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Business over Tapas (Nº 232)
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Business over Tapas (Nº 232)

By Lenox Napier and Andrew Brociner - Sent by José Antonio Sierra

10NOV17.- A digest of this week's Spanish financial, political and social news aimed primarily at Foreign Property Owners: With Lenox Napier and Andrew Brociner. Consultant: José Antonio Sierra - For subscriptions and other information about this site, go to businessovertapas.com

email: businessovertapas@gmail.com - ***Now with Facebook Page (Like!)*** Note: Underlined words or phrases are links to the Internet. Right click and press 'Control' on your keyboard to access. Business over Tapas and its writers are not responsible for unauthorised copying or other improper use of this material.

Editorial:

Tourism is a wonderful business. Instead of a fair trade between nations, it’s just an invisible export. The punters arrive, get sunburnt, see something, acquire a tattoo... and go home again, empty-handed. Their money remains safely in the hands of the shopkeepers and the hoteliers. What a business. However, it’s a gamble that they may not be back next season. The service may not have been good, or they may have been rumbled over the diarrhoea scam, or maybe Brexit finally pulled the pound down and the cost of a week or two in Benidorm rose accordingly.

Britons may account for 20% of all foreign visitors to Spain, but close behind them are the Germans, the Dutch and the Italians. All of whom are just as likely to choose another destination next year (especially the Italians, who, unlike the rest of us, are always moaning about Spanish cooking).

Other countries are competing for Spain’s amazing 80 million-strong tourist business, and tourists may easily chose another country next time – after all, there’s not much loyalty among the holidaymakers. Back home with a sun-tan, it’s nice to be able to say ‘oh this year we went to Miami’. Then there’s the media: one wrong word in the Daily Express or Bild Zeitung and they’ll all be trotting down to cancel their visit to Ibiza.

Other countries have had problems – the terrorists, political upheavals or maybe a shortage of gin – but now we hear that Turkey, Egypt and Tunis are considering devaluing their currencies precisely to bleed off (sorry) some of Spain’s massive harvest.

Now is the time for travel fairs, with the London World Travel Market closing its doors this Wednesday, followed in due course by the FITUR in Madrid (January 17 – 21) and the ITB in Berlin (March 7 – 11). All of these major markets are there to commercialise their own resorts and offers, with special prices, ‘all-inclusives’ and a host of other tactics. Last year, worldwide international tourist arrivals rose to 1,235 million people – now that makes one’s fingers tingle. Our tourist councillors, plus their entourage, will be busy.

Housing:

‘Property sales and prices in Spain are forecast to rise in 2018 as long as there are no sudden economic surprises or changes to the mortgage market. Anticipa, one of Spain’s biggest real estate providers, expects sales to rise 9.3% next year to 526,000 units, up from 481,000 this year and 21% more than in 2016. It is also forecasting that prices will have risen by 6.9% by the end of 2017 and looking ahead to 2018 are set to rise by slightly less at 6.1%. Even with this rise they will still be 27% below the peak of the market in 2007...’. Property Wire has the report here.

‘Valencia City is well placed to benefit from the crisis in Catalonia, where political turmoil is turning foreign investors off Barcelona, at least for the time being. Like Barcelona, Valencia is a stylish, safe city with a good climate, great quality of life, lots of culture, and long white beaches, yet house prices are significantly lower than Barcelona. Catalan banks and some companies are moving their registered offices to Valencia, and jobs will follow. It's time to pay closer attention to Valencia City’. Opinion piece from Mark Stücklin.

From Spanish Property Insight, ‘Andalucía starts fining holiday home landlords’.

Ibiza triples fines against ‘irregular’ holiday lets, says Hosteltur here.

The BBVA loses a court case: ‘A firm ruling obliges a bank to repay the 175,000 euros of mortgage that had to be paid by a client for an apartment that was never built’. More here.

Tourism:

The paperwork is now in place to open the long-awaited Corvera airport, according to a piece at La Opinión de Murcia here.
‘..."In today's world, either you change or you will be changed. So, either you act and then you make some hard decisions and take some risk … or somebody is going to be acting for you – that's somebody called Booking.com, Expedia, Airbnb, Google, Amazon or Facebook." They are the words of Sébastien Bazin, CEO of AccorHotels, who spoke at this year's South America Hotel Investment Conference on the need for hotels to take control – or risk losing their place in the driver's seat...’. Taken from an article titled ‘How Spain’s hotels are capitalizing by owning their supply’ at Hospitality.net here.

