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Business Over Tapas (12th  April 2014)

By Lenox Napier and Andrew Brociner

miércoles 22 de octubre de 2014, 11:21h

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: [email protected] - Note: Underlined words or phrases are links to the Internet. Right click and press 'Control' on your keyboard to access.

Editorial:

It's strange how any 'good news' about Spain that appears in the foreign press gets the 'major treatment' here, while any criticism is carefully ignored. Even the rather dubious story in The Telegraph about Andalucía being one of the World's twenty best places to live, with an implanted agent's recommendation to buy in Vera Playa or Mojácar, has got the national papers and even the TV in paroxysms of excitement (we particularly like the line '...People dance and eat tapas over the strains of flamenco...'). Other great places to live (according to the same source) include Paris, the Bahamas, Sweden and Morocco. All with their special links to real estate agents. Not, in short, a very serious piece of journalism.

Housing:

The introduction to an interesting article called 'Is Spain a Land of Opportunities'? -

'To “leave your brain at the airport” has become a well-known sentence amongst professionals when talking about buyers getting excited during viewings, and buying what seems to be a bargain before it goes away or, what is worse: someone else takes it. Then, after having paid the deposit or even completing the purchase they realise that due to the building, the surrounding areas and the poor local market conditions, what seemed like a bargain is just an average purchase...'. From Property Secrets.

'Over the weekend of Friday 28th to Sunday 30th March more than 6,000 visitors attended the international ‘A Place In The Sun’ real estate fair in London, where there were a total of 156 exhibitors from around the world. One-third of the international exhibition (56 exhibitors) was dedicated to Spain. Other major exhibitors represented Italy, France, the USA (especially Florida), Portugal and Brazil. According to data compiled by real estate advertising and marketing company, Inmoaction, who dealt with 112 property enquiries at the exhibition over these three days, 45 percent of the British investors interested in the Spanish market are ready to buy a property in the next six months...'. Found at Kyero.

'The Algarve property website Meravista has conducted an extensive analysis of Russian buying trends. They have produced a report which exposes the truth about what, where and why Russians are investing in European property and highlights what Portugal and other countries could be doing to increase their market share...'. A report with graphics from The Portugal News. Spain comes second after Bulgaria in Russian eyes.

The Valencian Community (which includes the Costa Blanca) is the area that sells the most homes to foreign buyers, according to El Mundo. In the final quarter of 2013, 33.6% of homes bought by foreigners were in the Valencian region (almost all in Alicante province), followed at some distance by Andalucía (Costa del Sol etc) at 20% and Catalonia (Costa Brava and so on) at 15.5%. About 40,000 homes were bought across Spain by foreigners in the final quarter of 2013, mainly by the British, the Germans and the Dutch.

All those empty homes held by the banks. Not only are they 'a damn nuisance that need to be sold off as soon as possible' according to a leading (but unidentified banker) talking to El Mundo, but they also owe, in many cases, maintenance and community costs, IBI, insurance and taxes. Indeed, the average bank-held home owes in costs some 2,160 euros per year, and there are an awful lot of them: 130,000 homes costing in write-offs some 275 million euros. Of course, banks are not the greatest payers, and they owe to the different comunidades de propietarios the significant sum of 342 million euros. More here.

Tourism:

Spaniards will spend over 2,000 euros per adult this year in tourism, according to a report with more details regarding preferred destinations and other material over at Hosteltur.

Finance:

Government auditors say that "public resources employed or engaged in the restructuring of financial institutions, as a result of the actions carried out between 2009 and 2012" – that's to say, State aid to the banks – cost almost 108 billion euros according to a report submitted to the Congress of Deputies. The bank that received the most help was the CAM (who?) followed by Bankia. El Mundo has more.

'Spain was shamed Monday after the EU named it as the 3rd most expensive EU state for electricity, and 2nd most expensive for ADSL. This, despite median earnings and high unemployment putting the country into the low end of the EU development index. Brussels notes “with alarm” this is putting Spaniards into a position where basic utilities are becoming luxuries. The cheapest fixed line ADSL offer is currently €38.7 a month, and the average household pays €800 a year for electricity, according to the EU stats. The average ADSL on offer is pretty paltry notes the EU, which notes that it’s rather slow and clunky...'. From David Jackson.

