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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
For
subscriptions and other information about this site, go to
businessovertapas.com
email:
lenox@businessovertapas.com
24
October
2013 Nº 041
Editorial:
Forget
the 'green shoots of recovery', if you believe the bankers, Spain is
the very place to invest in. To prove it, Bill Gates is on the front
pages after buying a share in a massive Barcelona based building
company. The real estate market, so say the salesmen, is at an
optimum time to buy as well. Oh, things are good again, with Spain
officially out of the longest recession ever during 'the democratic
years' (with a positive growth
of 0.1% in the third quarter). The Minister for the Economy, Luis de
Guindos, recognises
the news as 'the first, timid, small step out of the current crisis'.
The bankers are ebullient, the politicians cautious, but the general
public remains in the doldrums, with massive unemployment, poverty
and the uncertainty of a better future.
…...
Housing:
From
The Telegraph - a
quote
from the owner of one of the Cantoria homes: “It
is unbelievable that at a time when Spain is suffering such a deep
economic crisis and high unemployment and needs tourism and foreign
investment the authorities would do this,” said Mr Brooks. “It
sends a message. Do not buy in Spain.” The
news of the demolitions also appears in The
Times,
The
Daily
Mail
and The
Express.
1,
2
and 3
while La
Voz de Almería
carries the headline
on Saturday: 'The demolitions in Cantoria explode across the British
press. Newspapers with millions of readers publish full reportage
about the demolitions'. Indeed, even Online
Nigeria
offers stern disapproval
of the Spanish behavior!
A
full-page article which oddly doesn't appear on the Internet from
Monday's Andalucía edition of El
Mundo
explores the local British concern over the demolitions on the part
of the Junta, which are thought to be 'haphazard' – decided
according to political concerns rather than ecological or judicial
ones. The homes were bought in 'good faith', continues the article (a
point accepted by the judge who ordered the Cantoria demolitions),
yet the builders have managed to elude any responsibility towards the
British settlers. Many of these settlers are 'trapped' in valueless
homes without water or electricity. The article finishes by noting
fresh tensions in the area and that the local British community is
criticizing 'the barbarous Spanish' in their local English-language
media. The British national press are also mentioned for their strong
criticism regarding the issue.
'It
got us into the crisis and now it's back to get us out of the misery.
In a country without industry, domestic consumption or available
finance for business projects, el
ladrillo,
the brick, is shaping up, six years after the bursting of the bubble,
as the only engine capable of attracting investment to the Spanish
economy.
After
closing the worst chapter of this financial crisis in 2012, Spain has
returned on the radar of foreign venture capital firms, investment
funds and large international investors willing to inject billions of
euros whenever they see an opportunity.
Neither
tourism nor exports, both boasted as triumphs by the Government, seem
to be in the eye of this new situation. That fresh new money that
wants to come to Spain and has returned optimism to banker Emilio
Botín has a clear target: real estate'...
'UK
buyers have always favoured France when investing in international
property, but Spain is swiftly closing the gap. According to mortgage
specialist Conti, 36 per cent of all enquiries received so far this
year have been for Spain, growing by three per cent on the same time
last year. Conversely, while French property made up 43 per cent of
enquiries, numbers actually declined by two per cent.
In
fact, Spain accounted for more enquiries than France during May, June
and July, demonstrating that the market remains a popular one and
confidence is rising. Things are certainly starting to look up for
the country's real estate sector and prices have started to bottom
out in certain parts if the country. Seemingly, Spain is now on the
slow climb to recovery and savvy buyers know that now is the time to
snap up property while it remains in low value territory'... From
Property
Showrooms.
'The
price of housing in Spain experienced a drop of 10.6% in the second
quarter, year-on-year, the highest amongst the countries of the
eurozone, according to data released last week by Eurostat. However,
this decline represents a slowdown compared with the year-on-year
fall of 12.8% recorded in the first three months of 2013.
Data
from the EU statistics office shows a fall of 0.8% in the house
prices in Spain, compared to the first quarter of the year, when they
fell by 5.1%, behind only the 2% quarterly decline recorded in the
Netherlands. In fact, the quarterly decline in housing prices seen in
the second quarter, the 12th consecutive negative quarter, is the
lowest since the fourth quarter of 2010, when prices fell by 0.1%'...