British Airways appears to think the same way, and has announced that it is improving its service with ‘wifi, at-seat power points and more meals’. The Olive Press reports here.

Seniors:

‘The new wave of senior Brits in Spain want “authenticity” and better health. British pensioners and older-aged tourists in the future will increasingly “seek authenticity and demand good health,” according to a recent event in Valencia, reports El Mundo (here) A study by the Valencia tourism organisation Invattur, authored by Ana Baldera, says “tourism is changing, including British tourism.” The tourism expert stressed, according to the report, that Spanish tourism hubs like Benidorm will have to do more in the future to retain the label as number one destination for British tourists in Europe...’. From an email report sent by The Local.

Finance:

From Mark Stücklin’s Spanish Property Insight, ‘Your Guide to Non-Resident Taxes’.

El País headline: ‘Unemployment reaches its worst October rise in Catalonia since 2008’. It turns out that unemployment (in Barcelona province at least) now stands (according to the Ministerio de Empleo) at 12.56%. Contrast this with the national rate at 16.38% and, for example, Almería at 27.65% with Córdoba standing even higher.

A lengthy title from El Confidencial: ‘Hacienda Minister Montoro takes over the Madrid accounts, but pardons several regions that fail to comply since 2007 – including Catalonia, Castilla-La Mancha, Murcia and the Comunidad Valenciana, which have not met their deficit targets for a decade without the Treasury having reinforced its budgetary control’. The article begins ‘The relationship between the Ministry of Finance and Madrid City Council was a brittle one. The severity of the ministry's control of its budgets and the town hall's brazenness in announcing that it would fail to comply with all the demands from Hacienda never expected an amicable resolution. Finally, it was the minister, Cristóbal Montoro, who pulled the plug. On Monday evening, he informed the ayuntamiento of his decision to control its spending on a weekly basis in order to supervise all the outlays from Madrid. An unprecedented decision, since the coercive measures included in the Organic Law on Budgetary Stability and Financial Sustainability (LOEPSF) had never before been activated due to non-compliance with the objectives...’. (More on this in Politics below)

Politics:

The position taken by the minister Montoro over Madrid is seen in some quarters as a gambit to stop the mayoress Manuela Carmena from her plan to stand – together with Unidos Podemos - for the 2019 municipal elections there which she would be expected to win. As Madrid’s accounts are taken over – led by the man (an ex-PP mayor) who left Jaén’s accounts in shambles – eight other cities with similar monetary policies to Madrid are left, so far, in peace. 150 town halls have sent a joint letter to Montoro in support of Carmena. El Mundo asks ‘Is this a similar decision to the one taken regarding the Generalitat before the illegal vote of October 1st (the Article 155)? And answers: pretty much’.

For a view from the right, here’s ABC’s Wednesday headline: ‘Carmena's politics stumbles upon harsh reality: the TSJM (Superior Court of Justice), Hacienda and the Francoist Street names’. Among other issues, we read, the Superior Court has ruled against an inquiry into the practices of the two previous mayors of Madrid - Alberto Ruiz-Gallardón and Ana Botella. The changes of various ‘Francoist’ street names is also vigorously criticised.

From El Boletín: ‘...“a serious interference”, “intolerable” and “a force to generate discontent in the citizenry”. This is the analysis that Equo has carried out in response to the intervention of the accounts of the Madrid City Council by the Ministry of Finance. The green formation notes some data that, in their opinion, contradicts the decision: while Madrid has now “reduced municipal debt by more than 2,000 million”, the Government of Mariano Rajoy “has trashed the national pension piggy bank”...’.

From El Confidencial: ‘Is it reasonable for Spain's largest city, with a surplus of 1,022 million euros in 2016, to be partially intervened for spending more than it should when this surplus represents nothing less than 0.8% of the GDP of the city of Madrid? The question has nothing to do with rhetoric, and it is, at heart, the essence of the umpteenth confrontation between Madrid City Council and the Ministry of Finance. On this occasion, on account of a controversial concept: the ‘spending rule’, which has a lot of subjectivity, but which is not only legal, but is also the one used by Hacienda - like it or not - to calculate what municipalities (and the autonomies) can spend each year regardless of their financial health. It’s a truly peculiar rule - with a complex methodology. In 2015, for example, the Madrid City Council failed to submit with this rule because it spent 16.9 million euros more in relation to the computable expenditure, which amounted to 2,932 million euros in that year. In other words, the deviation was 0.5%, which forced him to submit an adjustment plan ... Simply put, the level of expenditure should grow in harmony with the GDP in the medium term: 1.5% in 2016, and 1.7% in 2017...’. So, despite shrinking the municipal debt, the city is spending too much!

