Monday, April 07, 2008

Crisis? What Crisis!

The ‘building crisis’ is affecting Spain. From a country that apparently built more houses in the past few years than Britain, France and Germany combined, Spain has moved to a country that is in a deep and probably extended crisis. All this in just a few months. The reasons given – if the Spanish authorities even admit to the deep problems which are so much in evidence – are all to do with exterior forces. The sub-prime rate; cheap mortgages in America; the high value of the Euro against the Pound; the war in Iraq, the price of petrol and so on.
But, the fact is, Spain just built too many houses. If I might distinguish ‘proper’ houses from ‘holiday homes’, I would say that the average (overpriced) apartment in, for example Madrid, is now almost impossible to sell and many property agencies are now closing their doors. Prices need to fall, according to economists, by around 20%, but it’s always easier to hold on… just a bit… longer.
With mortgages drying up, foreclosures, debts falling due, massive layoffs in the workplace (a forecast of as much as a million more to join the ‘unemployed’) and the cost of living in Spain rising by over 4% annually, many householders are feeling the pinch. To be obliged to take a bath of twenty percent on a major investment like a home – even if a buyer could be found – is a depressing situation to be in.
Meanwhile, many of the largest construction companies in Spain are either going spectacularly bust, or they are busy building urbanisations and tower blocks in places like Morocco and Brazil.
Then we come to the problem of the costas.
Spain has never seemed to recognise the large amount of money which is pumped into the country by the foreign residents: particularly los europeos. There are something over a million northern Europeans living in Spain, many if not most living on pensions from abroad. These settlers have bought a house, bought a car, furniture, white goods and so on. They buy food, clothing and a few gins and tonics all on money continually being brought in from their own country. Most banks in Mojácar, where I live, will admit that around 75% of all of their clients are from Northern Europe. One study suggests that just the British residing in Spain bring in to the country six billion euros a year.
In exchange for some sun and a little peace and quiet.
But, things are far from peaceful and quiet. Not only has a British-owned house in Vera been very publicly demolished – like a bolt of lightening from Seville – but now it appears that some of the British who bought their homes in good faith, with no thought of their life’s savings being in any way under threat, are now living with the very real concern of being reduced to living in a tent. There won’t be any compensation if this happens as most companies here are registered with a capital of just 3,000 euros. The government won’t pay out in some spectacular gesture of kindness and any claim under law is treated here practically with derision.
Which is why the Northern Europeans need some representation in Spain – an almost impossible ambition. There are, it is true, a couple of foreign councillors here and there: Almería has two, one in Zurgena and the other in Mojácar. They at least are keenly aware of the concerns of the foreign householders. There is a local political party, ‘Ciudadanos Europeos’, which seeks to look after the interests of this powerless yet wealthy group and there is the ‘Abusos Urbanistos – No’ based in Valencia, with a local group in Albox – which is doing sterling work in defending the europeos and reporting property concerns to the European Parliament.
Spain, heedless of the monies coming in from London and Berlin, is now apparently determined to kill the golden goose. We are now faced with even more obligations to get onto our town hall registries than even the immigrants from the Third World. We no longer have ‘residence cards’ but must carry a wallet of paperwork for identification. Wasn’t ‘Europa’ about union, protection and ease?
The number of people coming out from Northern Europe is drying up anyway, but now they are concerned with not losing (what’s left of) their money. They’ve seen the reports of the British and German television and read the papers in Norway and Belgium. They know and they worry about 'illegal' homes, demolitions, expropriations, 'land grab', scams, fraud and other property questions. Perhaps they’d be better off living in Cyprus!
Recently, the mayor of Torre Pacheco in Murcia was arrested for granting illegal licences. Another mayor in Huelva is now behind bars. Practically the entire Marbella town hall has now ‘done time’. Locally, the mayor and several other professionals in Zurgena spent a few days in jail last week and are now under investigation. Other towns, including some controlled (or should that read ‘protected’?) by the PSOE are similarly full of illegal homes: Carboneras, Albox, Huercal Overa and Arboleas…
Recourse under law? There are currently over 1.5 million court cases in the system. In Andalucía the courts are so broken down that a leading judge has said it could take years to fix, but ‘only if we adopted a more efficient and European system of justice’. Fat chance! On top of that, Spain is just coming out of a sixty day strike for the funcionarios de justicia – the secretaries and gofers in the justice system. Add at least another year onto your court case.

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