From
Kyero.
'The
depreciation of the value of one's home is passing an important bill
to most family economies. If the average value of a house in Spain
was about 320,000 euros at the beginning of the crisis back in
2007-2008, today this has been reduced by about 75,000€ to around
245,000 euros, with the fall of real estate prices'... From
El Mundo.
…...
Tourism:
'Spain received 48,800,000
foreign visitors through September, an increase of 4.6 percent over
the similar period last year, according to the Ministry of Industry,
Energy and Tourism... Just in September, Spain welcomed 6,500,000
international visitors, which is an increase of 4.7 percent compared
with the same month in 2012, and marked a new record high after the
one registered in August'... From
Almería Confidencial.
Visitors from the Nordic countries were up by 17.7% in 2013, at 3.6
million over the same time period. The British grew by 4.4% and the
Germans by 4%. The Italians – for some reason – were down by 10%.
'...The so-called 'industry without chimneys' provides 11 percent of
the gross domestic product of Spain and 11.4 percent of total
employment, says the tourist minister, José Manuel Soria'.
Almería
has also done well from tourism this year, with foreign visitors up.
The provincial tourist authority is nevertheless worried about the
impact on particularly British visitors following the recent
demolitions in Cantoria (and the threat of further action by the
Junta de Andalucía). The Patronato de Turismo de Almería will
therefore be at the London World Travel Market (4th - 7th November).
'We need to clean up our image, following on from the policies of the
Junta de Andalucía, in particular, towards British residents here',
says the Vice-president of the provincial diputación
Javier Aureliano García, an open critic of the Junta's actions in
Almería. From
The
Entertainer Online.
Ana
Pastor, the Minister of Development, revealed
on Monday in an interview with Cadena Ser that the Government had
completed "an agreement with a low cost airline" to operate
out of Madrid from 2014. A newspaper was quick to say that the
company in question is Norwegian Air Shuttle. The ABC newspaper also
maintains that Norwegian Air Shuttle is interested in 'opening new
national connections' as well as increasing its number of
international routes from its new base in Madrid. The airline flies
to Alicante, Málaga and Las Palmas, is also reportedly considering
opening routes to Barcelona and Tenerife.
…...
Finance:
'The
president of the Eurogroup of EU finance ministers insists that
“Spanish banks are better off than those of many other European
countries.” In an interview with EL PAÍS, Jeroen Dijsselbloem
radiated optimism about Spain’s economic future, asserting that the
bailout of the banking system will almost certainly not be extended
as initially planned, as banks seem to have regained access to credit
on the markets and provisioning needs appear to have been met. "I
am very optimistic about Spain," said Dijsselbloem. "The
industrial and economic foundations are there. And the reforms are
working. The improvements are there, even if the changes are still
not noticeable in the real economy. Unemployment is going down, the
recession is ending, exports are growing. I insist: I am optimistic
about Spain."... From
El País in English.
'This
is a time of extreme optimism. Yes, there may be twelve million
people living in poverty, a complicated deficit for the government
and so on.. but for the Chairman of the Banco Santander, Emilio
Botín, "now is a fantastic moment for Spain," because
"money is pouring in from everywhere".
According
to Botín, confidence in Spain has increased in a way which would
have been unimaginable six months ago as many now want to invest in
the country. In these positive terms, he spoke in a press conference
in New York to present the Santander brand in the United States.
"Everyone is interested in investing in Spain. Is reaching us
money in the stock exchange, to buy debt, to invest...", he
insisted.
'Microsoft
founder Bill Gates has snapped up a €113.5m (£96.2m) stake in
Spanish construction and services group FCC, five years after the
country's property bubble imploded. News of the deal after markets
closed on Monday night sent the shares soaring in early trade on
Tuesday, up nearly 12pc to €17.55. Shares had already climbed 5.4pc
on Monday before the deal was officially announced to the stock
market'... From
The
Telegraph.
The
New York Times
is similarly sanguine
about Spain: '...“The worst is over,” said Holger Schmieding,
chief economist at Berenberg Bank in London, in a note published
Wednesday, noting a turnaround in net Spanish exports'...
