Enviado por José Antonio Sierra
Spain today by Lenox Napier
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: businessovertapas@gmail.com
Note: Underlined words or phrases are
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28 January
2016 Nº 145
Editorial:
There are, for the
purposes of this editorial, two types of property, or, as the slightly archaic
word has it, dwellings. Those that are preferred by expatriates, or
holiday-home owners, such as beachfront homes, apartments in urbanisations,
farmhouses, village homes and so on, based around the relatively unimportant
towns of Estepona, Marbella, Mijas, Mojácar, Altea, Jávea, Rosas, certain Island
villages and many other delightful resorts and towns located near the coast
(the comfortable equivalent, in British terms, of owning property in Middle
Wallop or Henley on Thames) and, in the other corner, the rather larger market
which is the apartments that makes up and surround Spain’s cities. How many
expatriates live in high-rise blocks situated on the edge of Burgos, or Cuenca,
or indeed Madrid? Spanish indicators, such as Tinsa, or the information from
the notaries, are skewed understandably towards this second type of property.
But perhaps demand and growth go more or less hand in hand. There are both the
bad times and the good times.
However, perhaps a
‘bad time’ is coming for the expat market. We simply don’t know what might
happen if the British people decided to leave Europe in the referendum, which
might be held this year, or if not, in 2017. If they left – if ‘Brexit’ came to
pass – together with a messy combination of anti-foreign legislation in London,
a populist government in Spain, political confusion about Gibraltar and some
simply bad choices from ‘the top’, we might find that the first kind of property,
as mentioned above, would experience a sharp drop in value following a partial
exodus of British citizens from Spain: a drop which would be felt by all
expatriates, not just the British ones. For those of us who live in this
beautiful country, that might not necessarily be a problem, but for those
considering buying here, it could be a reason to wait for another year, or to
rent, or to just pay a deposit. Only to be ‘safe’, that’s to say, because we
just don’t know what is going to happen: all we know is that there is no one
out there to argue our case.
…...
Housing:
Cheery news from
Ibiza: ‘International demand for property in Ibiza, Spain, is set to “explode”
over the next five years, says a leading Spanish agent. Regional directors at
leading independent real estate agency, Lucas Fox International Properties,
predict that 2016 is likely to be a positive one for the country’s real estate
sector, following several years of downturns. But now the market recovery is
well underway and gaining momentum, local buyers are returning to the market,
unemployment continues to fall and the economy is set to be the fastest growing
of the “Big Four” euro economies over the next two years, according to the
International Monetary Fund..’. Found
at OPP Today.
From
Eye on Spain: ‘Spanish property is undervalued
by 26%. According to the Organisation for Economic Development (OECD), property
prices in Spain are undervalued by 26%, whilst prices in the United Kingdom are
7% overvalued. The research by the OECD has been running for the last decade
and examines property prices against wages in each country. It then compares this against the long term
average for each country...’.
The Diario Sur reports
that the east Málaga home-owners association SOHA (Save Our Homes Axarchía) intends to take their cause – their
homes, built and paid for in good faith, were afterwards ruled as ‘illegal’ –
to the United Nations. The SOHA page
is here.
In an
article called ‘Owners of tourist apartments at risk of exploitation’, the
‘Canaries story’, reported in the BoT
last week, appears in some detail at Mark Stücklin’s Spanish Property Insight following a local decree which ‘...prevents
owners of tourist apartments (apartamentos
turísticos) and bungalows in some tourist complexes from enjoying their own
homes for personal use, and forces them to cede the rental management to one
operator for the whole complex. Owners who refuse can be forced to sell to the
operator at a price determined by the latter, and also face fines of up to
€300,000...’.
‘Spain's Banco
Popular is considering selling up to 8 billion euros worth of real estate
assets in 2016 to reshape its balance sheet, a source familiar with the matter
said on Wednesday. The Popular, Spain's seventh-largest bank by market value,
is the most exposed to the property sector of any listed Spanish lender...’. Found
at ETRealty.com
…...
Tourism:
Hotel prices are
well up these days, says
El País, with the average charge at
almost 79 euros for a room, up nine euros over 2010 tariffs. 308 million people
slept in a hotel in Spain in 2015. The cheapest hotels are in Castilla-La
Mancha, with the average price of 54€ per room (figures from the always
reliable INE).