‘More than half of PSOE supporters don’t trust Pedro Sánchez (he’s the second least trusted party leader by his own supporters, just in front of Pablo Iglesias)’. So says the ABC here.

From The New York Times: ‘As Catalonia Crisis Deepens, Many Basques Wary of New Independence Bid’.

The Guardian thinks that, regarding Catalonia, ‘In Spain, democracy and law are being reduced to hollow shells’.

The ex-foreign minister Margallo says that ‘we owe favours to various countries following their positions against the Catalonian independence’. La Vanguardia has the story here.

‘...One of the dozens of companies embroiled in the Popular Party’s kickback scandals is Indra, a semi state-owned tech giant that organizes the vote counting for virtually all of Spain’s political elections, including Catalonia. The company is alleged to have paid Rajoy’s party €600,000 of public funds diverted through a complex network of shell companies. The scandal barely graced the front pages of Spain’s newspapers. Now Indra gets to organize the vote counting for Catalonia’s do-or-die elections in December...’. Taken from Wolf Street’s appreciation of the current uncertain situation in Catalonia (and indeed the rest of Spain) here.

Spain’s newspapers fail to mention the report that the UDEF (anti-fraud and delinquents squad) have alleged proof of improper party payments to Mariano Rajoy, says El Boletín, while, in Parliament, the Unidos Podemos spokesperson Irene Montero asks the Minister of Justice ‘who is this M. Rajoy mentioned in the Gürtel Inquiry who received improper payments?’ Video and article here.

The ex-Minister of Industry José Manuel Soria, fifteen months after resigning from his job after it was found that he had connections to tax-havens, still enjoys the protection of two policemen, with another six taking turns watching his house in Las Palmas de Gran Canaria, where a mysterious burglary took place last New Year’s Eve, says El Diario here.

The spokesman for the Madrid municipal police union has resigned after being spotted in a far-right demonstration last week, says VozPópuli here.

Corruption:

‘The head of the police investigation, on the PP's Black accounts': "Pure Corruption." The chief inspector of Gürtel, Manuel Morocho, tells Congress of "destabilizing" pressure and complaints against UDEF from interested persons in an attempt to try and stop the investigation’. Público reports here. Europa Press also picks up the story of ‘pressure against the anti-fraud police (UDEF) over the Gürtel Inquiry’ here.

Not all fiscal paradises are fiscal paradises, apparently. Of the nineteen of these tax havens named in the incendiary Paradise Papers, only seven are included under Spanish investigative rules. According to El Salto here, ‘…Aruba, Bahamas, Barbados, Saint Kitts and Nevis, Saint Lucia, the Island of Saint Vincent and Trinidad and Tobago, the Marshall Isles, Samoa and Vanuatu, Malta, Labuan and the Federal Territory of Malaysia are not included – leaving as tax havens just Antigua and Barbuda, Bermuda, the Cayman Islands, Dominica, Grenada, Cook Islands, and Lebanon. Other territories not considered as tax havens by the Spanish authorities apparently include Andorra, Netherlands Antilles, Aruba, Cyprus, Hong Kong, Bahamas, Barbados, Jamaica, Malta, Trinidad and Tobago, Luxembourg, Panama, San Marino, Singapore and the United Arab Emirates. As for Gibraltar...??

Catalonia:

‘A judge in Madrid has ordered eight members of the deposed Catalan government to be remanded in custody pending possible charges over last week’s declaration of independence. Carmen Lamela, sitting in Spain’s national court, jailed the eight former ministers – including Oriol Junqueras, deputy to the deposed president, Carles Puigdemont – on Thursday while they are investigated on possible charges of sedition, rebellion and misuse of public funds...’. From The Guardian here. Carles Puigdemont and five other members of the Catalonian government had meanwhile travelled to Brussels to escape Spanish justice, and were later allowed to stay as an international warrant creaks through the system. El Diario says that Puigdemont is prepared to stand as candidate for President in the December 21st elections, while Junqueras asks to be released from prison in Madrid to campaign in the Catalonian elections.