'The
government on Thursday unveiled its latest fiscal adjustment plans,
which entail finding 4 billion euros worth of measures for 2015 to
meet its target of reducing the budget deficit to 4.2 percent of GDP
from a projected 5.8 percent next year. The deficit target for this
year is 6.5 percent, with the government aiming to bring the
shortfall back within the European Union ceiling of 3 percent of GDP
in 2016'... From
El País in English.
'Recovering
Spanish carrier Iberia will return to profit next year for the first
time since 2010, the chief executive of its parent International
Airlines Group (ICAG.L) said.
The
Spanish airline became unprofitable in all markets, including
long-haul, following its merger with British Airways in 2011. It was
hit by competition from low-cost rivals and high-speed trains, labour
disputes and a recession that has left a quarter of Spaniards out of
work. IAG has spent around 700 million euros on restructuring Iberia,
which reduced losses for the first time in almost three years in the
three months to the end of June. "Iberia was in a significant
crisis but is well on the path to recovery. Iberia will be profitable
next year, like British Airways (BA) and Vueling already are,"
IAG boss Willie Walsh said at the Airport Operators Association
annual conference in London on Tuesday. From
Reuters.
From
Eye
on Spain
comes an article about the Spanish asset declaration for assets held
outside Spain. It also features this
question
POLL: 'Have you decided to spend less time in Spain because of the
new tax declaration of overseas assets?'.
The answer (by Wednesday evening) being 53.8% say 'Yes'. Perhaps
we should run this country for them?
A
comment from 'James' in the same feature is interesting: 'The Spanish
Government is looking for ways to fund its enormous tax deficit. With
so many Germans and Britons owning a Spanish property, they become an
obvious target. The main difficulty is that because of the difference
in tax years and definitions of residence - an average of 3 months
over the years will do to make you a British resident - it is
possible to end up paying tax in both countries. Whilst taxes like
income tax can be offset by what you have paid in the other country,
this does not work where the UK has no similar tax. Obviously the
collection of data regarding assets is designed to be used for
charging a tax on assets or wealth. The UK does not have such a tax
at this time although it does have death duties and capital gains tax
, which are applied to property or shares. So if Spain charges tax on
world-wide assets as a fixed percentage, this will be a net loss
unrecoverable from the UK. Spanish police already have records of
cars parked at Málaga airport - indicative that the owner may be
absent from the country. They can easily check flight and ferry
ticket records, where passports must be shown for departures to the
UK. It is difficult for them to check cars crossing into France,
Portugal or Gibraltar unless they set up cameras, at the frontiers It
would be wise for anyone who spends a lot of time in Spain to start
keeping records such as toll tickets or travel tickets that prove
when they are absent from the country. You may be sure that the onus
will be on the potential taxpayer to prove his/her innocence. The
Spanish police have already created difficulties for Britons living
in boats in Spanish marinas'.
A
blog I visit daily is Colin Davis' Thoughts
From Galicia. Here's
Colin on Emilio Botín's triumphant claims of 'business be good': -
'The 79 year old founder, owner and President of Santander Bank told
his audience of business people this week that everything in Spain
was hunky dory and the place was ripe for profitable investment. It
was going through a "fantastic period" he said. The banking
sector was now strong again; government borrowing was cheap; the
stock market was soaring; and people were falling over themselves to
lend money to the government. Yes, he admitted, there was still a bit
of a credit crunch and 4.9m people were unemployed but these couldn't
stand in the way of renewed profits in the financial sector. Which
was good to hear. It's a relief to know that the massive amounts of
taxpayer money were put to good use'.
'Has
the euro been a disaster, or what? It seems pretty self-evident that
it has been. Unemployment is 27.6 percent in Greece, 26.2 percent in
Spain, 16.5 percent in Portugal, and 13.6 percent in Ireland, which,
remember, is supposed to be the austerity success story. What's
happened? Well, exactly what euro-skeptics feared would happen from
the time the common currency was just an idea: a shock hit some parts
of Europe worse than others, and there hasn't been any easy way to
adjust. The ECB's one-size-fits-Germany policy has left crisis
countries no choice but to try to pay-cut their way to prosperity —
which would be painful enough if it were even possible. But it's
really not when interest rates are all but at zero'... From
The Atlantic.