From Molly: ‘The
36th edition of FITUR Madrid held from 20th -24th January 2016. This travel and
tourism fair is one of the largest fairs in the sector. This major trade fair
highlights the contribution of Travel Bloggers with the FITUR #Travelblogger
award. The 2016 award for Best Content was presented to Molly Sears-Piccavey in
Madrid on Saturday 23rd January. Piccavey.com
was selected by an external panel of experts in the industry. The blog was
chosen for its quality, the frequency of publication and the innovate use of
content. Molly Sears-Piccavey from Nottingham, UK has been living in Spain
since 1998. The blog shares tips and experiences on expat life and travel
around Spain. As a bilingual speaker she is immersed in Spanish culture and has
a real passion for travel’. Our Congratulations.
…...
Finance:
So, what with all
of this political uncertainty, has foreign investment in Spain fallen? No, says
El Diario. The gloomy news put out
in the mainstream press is more to do with scoring political points, and preserving
the option for a government with the Partido Popular.
‘Things are not
looking good for Grupo Actividades de Construccion y Servicios SA (ACS), the
world’s biggest international contractor...’. From
Wolf Street.
From
Typically Spanish: ‘Brussels has
alerted that the elevated public debt in Spain will require ‘a significant
fiscal adjustment’. The report ‘2015 on Fiscal Sustainability’ published on Monday
considers the Spanish economy is showing ‘vulnerability’ for the high debt. The
European Commission estimates there is a 40% chance of the public debt being
higher in 2020 than last year; and could reach a maximum of 101% of GDP this
year and 100% next...’.
In the first half
of 2015, Spain exported armaments to Venezuela (13 million euros), Saudi Arabia
(447.6 million euros), Egypt (over 100 million euros) and to Iraq (37.4 million
euros), says Nueva Tribuna here.
A fuller list, for 2014, from El Huff
Post, here.
…...
Politics:
One of the most
remarkable laws in Spain (and another good reason why we need a new government)
is the 'decreto de autoconsumo',
better known as the 'Sun Tax', which puts all and any inconvenience in front of
solar panels, and any other alternate energy used privately to cut in any small
way the profits demanded by the power companies. In Spain, solar energy is a
'slam dunk', but you won't find it being used by householders as the threat of
massive fines for improper use make it more or less impossible, short of going
entirely 'off the net'. Podemos - the party that wants to stamp out corruption
in Spain - has proposed
a bill in Parliament to repeal this law, removing 'all administrative or
economic obstacles and techniques to the orderly consumption of electricity
that have no justification'. We look forward to hearing the arguments in favour
of the Sun Tax as proposed by the acting Minister of Energy José Manuel Soria.
As the Left dukes
it out, so too, does the Right. El País
reports
that Rajoy and the leader of Ciudadanos, Albert Rivera, are in discussion to
see what might be done to form a government. Unfortunately for them, the best
route would appear to be with the PSOE as a partner. However, Telecinco says
that Felipe Gonzalez is in favour of a PP/Ciudadanos coalition minority
Government, with the PSOE abstaining! Better than going in with Podemos, he
claims.
Propaganda, lies
and misstatements seem to sum up the ‘Establishment’s’ actions against a
possible pact between Podemos and the PSOE, says El Diario here
and here.
We have certainly seen some good ’uns, including endless Podemos links to Iran,
Venezuela and the ETA, and culminating in a
tweet from a PP deputy showing Podemos women relieving themselves outside
the Amudena Cathedral (turns out, it was a photo about an unrelated Argentinean
protest in Buenos Aires).
El Huff Post has a list of possible
successors to Mariano Rajoy. These are Soraya Sáenz de Santamaría, José Manuel García-Margallo, Alberto
Núñez Feijóo (our favourite), Alfonso
Alonso, Cristina Cifuentes and María Dolores de Cospedal.
The Nobel Prize
for Economy Joseph Stiglitz doesn’t mince his words: ‘What they’ve done to the
Spanish is a disaster’. ‘With the politics of austerity’, he says, ‘whole
families have been broken asunder’, he claimed at the Economic Forum in Davos
last week. Story here.
…...
