotheques, hospitals and even open-air playgrounds. And it has announced a further increase in tobacco taxes, currently among the lowest in the Euro area.

I saw two predictions in a list by the Financial Times that I thought worth reproducing here:

Will social unrest worsen in Europe?

In all probability, yes. Across the European Union, governments are cutting spending and unemployment is rising. This month, violent protests erupted across Europe. The immediate cause varied, but economic austerity was the common backdrop. That climate of austerity is likely to worsen and spread in 2011, as Greece and Ireland press on with International Monetary Fund-backed cutback programmes – and Portugal, Spain and perhaps Italy and Belgium struggle to ward off sovereign debt crises. Cuts will also be the order of the day in Britain. Meanwhile, the unpopularity of President Nicolas Sarkozy in France and his allegedly “bling” style – plus the approach of a presidential election in 2012 – makes unrest probable. Europeans have demonstrated in the past (1848 and 1968 spring to mind), that an atmosphere of social disorder, protest and unrest can easily spread across the continent’s national boundaries. Gideon Rachman

Will there be a global food crisis?

Yes. The global bill for food imports will surpass the $1,026bn record of 2008 and prices of several agricultural commodities will also top their previous record. The Food and Agriculture Organisation’s benchmark food index will also set a new high. Among key crops, wheat, corn, barley and oilseeds such as soyabean will see large increases; only rice will have limited gains.

Behind the spike is a string of supply problems related to bad weather. Demand is also strong, partly boosted by biofuel consumption. But there may be fewer food riots than in 2007-08: African crops have been abundant, shielding poor countries from the brunt of surging prices. Javier Blas

As to the Spanish stock market: the IBEX fell by 17% in 2010; if you compare this to a 9% gain in the FTSE 100 during the same period, there is a lot of margin for a rise in 2011.