jueves, 1 de mayo de 2014

"En mi puta vida he cobrado un sobre" , comentario de Soraya Sáenz de Santamaría , en el Boletín semanal "Businessovertapas.com" by Lenox Napier


Editorial:

So, it's not an original thought, but – just how far could Spain have gone and how wonderful could life have been here, if it wasn't for the damage caused by the crippling corruption and avarice that punishes this wonderful country? Has this reputation finally been the cause of a mass-exodus of wealthy foreigners and their wallets? Does any politician care? Will anything change after the PP and PSOE take a hammering in the European elections? There are many other easy targets to criticise in this country (the omnipresent paperwork being one), but until and unless we see a political will to change these ills, Spain can never rise to the standard of its European brothers. It's not high-speed trains that make a country a cultured and decent society, but genuine respect for its citizens.

...

Housing:

'The number of mortgages taken out in Spain fell for the 46th month in a row in February, a further sign that the country's dormant property market is still a long way from recovery, new figures released on Friday show. Only 16,420 mortgages were taken out in February, 33 percent less than in the same month a year earlier, the figures from Spain's national statistics agency show.

That year-on-year drop is also larger than the 32.4 percent fall clocked up from January 2013 to 2014. The average value of the mortgages signed in February 2014 was €102,443, or 1.1 percent lower than a year earlier the INE said...'. From The Local.


Is now the time to buy, asks The Guardian? '...The British are the biggest foreign buyers of properties in Spain, owning an estimated 170,000 homes in the country, mostly along the Costas. But unlike Britain, the long fall in house prices that began in 2007 is not over; in March, Spain's Instituto Nacional de Estadistica said they tumbled another 1.3% in the last three months of 2013, and that the annualised rate of price inflation was -7.8%...'. By the way, the British own a lot more homes than that, surely? The Mail, talking of rentals, noted in December '...An estimated one million properties in Spain are owned by Britons. Many are inhabited all year round by expatriates but hundreds of thousands were bought as holiday homes...'. We asked Per Svensson for his opinion: 'My guess is 1,5 million foreign owned properties at all, with 35% of them British, down from 2 million in 2007'.
 

Another provocative headline comes from The Telegraph. At this rate, those who stayed in the UK all along will start to feel they made the right choice... 'Our €250,000 Spanish villa sold for just €87,000. Falling property values and soaring costs are forcing ex-pats home - where some face fresh difficulties'. As usual, the 'comments' that follow are frightening.


'Russian President Vladimir Putin’s Costa del Sol mansion appears to be co-owned by five other wealthy businessmen. The Russian leader may have joined forces with a mixed group of Indian, Russian and Arab investors in the €19 million palace project in Benahavis, near Marbella, according to Olive Press sources. The ten-bedroom home is nearly 90% complete with Putin reported to have visited the coast over Easter to inspect the project'. Here.

 

The AUAN are to hold a public meeting with Esteban Gonzalez Pons (Nº 2 on the PP European list) on Monday May 5th at 7pm to take place in the ‘Salon de Actos’ at the entrance to Fines (a small town in north-eastern Almería) and the meeting is open to the public. The SOHA from La Axarquía, Málaga and the CALU (Confederación Andaluza para la Legalización Urbanística) have both confirmed their attendance. The issue of 'illegal houses' will be 'on the table'. Maura Hillen, President of AUAN said ‘We are grateful to Antonio Salas, President of the Mancomunidad of Municipalities of the Valley of Almanzora for organising this meeting. Sr. Salas has already raised his concerns about this issue as a result of the demolition of two more houses belonging to Britons last year. In fact he was the first politician to apologize for the problems suffered by Mr and Mrs Prior, who continue to live in their garage since their house was knocked down six years ago and who have yet to be compensated even though they are purchasers in good faith.’

Regarding the news published in recent weeks to the effect that the Junta de Andalucía is considering legislative change, Maura said, ‘We hope that these changes will be made. In fact it is possible that there is a willingness to do so. For example, we have been welcomed recently by the local executive of the PSOE at a provincial level. The problem is that currently there are no concrete results, and possible solutions are slipping further away. The economy and society does not run on good intentions but needs concrete results. On the other hand, it is also clear that changes are needed at a national level, and this is precisely why we wish to speak to Sr. Pons. We are going to ask Sr. Pons if legislative changes can be made at a national level which guarantee fair and prior compensation if a house, purchased in good faith, is demolished.”