Corruption:
The Guardia Civil arrested
on Tuesday the man who was once president of the Valancia ‘diputación’ (county council) and president of the provincial
Partido Popular, Alfonso Rus, in his home, as part of the investigation into
the Caso Imelsa. A search was also made within the offices of Rus’ building
company in Játiva, Valencia. Further searches were made in several other
locations, including the offices of the PP sponsored Ciegsa, which builds
schools and is alleged to have misspent millions of euros of public funds. El País reports
twenty four arrests, of which eight are PP politicians (14 had been released
by Thursday morning, pending further investigation). Here
we see a video of Rus saying ‘The communists who shopped me will be blown up’ (Translation... ‘strung up’, maybe). Yo
Me Tiro al Monte says
that the police have also blocked 252 bank accounts and confiscated 150
high-price cars. Lastly, an embarrassing few moments on a
video: ‘I love you Alfonso (Rus), I love you, you bastard – your success is
my success!’. Mariano Rajoy in a June 2007 public meeting.
The big fish in the Valencia pond, now in the Senate in Madrid and
protected by immunity, is Rita Barberá. Two articles here ask: can she be interrogated?
‘Rita, now we must talk about you’ from
El Ventano and ‘Would Rita Barberá be arrested if she wasn’t protected
by the laws of immunity?’ – at La Sexta (video report).
El País in English explains the aforamiento
‘immunity’ laws here.
El País has
the names of some senior political figures entwined in the Acuamed scandal. It
also reports that 40 million euros were paid irregularly to the builder in
connection with an incident at the desalination plant in Cuevas, Almería, in
2012. La Ser runs
a story saying that the ex-Minister for Agriculture and current European
Commissar Miguel Arias Cañete knew about the Cuevas ‘extra payment’ to a
building company. Arias Cañete denies any connection with the Acuamed scandal. Cuatro also has the
story.
There are three Acuamed plants in Almería, and Almería Hoy claims
that the over-cost on the construction of these three was in the order of 200
million euros. The PP deputy and spokesman for his party Rafael Hernando blames
the previous PSOE administration for the situation.
The Partido Popular – the entire party! – has been indicted (the new word
in Spanish is ‘investigado’) over the
destruction of the hard drives on the ex-treasurer Luis Bárcenas computers. And
who made the complaint? Luis Bárcenas himself! The PP had told Judge Pablo Ruz
that the computers had been rendered useless back in 2013. More
at Cadena Ser. A journalist called Iñaki Gabilondo asks of the PP on
video here,
‘...they talk of ‘isolated cases of corruption’. But how many isolated cases
must there be, before they are no longer ‘isolated cases’?’
‘The Supreme Court
has demanded Bankia repay two small
buyers in a ruling that could pave the way for thousands more to lodge claims. The
ruling was made following ‘serious inaccuracies’ in leaflets advertising the
bank’s stock market launch in 2011. The two investors ploughed in €9,997 and
€20,868 to the bank, which received the bulk of a €22 billion government
bailout in 2012. The move means thousands of customers who bought the preferred
shares could be in line for compensation...’. From
The Olive Press.
Spain is in 36th
place in the Corruption Perceptions Index 2015, with 58 out of 100 points. The
scores were released on Wednesday by Transparency
International here. El Mundo comments on the ‘results’ here.
…...
Catalonia:
In Barcelona, the
Mayoress is Ada Colau, who has become something of a celebrity in Spanish
politics – perhaps even the acceptable face of the anti-establishment Podemos
and their imitations. Colau, who comes from a local party called Barcelona en Comú, which joined a group
of other small parties under the name of En
Comú Podem, wants to start a new major left-wing party in Catalonia with
‘no more coalitions or jungles of letters’, she says. Story
in El País.
…...
Waste:
From a site called Hartos – A
list of things that cost more than they’re worth:
1. Centre for the
Creation of the Arts in Alcorcón (CREAA). 90 million euros so far. Unfinished
and work stopped.
2. Setas
de la Encarnación (a park) in Seville. 102 million euros.
3. The tram system
in Parla, Madrid. 255 million euros, 134 cost with the rest in interest
payments.
4. Castellón
airport. 170 million euros. Unused.