…...
Corruption:
'Luis
Bárcenas, the former treasurer of the ruling conservative Popular
Party (PP), on Friday reiterated in court that he had given 7,500
euros in 500-euro notes as a bonus to the PP’s secretary general,
María Dolores de Cospedal, who in turn emphatically denied his
claims.
“It
was my hand that gave the envelope to Mrs Cospedal,” Bárcenas said
via video-conference from the Soto del Real jail in the outskirts of
Madrid, where he is in preventive custody while awaiting possible
charges of fraud and money laundering.
De
Cospedal, who claims the former treasurer has infringed her right to
honour, has brought a civil case against Bárcenas. “When you hand
over black [undeclared] money, normally there aren’t any
witnesses,” the former PP money-man added'... from
El
País in English.
'The
investigation into Carlos Fabra and his more than 80 bank accounts
continues to pay off. On Tuesday, the senior the tax advisor to the
anti-corruption Prosecutor, Conrado Caviró, declared that the former
President of the Diputación of Castellón (1995 to 2011) and his
ex-wife, Amparo Fernández, made between 1999 and 2004 by
self-billing themselves 9,537,000 euros and, without any receipts, a
further 3,267,000. The expert added that, of this latter quantity,
3,005,000 euros were paid in cash into any of the many bank accounts
held by the couple'... Found
at Público.
Carlos Fabra is currently under investigation for 'influence
peddling, bribery and 5 fiscal offences' (Wikipedia).
(Between
1988 and 2009) 'Six international organizations have condemned the
Spanish political regime a total of 77 times by its repeated breaches
of international law and human rights. The European Court of Human
Rights (70 times), the European Organization for Security and
Cooperation (3 times), Transparency International, Access Info, the
World Anti-Doping Agency and even the International Union of Cyclists
(once each) have issued judgements, reports, notes and public
statements of condemnation that, in most cases, most of the Spanish
press has silenced, manipulated or distorted'... from
Un
Espía en el Congreso.
A book on the
subject
is called 'España Ante El Tribunal Europeo de Derechos Humanos'.
According
to VozPópuli,
'The Government is deactivating the research teams working with the
great corruption scandals. The bodies responsible for investigating
major cases of corruption are being decommissioned one by one. The
latest closure has been that of the commissioner responsible for the
investigation of the 'Gürtel Inquiry', but closures, changes in key
personnel and general interference to stop these investigations are
also affecting cases and investigations like the one into the
Princess Cristina, or the Bárcenas papers or the 'Interligare case',
which investigates an alleged corrupt network at the Ministry of the
Interior which was scamming public contracts'...
'Former
Minister and President of the Junta de Andalucía Manuel Chaves has
said, in reference to the case of the fraudulent ERE paid by the
Junta de Andalucía, that "whatever procedures you have in
place, whatever controls, it's all the same", because "if
there is a director managing a fund of such-and-such amount of money
who wants to steal, he'll steal".
Chaves
stated, in an interview with Vanity
Fair, that it is true
that the procedure that was established "was inappropriate and
suffered from lack of controls", but explained that an
administration like the Junta, with many thousands of public
employees, "is very difficult to control"... From
El Mundo.
'Spanish
intelligence holds a grounded suspicion that the US National Security
Agency (NSA) has combed through millions of phone calls, SMS messages
and emails originating in Spain. The same sources and the government
are also sure that the US surveillance network did not spy on Spanish
politicians, as it did with Brazilian President Dilma Rousseff and
former Mexican head of state Felipe Calderón'... (We thought this
one should be posted under 'Corruption' for the blatant disregard of
human rights and dignity) From
El
País in English.
A bit more from the same article: '...In Spain, such is the
protection afforded to the citizenry in terms of data privacy that
the security services can only demand access to the records kept by
providers in exceptional cases and as part of a police investigation.
The national CNI intelligence agency can access such data in an
investigation, but only if given the green light by the Supreme
Court. Any other method of tapping people’s conversations is a
crime'...