We are reminded that The Spanish state can implement these changes, not the Andalucian Community (rights to property are within State competence not autonomous competence) and that the PP runs the government.
 

Hosteltur, a news-site for tourism, runs an interesting article on the 2013 preferred provinces for foreign home buyers (Alicante at 40.5% leads), and their nationalities. The British remained the largest foreign buyer in Spain, at 15%, followed by the French at just under 10%, the Russians at 8.5% and the Belgians at 7.3%. The Germans are in fifth place at 7%. It seems that 11.15% of homes bought in Spain during 2013 went to foreigners.

...

Population

We begin with The Voice of Russia! - 'New figures show that tens of thousands of British expatriates are leaving Spain. Spain’s National Statistics Institute says that Brits are giving up on living in the country as work becomes scarce and property prices plummet. Is the Spanish dream finally over?...'.


Vozpópuli takes the bull by the horns: 'Farewell to our European Florida? The rise in taxes forces the British and Germans on the Spanish coast to leave. More than 20% of the Britons and Germans settled in Spain returned to their country in 2013, according to the census data produced by INE. Tax consultants on the coast blame the 'World Asset Declaration' and the rise in the IBI (rates) for the mass exodus...'.

'Going going gone? Many ex-pats are wondering if now is the right time to leave
Spain. - With British and German ex-pats leaving Spain in record numbers in 2013, The Local looks at the reasons for the exodus and ask if the dream of a better life in Spain really is dead in the water...'. Here.


My own rebuttal of this story of the '90,000' here at Spanish Shilling: '...the Ministerio del Interior recently ordered the Town Halls to check their registers – every two years for the foreigners and every five years for the comunitarios, the Europeans who walk among us.
So, those 90,000 absent Brits, rather than leaving last Saturday after the Match, as has been suggested by the Telegraph (
here), have in fact tended to fade away over the past five years – sometimes returning to the UK, sometimes going forward to another country or destination within Spain, or sometimes by quietly dying!...'.


For Goodness sake, don't tell the Spanish authorities, but...  'Despite recent reports in the UK press, Spain is still the most desired country to live for Brits at 13%. It also emerges that 12% of Brits are considering emigrating, with the country’s ‘broken society’ their biggest concern, as well as the weather, crime rates and the costs of living. While the UK was named the worst country for quality of life in Europe by the uSwitch survey, Spain emerged proudly in second place, behind only France...'. From The Olive Press.


...

Finance:


The May Day marches: the CCOO and UGT unions campaign motto 'Without quality employment, there's no recuperation'. Marches are planned in 67 towns and cities.

 

'Spain continued to shed jobs in the first quarter of 2014 despite signs of economic recovery. The pace of job destruction was slower, however. Figures released on Tuesday by the National Statistics Office (INE) show that the number of those in work fell by 184,600 individuals in the first quarter to 16,950,600, which is one of the lowest employment figures in Spain since 2002. The jobless rate in March reached 25.93%, 0.2% higher than at the end of 2013...'. From El País in English.

 

'Spain’s gross domestic product (GDP) will grow an average 1.5% in 2014 and 2015, said Economy Minister Luis de Guindos on Wednesday. “Everything indicates that the Spanish economy’s recovery continued in the first quarter of the year,” he added. De Guindos claimed that for the first time since the crisis began in 2008, there will be “a sustained recovery” and net job creation that will be “relatively significant” over the next two years...'. Story at El País in English.

 

'According to the bank of Spain, the Spanish economy continued to push forward with its recent expansion in the first quarter, and it do so at an accelerated rate, growing by 0.4% over the previous three months. This is certainly good news for everyone in Spain, and there is no doubt that this is the strongest expansion in economic activity since the crisis started. The economy also grew by 0.5% over a year earlier, the first time it has done this in nine quarters...'. From Edward Hugh's Spain Economy Watch. 