'Headline of the Week' goes to The Local with – '1% of Spaniards positive about economy: survey'. The story begins: 'Despite the government's recent announcements that the worst of the crisis is over, a measly one percent of the Spanish population thinks the economic situation is "good", a new survey reveals. Spain’s National Research Council has shed some light on what the average joe in Spain really thinks of the country’s economic recovery and the positive stance the ruling popular party has adopted when dealing with the press since the beginning of 2014. After carrying out 2500 interviews at the start of March, the official body has concluded that 44.4 percent of the population still feels the financial situation is “very bad”, while 40.1 percent label it as just “bad”...'.

Could the largest Spanish olive oil company, which distributes a fifth of the olive oil sold worldwide, fall into foreign hands asks The Olive Press (understandably worried)? -  'At least three foreign investors had last week submitted bids for the company, Deoleo, leaving the government to decide whether to let foreign investors take control over one of its main agricultural sectors. Prime Minister Rajoy’s government has already warned potential investors against splitting up Deoleo’s assets, or shifting its focus away from olive oil farming...'.

European Elections:

Finally, the PP candidate for the European elections, or rather 'head of the list', is the current Minister for Agriculture Miguel Arias Cañete, who by the way speaks fluent English and French. Arias Cañete was a euro-deputy for thirteen years before becoming a senior minister in Rajoy's government. So now, a reshuffle. Other candidates and their parties, here.

Politics:

Andrés Ortega, a political analyst and writer, presenting his latest book 'Recomponer la Democracia' says that a popular move away from supporting the two main parties in Spain could lead to the unthinkable – a future Government coalition of the PP and PSOE. El Diario interviews the author.

'Spain would have a right to send troops into Catalonia if the region decided unilaterally to become independent from the rest of Spain, the authors of a report released last Thursday argue. The study by Spanish economic think-tank IEE paints a grim economic picture for a possible independent Catalonia.

Among the risks highlighted are a flight of capital from the region, hyperinflation, a fall in exports, and a possible 30 percent drop in trade with the rest of Spain. Tariffs and higher transport could also help “ruin many businesses in the most dynamic sectors of Catalonia's economy”, the report's authors warned...'. From The Local. See Per Svensson's essay below.

'He was earning 92,000 euros gross per month against the 78,185 wage of the Spanish Prime Minister. For a city of about 73,000 inhabitants, this was too much. The Mayor of Benidorm, Agustín Navarro (PSOE), will now receive 54,896 euros gross per year and will have to return out of his wage-packet, starting from next month, the excess received since May 2012, according to a plenary session agreement...'. From Sueldos Públicos.

A row broke out in the Seville Government on Wednesday, just one hour after the head of the housing ministry Elena Cortés, from the coalition partner Izquierda Unida, had placed ten families of okupas - 'squatters' - who had been ejected from their homes by the police, into Government owned housing. The Junta de Andalucía President Susana Díaz has now 'removed competence' from Elena Cortés, sparking off what may become a huge row between the two Junta de Andalucia partners, PSOE and IU. More at Ideal. 

Courts

Making sense of the Gürtel Case with El País in English. Two hundred suspects in six regions (the full story).

The Hotel Algarrobico in Carboneras. 'Halted Almería tourist complex could yet be completed after court ruling', with El País in English: '...Miguel García was the site manager on February 21, 2006, when construction was halted and the workforce of 234 sent home. He now works as the complex’s sole security guard. Walking through the empty rooms, lighting one cigarette after another, all he can seem to say is: “What a shame, what a pity!” He skips up a marble staircase to the dome. There are piles of rubble everywhere, some having sprouted prickly pear trees over the intervening years. The kitchen has been looted, and all cabling stripped. The four cranes on the site are slowly being eaten away by rust. “You should see them on windy days, they swing round like crazy,” he says. His hope is that the hotel will be completed: “and I can enjoy a beer on the terrace.” He also raises the question of what would take the hotel’s place if it is demolished: “We got rid of the equivalent of 12 storeys of mountainside to build this.”...'.