…...
Poverty:
From
Ideal
last Friday: 'Andalucía has become the poorest region of Europe,
according to Eurostat data, having fallen from fifth place in the
ranking, in 2010, to first place. The network estimates that more
than 40% of the Andalucian population, about three and a half million
people, live in the 'ring of poverty', a concept that comes from the
steady increase of the massive rate of unemployment, which has now
reached 35.8%, and the inability to face unforeseen expenditures. One
of every four poor people in Spain lives in Andalucía, says the
report'.
…...
Courts
'The
EU Court of Human Rights has overthrown the “Parot Doctrine”,
which means a large number of ETA terrorists and mass murderers could
be released immediately.
In
short, the Doctrina
Parot was an
interpretation of Spanish parole laws which said that when someone
was in jail for concurrent sentences, parole could only be applied
per sentence,
not the whole amount. ... So the jail doors must now open (within
days) and a flood of people - at least 150 people according to El
Mundo
- sentenced to the maximum amount of time under Spanish jail laws
released back onto the streets. Something nobody is very keen on'.
From
David Jackson.
By Wednesday, 36 Etarras have asked through their lawyers for
immediate release.
Following
on the subject of the precipitate release of certain members of ETA,
the AVT (association of victims of terrorists) is indignant
with Amnesty International who 'should consider the human rights of
terror victims' and not behave, they consider, like the terrorists
themselves. The Government, meanwhile, talks
of 'zero tolerance' for any pro-ETA rally in the Basque Country.
The
first 'Etarra' to be released is Inés del Río, who must apparently
be paid 30,000€ compensation for her over-long stay behind bars!
She is responsible
for the murder of 24 people between 1985 and 1986 (including an
American citizen) and she was sentenced to 3,828 years of prison.
'To Hell and Back: Spain's Grotesque Recession and Its Surprising New Economy.
A
not-so-short history of the Spanish economy: The half-century housing
bubble, the excruciating recession, the grisly unemployment, and,
finally, a glimmer of hope'... Headlines introducing an
article
in The Atlantic.
…...
Essay:
An
article
from El
Diario
(17 June 2013) titled 'Spain is a Train', deals with the metaphor of
the AVE – and also the waste: '...We are talking about a very
expensive and inefficient train whose cost does not correspond to its
use, and that has so far eaten up more than 34 billion euros,
including European cohesion funds. A train that reflects our economic
and social inequality because only a minority get to enjoy its
service for their business and leisure activities, while the majority
feels lucky to get a ride maybe a couple of times a year.
A
train that also illustrates our territorial inequality while paying
court to political centralism from Madrid rather than plying the main
corridors of our country. A train that generates transfers and
concentrations of population and wealth, benefiting big business and
urban nuclei, and leaving thousands of small towns without service.
A
train that devours both resources and territory, whose demands
(without curves or ascents) destroy the environment through which it
passes, with large tunnels, viaducts and connectors; and that offers
urban speculators the chance to place their stations*. A train that
has eaten much of the conventional rail system, drying up the public
resources until the closure of lines and the lack of maintenance of
the remaining lines becomes a reality'...
'...To
sum up, the fact is that Spain is much like the AVE. But the
high-speed project speaks also of the country that might have been
and now never will, the lost opportunity to have opted at the time
for another economic and social model. The better than 34,000 million
euros that the AVE has taken reminds us of other, earlier plans which
aimed to modernize the old existing railway network: for less money,
we would today have a more extensive network, at speeds more than
acceptable (up to 200 km/h, just like many European trains), which
would have carried far more people and have been much more
affordable. Plans that were dropped when the Socialist Government
first succumbed to the fever of the AVE.
So
now we not only look back: the AVE also speaks of the future that we
have reserved for our country, an economic model that does not
concern itself with research or training or citizen welfare, but for
the development of its tourism. President Mariano Rajoy has said that
the new Madrid-Alicante line will promote "tourist mobility",
and he was describing the country as we shall one day be: a
picturesque landscape crossed by fast train from which tourists take
their photos, and only stops in the large cities'.
