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
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!...'.
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
email:
lenox@businessovertapas.com
1 May 2014 Nº 066
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