Currently, the ecologists are denouncing the courts for not agreeing with them. Ah, the ecologists, who never seems to complain about the plastic farming in Almería which ruins the soil, the local plant´life and the aquifers, besides blowing tons of rotting plastic around. Spain has the second highest national park proportion in the World (behind the USA), but it's apparently not enough.
Knock down the Algarrobico (a hideous monstrosity, yada yada) and, what, spend millions on returning that 300m long strip of nothing back... to nothing? As Junta President Susana Díaz says, the people of Carboneras don't need that hotel, they can work in the Natural Park. Collecting snails maybe... or perhaps those pesky bits of plastic. What a mess.

The Government has dropped the rule of International Law ('justicia universal'), letting, as we know, the ex-Chinese leader and other luminaries off the hook for crimes committed against humanity in foreign countries. It was all just too embarrassing! One result of this has been to allow eight Egyptian narcotraficantes (caught with 10,000k of hash some 60 miles off the Spanish coast) to walk free because their ship was boarded in international waters. More at El Diario and here at El Mundo.

'The Attorney General, Eduardo Torres-Dulce, called on Tuesday for greater autonomy for the Prosecutor's Office since people find it “unacceptable” that the office is under "remote-control" from the Government, or at the service of political considerations. Torres-Dulce thus recognized, in the presence of the Minister of Justice, Alberto Ruíz Gallardón, that there is political interference in an office that, according to the Constitution, must be independent of the legislative and executive powers...'. A remarkably under-reported story Found here at Público.

The New York Times has an article about torture under Franco, and how some of those involved are still around. One man, tortured as a student, handcuffed to the ceiling and dangling in the air as he was beaten. The man who did the torturing, '...was an infamous enforcer of the Franco dictatorship in the 1970s, widely known as Billy the Kid for his habit of spinning his pistol on his finger. So Mr. Galante was startled last year when he located the man — living in a spacious apartment less than a mile from his own neighbourhood in central Madrid...'.

Essay:

Independence for Catalonia?

By Per Svensson

The great poker party on independence for Catalonia is getting close to a preliminary end, the pot on the table is immense and the players tense. Let us present the participants and look over their shoulders to see the cards they hold:

Artur Mas is leader of the government party (CiU) in the Catalan region and president of the regional government. He has called for a referendum on the 9th of November, asking the citizens of the region “if they want Catalonia to become an independent state” and in case they so want, “if that state should be independent.” His strongest card is the great nationalist feeling among the citizens, that has increased during the crisis years. This feeling was expressed in a demonstration march with 1,5 million participants in September (the region has 7,5 million inhabitants).

The Prime Minister of Spain and leader of the conservative Partido Popular, Mariano Rajoy, is on the opposite side of the table, maintaining that Catalonia has no legal right to perform a referendum or create an independent state. His best cards are the support of the national parliament, the courts, the majority of Spanish citizens and indirectly the European Union, that has made it clear an independent Catalonia would have to seek readmission in the union, with Spain holding a veto right.

Other players at the Catalan poker game, is the aggressive nationalist party ERC, the Catalan socialists and the Catalan version of the leftist IU, all supporting the bid for independence.

The Shadow Players

But there are also some shadowy figures not sitting at the game table, but moving around in the background, influencing the players. One of them is a leading military officer, that last year declared the armed forces would “not permit” a dismembering of Spain. Sharp criticism from many directions made the figure move out of the lamp-light, but he still lurks in the shadows.

Another prominent figure in the game room is Big Capital in Catalonia. The region accounts for 20% of the economy in Spain and 25% of all tax income, much of it produced in the tourist, banking and construction sector. The crisis hit the Catalan banks and constructors hard, precisely those who were prominent in inflating the property bubble that caused the crisis in the first place.

Big Capital has no motherland, and is now sitting on the fence, considering the pro and contra of Catalan independence. Its representatives are well aware the region could arrive into a perilous situation outside Spain and the EU, losing maybe up to 40% of its economic power and international confidence. A representative from one of the great investment funds commented recently:  “One can only invest in Catalonia on a 12 months horizon.”

The Historical Aspect

One of the most frequently used argument of the Nationalists is that Catalonia has been independent in earlier stages of Spanish history. This fact cannot be denied. It even formed part of the kingdom of Aragón when the northern smaller kingdoms defeated the Moorish kalifat and conquered Granada in 1492.