*A
plan to build a station in Vera, Almería, is contingent on a new
city being built in a local flood-area for 70,000 people, to be
called El Llano Central.
…...
Various:
From
Urbanísmo
Patas Arriba,
we find the
introduction
to a
story
in El
Diario
about the abandoned Valencia race-track, estimated cost (between one
thing and another) to the public purse: 300 million euros! -
'Valencia has gained a new and huge plot full of garbage, pallets,
concrete blocks and even fences and unwanted traffic signs. It was
intended for the failed Formula One circuit, with the particularity
that it had cost at least 89 million euros to each and every
Valencian, even though the ex-president Camps, and Mayoress Barberá
introduced it as 'at zero cost'. Now you can see for yourself the
huge public waste of these lousy rulers who, as usual, have been left
'smelling of roses' while no one from the judiciary has raised any
criminal charges'...
'The
Secretary General of the Partido Popular for Andalucía, Luis Sanz
José, said on Monday that the Junta de Andalucia will spend in 2013
about 15 million euros in institutional advertising. He specifically
explained that in the first quarter of this year the Junta had spent
a total of EUR 5 million, which represents 1 million 250 thousand
euros a month or almost €42,000 per day'... From
Teleprensa.
(Buying friends and influencing people!)
'How
many Spaniards have fled abroad since the start of the crisis? Many
people may have a foggy idea that emigration has been outstripping
immigration for a few years now, but the details are unclear.
Brain
drain some say: these are the voyages of the lost generation, the
educated jetsam of an exhausted economy washing up on Europe’s
greener shores. The United Kingdom, specifically
London,
is a preferred destination. Despite the precipitation, London has a
loud and friendly Spanish community. But how big is it?'... As El
País in English will
tell
you
in this amusing article, it depends who you ask!
'Entrepreneurs
of the night entertainment industry estimate that 4,500 nightclubs,
bars and concert halls have been closed due to the "desperate"
situation faced by the increase of IVA to 21%, coupled with the
economic crisis and the rising costs and taxes on alcohol. In protest
at this situation, representatives of the business alliance for
leisure and tourism ProNoche gathered on Monday outside the Finance
Ministry in Madrid as part of the campaign 'Salvemos la Noche'...
(Well,
Spain does have a certain standard to keep up, of bars, tapas and the
occasional
cuba
libre).
From
El
Mundo.
'A
new drive by provincial government, the Diputación de Alicante,
hopes to get more ex-pats to register on the ‘Padrón’ and able
to exercise a vote in next year’s European elections. The ballot
for the European Parliament takes place on 25th May 2014 and the
Department of Foreign Citizens at the Diputación has organised a
series of meetings across the Costa Blanca. The campaign, ‘Municipal
Register and the 2014 European Parliament Elections’, is aimed at
informing everyone how to cast a vote in the election in Spain'...
From
Round
Town News.
“Are
you ready to run with the bulllllllllls?” This is the first thing
that Rob Dickens, chief operating officer of The Great Bull Run LLC,
says into a wireless microphone on a Saturday morning in August.
People are cheering at the sound of his voice. Some have been
drinking, even if it is just past 11 in the morning. Ennio
Morricone’s theme from The
Good, the Bad, and the Ugly
blasts from the loudspeakers. Wah-wah-wahhnn'...
…...
Finally:
A
reader sends me the following article
from the BBC,
from 2010 - 'Britons who face seeing their Spanish homes demolished
are to be visited by Foreign Office minister Chris Bryant.
Spanish
authorities are attempting to reclaim the country's coastline by
bulldozing some of the developments that resulted from tourism's
growth.
To
cash in on lucrative immigrants, some councils allegedly granted
illegal planning permission, now being revoked. Mr Bryant will advise
the thousands of Britons living in Andalucía on issues from property
rights to healthcare.
He
will visit the town of Albox where about a dozen British expatriate
families are fighting demolition orders issued at the end of last
year'...
Mark
Simmonds, effectively Bryant’s successor albeit from the
Conservative side, is no doubt aware of the current situation. He was
well briefed on the Priors’ case during his own visit here almost a
year ago. Questions: Has the Spanish position changed... or hardened
over the years and are these demolitions discriminatory?
…...