5. Caja Mágica (multiuse
tennis stadium) in Madrid. 300 million euros.
6. City of Culture
in Galicia. Over 300 million euros. Finished as a smaller project
7.
Palacio de Congresos Ciudad de Oviedo. Over 360 million euros.
8. Terra
Mítica, Benidorm. 400 million euros. Sold for 65.
9. Reform of the Palacio
de Cibeles, the new town hall of Madrid. 500 million.
10. Ciudad
Real airport. 1,000 million euros. For sale.
11. City of the
Arts and Sciences, Valencia. 1,102 million euros. 20 times the cost of a
mission to Mars.
Those expensive
court cases against malefactors in Seville. The first people to be impugned in the
ERE investigation are now close to having all charges dropped, since time has
run out. ABC says
that a number of businessmen, responsible (allegedly) for misappropriating 855
million euros over ten years ago, will soon be able to breathe freely again.
…...
Brexit :
‘Goldman Sachs makes large donation to
anti-Brexit campaign. Bank donates six-figure sum to the campaign to keep
Britain in the EU amid fears of economic disruption. U.S. investment bank
Goldman Sachs donated ‘hundreds of thousands of pounds’ to the British campaign
for staying in the European Union, according to media reports. The move
reflects concern among executives on Wall Street about the disruptive impact a
‘Brexit’ could have on the global economy...’. Found
at Politico.
An interview
with Noam Chomsky: ‘Is European
integration unravelling?’ From Truthout.
From the Heute Show on ZDF, the Germans have some fun with the
British exit from the EU. (German with English subtitles).
…...
Various:
According to the
always reliable INE, the statistics agency, the number of foreigners living in
Spain is falling. The padrón, the
town hall register that is often avoided by Northern Europeans, particularly
the British, who say they ‘want to keep off the radar’, for January shows a
drop over last year of some 300,000 to around 4,720,000. There are (apparently) 282,120 Britons living in
Spain and 130,505 Germans. El País
has the
story. The problem is - the Spanish believe all this as Gospel (The Independent says
that there 'could be as many as 800,000 Britons living in Spain’. April 2015).
Bullfighting is
getting bad press, it appears – and a new platform to promote the spectacle is
being set up by supporters of La
Tauromaquia. Details remain sketchy, but the ABC enthuses
nonetheless... Bad press indeed – as a bullfighter poses with
both a bull and his five month old baby daughter. The ‘Defensor del Minor de
Andalucía’ has opened a
case against Fran Rivera as other bullfighters pose with similar
photographs in solidarity.
It’s one thing
when evildoers make their own forged currency – it’s one way of making money, after all – but quite another when
the State makes its own tin coins. This apparently happened in Spain at the end
of the XIX Century as the economy was in tatters. In those times, coins had to
be made of their approximate value in metal. Gold was in short supply, so major
coins were minted in silver, worth at the time more or less their face value, including
the five peseta ‘duro’. The price of
silver was however falling, which was good news for the coin-making Government,
which was able, briefly, to show a profit on its minting. Soon the public
became aware that their coins held less than half their real value, so
counterfeiters started making real fake coins,
since they were worth relatively little to produce. One such dodgy coin-maker
was arrested in Seville, giving rise to the Spanish expression to be as false
as a Seville shilling – ‘más falso que un
duro sevillano’. Indeed, false coins became known in Spain as ‘sevillanos’. Alarmingly, even the Banco
de España couldn’t tell the real coins from the fake ones and, in 1899, Spain
stopped producing silver duros. In
1908, the coins were recalled (around 1500 million of them, including an
estimated 400 million false ones). The
story is told at Memento Mori.
Unemployment
rates, by country. ‘A reminder of which
European economies have inflexible labour markets’. A graphic
from Paul Kirby shows Spain as way below the OECD average of 6.7%. Spain runs
at 21.8% - and Andalucía, not shown on the graphic, runs at 31.7% (here).
