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Has Ambrose Been Nobbled?

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Telegraph article

ITP has clearly not been broken by the crisis. It has cut costs with a partial pay freeze but is now bullish enough to launch an investment blitz aimed at doubling sales by 2015. ITP is building a plant in Mexico to hedge costs in an industry where sales contracts are in dollars. Mr Alzola said a euro near $1.20 rather than $1.36 would make life a lot easier, but the firm is maintaining core engineering in its Basque homeland.

In Madrid, the computer logistics group Indra has just pulled off the impossible. The 30,000-strong company – which supplied the electronic voting system for the London Mayor’s election – has not only astounded Chancellor Angela Merkel by taking charge of Germany’s upper airspace, it has also won the contract to manage 80pc of China’s air traffic from the control centres at Chengdu and Xian.

China’s deputy premier Li Keqiang said last month that he has his eye on Indra’s flight simulator, already used by the US Navy for Harriers and F18s. It lets pilots fly in virtual 3D through eerily convincing terrain, adjusted for speed and time.

Indra’s foreign sales jumped a tenth last year to 40pc of the total while sales in Spain fell 3pc, keeping earnings nearly level through the crisis. It is a textbook case of rebalancing, yet achieved without the crutch of Peseta devaluation as in the early 1990s.

Strategic director Juan Jose González said the company is cutting costs by shifting plant to cheaper areas within Spain, rather than to Asia. "We have our own 'near offshore’ a few hundred kilometres from Madrid where unemployment is higher and wages are lower," he said.

Nearby at the ZED Group – which struck rich with the video game "Commandos" and is now the world leader in digital content for mobile phones – chairman Javier Pérez Dolset told me it was a myth that Spain had let wages soar into the stratosphere. "It still costs less than half to produce here than in the UK or Northern Europe, and the level of skill and artistic talent is greater," he said.

Anthropologically, you could say that Spain has refound its 14th Century creativity when it was the most dynamic society on earth, before Conquista gold corrupted the Iberian soul. Its chefs are sought everywhere, its sportsmen are triumphant. Even its boom-bust ordeal is the symptom of a thrusting nation in a great secular upswing, like Holland in the 1630s, or England in the 1720s. It is the declining plodders you need to worry about.

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Well of course it's going to take other things like increased agricultural prices, higher demand from countries like Germany and China, increased tourism due to revolts in other countries etc. and even then it may not be enough (for example they may lose a lot of UK tourism next year as our unemployment rises). Despite my New Year predictions, I'm somewhat taken aback by Ambrose's article - has he been paid-off? Or is he speculating on a dramatic turn-around?

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I'm somewhat taken aback by Ambrose's article - has he been paid-off? Or is he speculating on a dramatic turn-around?

The happy pills have started working? I always expect his articles to end with the tagline "Ambrose is writing from a secure institution". Love his TFH outlook though, he's one of us really :]

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It was a strange article - considering his normal armegedon prose.

What he's saying is not untrue - the Basque and Catalan bits of Spain were up their with Germany on enterpise and skill levels.

They have lost their way a bit - house price mania hit their and the level of government bureaucracy has got out of hand - central and regional went into a spendings arm race.

The stereotype of an idle, work-shy spaniard manyana originates from these regions. A basque friend refers to Castilans (the hot bit) as morrocans.

Spains problem is that these regions are not as competive as they once were and that they only ammmount to a small percentage of Spain's population.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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