 

'The government has promised to create 600,000 jobs between 2015 and 2016 despite admitting that employment would not return to the levels it inherited when it came into power in 2011 until 2018, three years after the current legislature ends. According to the macroeconomic framework approved by the Cabinet on Wednesday, employment will grow 0.6% this year, 1.2% in 2015 and, in 2016, hopefully pick up steam with a rise of 1.5%, always in terms of the national accounts...'. From El País in English.

 

The future of wind energy in Spain is examined by the BBC: '...For the first time in Spain's history, wind contributed the same proportion (21%) of electricity as nuclear last year, according to Red Electrica de Espana (REE), Spain's national grid. Both now contribute more than any other power source. This record feat appeared to confound the energy sceptics, who have argued that low-carbon renewable energy production is too intermittent and expensive to be a reliable alternative to coal, gas and nuclear...'.  As somebody said (I think in The Spectator), it's funny with all these wind turbines creating all this electricity, that not a single coal-fired power station has been closed down!


'...Spain is impoverished and in bankruptcy. Monday it emerged that Renfe-Adif has "buried" 435 million euros in a useless tunnel for the AVE Murcia-Almeria route and another 288 million on the Malaga-Sevilla track without anyone responsible for this being banged up in prison. The order from the Government is emphatic: we are to whistle and sing of the economic recovery of Spain despite the six million unemployed and the daily dramas of its citizens with problems of work, housing and even food – even children's food!...'. An excerpt from a bitter essay at El Espía en el Congreso.


Interested in the Costa del Sol? The Olive Press Road-show: 'A great opportunity to get wise. With hopefully the worst of the economic woes now behind us, now is the time to be planning for a brighter future. For a decisive insight into every aspect of the Costa del Sol business arena, the Olive Press Road Show will bring together for the first time key speakers able to provide incisive easy-to-follow presentations on seven topics...'.


...

Politics:

 

'In a bid to garner international support for its campaign for a referendum on independence for the region, the Catalan government has set up a website called www.cataloniavotes.eu in French, German and English. The site argues that the sovereignty process is not simply politicking, but reflects the broader wishes of the people of Catalonia. Aside from making the case for independence and providing background on the process, the site includes lessons on Catalan history, as well as an overview of the region’s culture. There are also interviews with politicians and figures from public life, who explain why they support independence...'. From El País in English.

 
'"En mi puta vida he cobrado un sobre" - in my effing life, I've never taken a 'brown envelope'', said the Vice-President of the Government Soraya Sáenz de Santamaría to reporters on Tuesday – just to clear that up. Found at Europa Press.

…...

European Elections:


Thanks to an article in El Huff Post, we find that there are 41 parties to chose from in the upcoming elections on May 25th (later dropped to 39, see below). These include a feminist party (Iniciativa Feminista), a party for the disabled and those suffering from rare diseases (Agrupación de Lectores D.E.R.), a party to protect animals from mistreatment (Partido Animalista), the far-right old fashioned Francoist F.E. de las J.O.N.S. (Falange Española de las Jons),  Spain's answer to UKIP: Por la República, Por la Ruptura con la Unión Europea (RRUE), the Pirates (Conferedación Pirata), the eccentric judge Elpidio Silva's RED party (Movimiento de Renovación Democrática), and the Green Eco-Pacifists (Los Verdes Ecopacifistas) who probably would like to knock your house down.

If these weren't enough choices, one can also vote with an empty envelope (el voto nulo) or, by staying away (la abstención). In fact, there's even an empty-envelope party (Escaños en Blanco), where you vote to show you don't like any of them. Both of these somewhat negative strategies of course help the major parties.

In Spain, you vote for a national list. The more votes, the more people from the list that are elected. By being somewhere in the top twenty names on the PP or PSOE lists, you can be assured of a new job and are already packing the suitcases. The MEPs representing Spain will, of course, be representing Spanish interests, but not necessarily the interests of those who live in Spain...

Naturally, following the ludicrous boy/girl rule of the last PSOE Government, the lists must be divided correctly on gender lines. Thus the Feminist Party, for example, has a surprising number of gentlemen featured on their list (heh!).

*Sad to say, two of the above clutch of parties have been removed from the final list approved by the Junta Electoral Central: la Unidad del Pueblo Canario and the Verdes Eco-Pacifistas, leaving us with a mere 39 parties to chose from. Update found at El Mundo (Tuesday).

...