‘Cochineal fly is
perfect for killing off an invasive plant’, says the
headline for a back-copy of Quercus,
the environmentalist magazine. So scientists introduced the fly into prickly
pear plants (chumbo), in Castellón
two years ago. Another source says that
the fly was bred in Tenerife as long ago as 1825, to harvest the cochineal
colour for food and clothes-dying. The fly is now lose across southern Spain
and has been highly successful at its primary function, determinedly destroying
the landscapes across Murcia, Almería, Granada and now
Cádiz. The ‘invasive cactus’, by the way, was brought back to Spain by
Christopher Columbus, some five hundred years ago. The fruit (higo chumbo or tuno) is
used for eating and is also distilled as a type of brandy. A useful guide
to the chumbo comes from an
article from Murcia dated 2011. A local hunter tells BoT that the fly is spread by birdlife! Meanwhile, Equo, an environmentalist political
party, lays the
blame for the cochineal fly tragedy at the doors of the town halls (!). They say the public has not been
told how to deal with ‘the plague’. The ecologists helpfully add that you
should wash the plants with a high-pressure jet of soapy water every few weeks.
Probably does wonders for the fruit, as
well.
From
Orgullosos de Jaén, the biggest
man-made forest in the world is the 64 million olive trees growing in Jaén:
half a million hectares of them.
The cost of tap
water varies from city to city, with some customers paying as much as 350% more
than others – an annual difference says Facua,
the consumers association, of over 450 euros. Murcia followed by Barcelona are
the most expensive, Valladolid is the cheapest. The report is published in El País here.
A company called
‘Destrucción Confidencial de Documentación’ reports a brisk trade in their
shredding of documents service as certain ministries worry about an imminent
change of masters. El Espía en el
Congreso reveals
all.
Cola Cao or Nesquik? Twenty Spanish
chefs declare for their favourite chocolate (Video here).
You can vote too!
Thieves have
stolen the famous first century Medusa mosaic centrepiece of the Villa Romana
del Río Verde in Marbella. Story here.
The Villa Romana in
English.
From
The Local: ‘US taxes and FATCA: 'The
time for hiding is over'. Since July 2014, the five-letter acronym has
instilled dread in the hearts of American expats all around the world...’..
…...
See Spain
From
The Local: ‘Nine charming Spanish towns to visit before the tourists
come. Nine Spanish towns have just been added to the prestigious list of the
"most beautiful towns in Spain". So get your skates on and check them
out before the hordes of tourists descend...’.
Pals, a beautiful
medieval town in Catalonia. Story and pictures here.
…...
Deflation
by Andrew Brociner
As we have seen in
a few issues, there is a deflationary phenomenon in Europe and periodically, we
check its current state.
The period of
declining prices in Spain has continued for over two years, with negative
values of inflation being registered in almost every month for over a year now.
This trend is not really showing any signs of reversing for the time being.
Price inflation in Spain is consistently below the European average and one of
the lowest in Europe, along with Greece and Bulgaria. But Greece has recently
improved its inflation numbers and is now in a better position than Spain.
The ECB has a
mandate to maintain inflation around the 2% level, deviations below this
causing lower inflationary expectations and thereby putting off purchases. The
European average over the last year has been slightly less than zero. The
Central Bank is well aware too that any prolonged period of deflation, such as
we have been witnessing recently, could, by expectations feeding onto
themselves, produce a downward spiral on prices as took place in Japan for a
very long time and with no effective remedy as all attempts to boost prices there
had no effect.
With this in mind
and to avoid this scenario, the ECB has been in expansionary monetary policy
mode and is likely to remain there for the foreseeable future. And with the
inflation data coming in, the picture is not really getting much better. While
there seemed to be some signs of improvement last year, prices then started
declining again. So, clearly, we are not out of the situation yet.
Prices continue to
be low notwithstanding the depreciation of the euro against the dollar, from
1,4 in May 2014 to its current rate of less than 1,1 – which makes imports
higher priced and increases the overall inflation level. In addition, the oil
price has been tumbling tremendously recently and this has impinged on the
downward trend in prices. As the inflation numbers for Europe still remain
around zero, the ECB might find itself under renewed pressure not only to
extend, but also to boost its current quantitative easing programme. As Draghi
has stated, the programme will be reviewed in March. Therefore, given the data,
we can expect more quantitative easing and low interest rates for some time to
come.
…...
Finally:
Enrique Iglesias and Juan Luis Guerra perform ‘Cuando Me Enamoro’ on YouTube here.
Oh, and Chuck sent us this! Heh!
…...
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