But this historical independence is not argument enough. Then also the Basque provinces, Asturias, Galicia could leave the Spanish state, France would lose Bretagne and Normandy, England would be without Wales and Scotland, Italy would be without Lombardy and my dear Norway (united by the ambitious local king Harald  “Fair Hair” in 1380), would disintegrate into a number of small kingdoms.

Who Will Take the Pot?

There are opinion researches for all tastes. In a Gallup from October the Dialoga Consultores found that there was no majority for independence in all the big cities, only in rural areas. In Barcelona approval of the proposal from Artur Mas reached only 40%.

However, later investigations give another picture. A December poll made by CEO, a Catalan government agency, came to the conclusion that almost 60% of the citizens desire independence from the rest of Spain.

With the present tsunami of nationalist feelings in Catalonia we may get a situation where Artur Mas takes the pot, only to find that most of the money is fake currency.

The losers of this game is already clear: The Catalan and Spanish citizens.

Various:

Tuesday was the international day of the gypsies and, in Spain, around a third of them – somewhere between 240 and 285,000 of them live in Andalucía. Unsurprisingly perhaps, they say they have been badly affected by 'la Crisis' and that racism against their ethnicity is on the rise. More on this at El Diario.

Imagine living, locked in, in a shack within the Tierras de Almería plastic farms, los invernaderos. Such is the fate of 'hundreds of immigrants'. Most are without papers and they must work – for a pittance – in the harsh conditions of the plastic farms, where temperatures can be as high at 52ºC and where high levels of insecticide can affect the health of the workers, who, of course, have no social security. The Spanish Cruz Roja helps as best it can. Large locked metal gates – to stop robberies – keep the workers inside their small fiefdoms, forgotten and ill-used. The story and video here at El Diario.

'What the EU is for: from 2015, no more roaming charges anywhere in Europe. The European Parliament has voted to fix all mobile calls and internet access at local rates in all 28 member countries. From December 2015, the cost of making a call or downloading internet data in any other EU country will be the same as at home'. (Following article in French). From Slipped Disk.

Silly story of the week: 'The former president of Valencia soccer club, Juan Bautista Soler, was released by police on Wednesday after being arrested for trying to kidnap Vicente Soriano, another ex-chief at the team. Soler was detained by National Police on Tuesday, and spent the night in custody. (Yesterday) morning he was questioned in a Valencia court...'.  From El País in English.

While I sometimes tend to skip through that fine newspaper 'Las Noticias de Cuenca' without taking much on board, some news from the small town of Reíllo (pop 126, plus some goats) has staggered the Good People of Castilla - La Mancha and certainly is worth reporting here.
Seems that the Socialists, while in office in the town's Rathaus back in 2008, changed the name of the high street from 'Calle Generalísimo' (in reference to the old Caudillo himself) to José Mondejar, the name of a much-loved local schoolteacher and sometime mayor. There's nothing like switching the names of streets to confuse the taxi drivers and keep the stationer in small printing jobs.
Now, the current mayor, a man of the PP persuasion, has pushed through an order to change the street back to its previous name, apparently against the wishes of both the population and the strangely named 'Ley de Memoria Histórica'.
The Spanish version of Wiki is a trifle stand-offish about the town and its traditions: 'Since time immemorial and following medieval tradition and folklore, the lunatic Botarga walks to the corners of the village, disguised with a mask and with a baton in his hand, followed by various groups of young and older people and livening up the streets that recall the dictator Francisco Franco, in violation of the current 'law of historical memory'. This story illustrates the mayor of the village and the party with which he is campaigning, the Partido Popular, to be a formation that supports the dictatorship without regard for others'.
Just when we thought the entire experience of 1936 to 1975 had been artfully removed from the history and geography books.

A house built in the first years of the last century by the fabulous Antoni Gaudí that is rarely on show, the Casa Figueras (or 'Torre Bellesguard'), with pictures here. The house, in Barcelona, is now (partially) open to the public. Official website here.

Finally:

D'ohh! Homer the Referee is bribed by a Spanish world-cup player.

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