Various:

 
El País in English tells of the prostitutes that serve the invernaderos, the plastic farms of Almería. 'No way out for Almería’s prostitutes - Hundreds of women are working in virtual slavery in brothels throughout the province. Trapped by their debts to traffickers, they have seen their conditions worsen with the crisis'. Story and pictures here. Meanwhile, Almería Confidencial talks of the 'Dark Side of the Economic Miracle', an exposé of the cost in human and environmental damage caused by the plastic farms that cover some 30,000 hectares...

 

'Children will be legally obliged to do housework and respect their school teachers under a new draft law approved in the Spanish Parliament on Friday. Spanish parents and school teachers may soon have a new weapon in the battle against disobedient children after ministers approved a new draft Child Protection Bill recently. If the law is passed, children under 18 in Spain will be legally obliged to do household chores "in accordance with their age and regardless of their gender"...'. From The Local.

 

'Sometimes Spain will shock you with its inefficiency and sometimes it will shock you with its efficiency. For example, Spain's system of taxation is generally considered inefficient, whereas The Traffic Police are very impressive at relieving you of cash for offences that only exist in Spain. This might be because they have cars and the tax inspectors sit in offices...'.  This from Colin Davies' list of differences between Spain and anywhere else.

 

An article about the aftermath of the earthquake in Lorca (Murcia) in May 2011. From El País in English. 'Less than five percent of those who lost their homes have been re-housed'

 

Following from a piece in last week's BoT about vulture funds buying certain Madrid VPO's (council houses) properties, here's a video of an American fund called Blackstone-Fidere

ejecting a non-paying tenant, with the help of fifty cops!

 

The Spanish Economy
 

By Andrew Brociner


More on Deflation

 

Last week, we talked about the consequences of deflation and made a comparison between Spain and Japan. The remedy that has been tried unsuccessfully in Japan is to generate inflation, and make real interest rates negative. This would induce an ageing population to save less, because it is more costly, given the negative real interest rate, to hold on to savings, and consume and borrow more, again because it is worthwhile to borrow at negative real interest rates. The problem is that this has not worked in Japan since inflation has never really been produced sufficiently to make expectations of future inflation a perpetuating reality. People have not seen inflation last, only attempts at it, and so they continue holding on to their savings, they do not borrow and companies do not invest, given the lack of demand, as there is low consumption.

 

The demographics of the Japanese problem, with an ageing population, and declining workforce, is similar to what we may see in other countries, including European ones. Standard macroeconomics is ill-equipped to deal with these demographic problems, as what we have been seeing for many decades is much the opposite: rising populations, high growth and high inflation. Central banks have been more concerned with fighting inflation and influencing expectations in that sense. Now we are in a situation in which with diminishing populations, low growth and possible deflation, the ECB is ready to lower interest rates even further and pursue expansionary monetary policies in general. But we are in a new era due to demographic realities and we do not know if these policies will be enough. Certainly, the Japanese experiment, over the last two decades, has shown us that it is not enough.

 

Some European countries could get caught up in a spiral of deflation, declining real wages, low consumption, low investment and low growth. In Spain, this is certainly a possibility. Many of the elements are already in place in Spain: an ageing population, a diminishing workforce, low fertility, low immigration and, in fact, emigration, declining real wages, declining real pensions, low consumption, low investment, high unemployment and the prospect of deflation. There are no visible avenues for demand at the moment as consumption remains very low for all of the reasons just stated, plus the lack of credit offered by banks or the demand for it from households or businesses. This lack of demand impedes growth from taking place and meanwhile, the debt keeps on climbing, just as in the Japanese case.

...

Finally:


You can hear the BBC's Radio 4 play 'Demolition', about Thomas, a British ex-pat living on the Spanish coast for almost 20 years, who is suddenly threatened with the imminent demolition of his beach-front home when the local authority declares the development illegal ahead of elections.  The Spanish website El Indálico discuses the importance of this play, written by a Spaniard, broadcast on British radio, here.

Note: The last day to hear this radio play is today, Thursday...



Business Over Tapas

A digest of this week's Spanish financial, political and social news aimed primarily at Foreign Property Owners:

with Lenox Napier and Andrew Brociner

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 1 May 2014            Nº 066

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