The mayor of Terrassa has quit his post and his party, the PSC (the Catalonian PSOE) after differences with that party’s policies regarding independence. Jordi Ballart says that his party ‘has moved to the right’. The story at El Plural here.

The parliamentary spokesperson for the Partido Popular, Rafael Hernando, says that if the Independents win, there’ll be another article 155 coming down the pipeline. La Vanguardia has the story here.

According to El Nacional (a Catalonian source), The Times of London has published a blistering piece called ‘Rajoy’s Prisoners’. (There is similarity to Brexit and the Catalonia situation, it seems...). ‘Rajoy should stop trying to imitate Vladimir Putin’, we read.

Further Update on Catalonian Independence

by Andrew Brociner

The Centre d'Estudis d'Opinió has published a third opinion poll this year on Catalan Independence, on 31 October, 2017. While the result of the last poll showed 41% for independence and 49% against, the more recent one has 49% in favour and 44% against. This significant increase took place during the aftermath of the referendum. Thus, the recent events and incompetence of the central government appears to have tipped the balance in favour of independence. The reaction to the repression was predictable. Therefore, if elections are to be held shortly, pro-independence parties would no doubt win again and so, what did this show of force from Madrid result in?

The central government, not content with letting things be, has gone even further in its zeal to punish people. The Guardia has raided offices of the Mossos, Catalan politicians have been imprisoned, including eight Catalan ministers, others who fled to Brussels, including Puidgemont along with four other ministers, had warrants out for their arrest and have surrendered to the Belgian authorities, and Catalonia continues to be governed by Madrid. Some have commented that this action is a deflection away from more corruption going on by the central government. In any case, the outrageous disrespect for democracy in Spain shows no sign of abating, starting with the prohibition of a peaceful vote for self-determination, to the pitting of law enforcement officers against each other, to the imprisonment of elected members of parliament, and now to Catalan senior politicians being arrested. Far from the exercise of power it may wish to project, the central government is sinking further into utter bathos. It not only looks increasingly ludicrous, as the Spanish government's answer is only through the use of force, but this now unnecessary drive is only going to foment still more opposed reaction on the part of Catalans. The repression perpetrated by the myopic Rajoy is clearly reflected in the numbers in Catalonia, with support for independence already at a majority. So, now, the question is, what will happen after the next elections in Catalonia, where in the last ones, pro-independence parties already won a majority?

Murcia:

El Mundo reports another attack against the machines that are building the AVE entryway into Murcia (which manages to cut off 20% of the population from the rest of the city). As the city remains justifiably choleric, Público reminds us that the five-metre-high wall stretches for nine kilometres. According to Europa Press – the Government has backed down and now agrees to an underground entryway, at an additional cost of 17 million euros.

Courts:

A Spanish rapper has now gone to jail for three and a half years. Be careful what you sing about. ‘I don’t sing love songs’, says Valtónyc, ‘for that, we’ve got Andy y Lucas’. Meanwhile, a man from Álava has gone to prison for posting offensive political Tweets. Alfredo Remírez supported ETA ex-prisoners in his postings. Apparently, you shouldn’t.

An interesting arrest - a secret ex-commissary called José Manuel Villarejo, who would help political and business figures. He made millions... and kept recordings. Público has the story of the arrest of Villarejo and five others allegedly within the ring. More here. In a later story, Villarejo has been sent to prison ‘for money-laundering and bribery’.

The ex-president of the Madrid Community, Ignacio González, has been let out of prison - where he has been held since April of this year, after paying 400,000 bail. El País has more.

Brexit:

Two partisan articles about Brexit:

An American journalist’s view of Brexit, from The New York Times: ‘Many Britons see their country as a brave galleon, banners waving, cannons firing, trumpets blaring. That is how the country’s voluble foreign secretary, Boris Johnson, likes to describe it. But Britain is now but a modest-size ship on the global ocean. Having voted to leave the European Union, it is unmoored, heading to nowhere, while on deck, fire has broken out and the captain — poor Theresa May — is lashed to the mast, without the authority to decide whether to turn to port or to starboard, let alone do what one imagines she knows would be best, which is to turn around and head back to shore...’.

‘How I learnt to loathe England. A Dutchman reflects on what he’s learnt by living in Britain for the last six years—it isn’t pretty’ From Prospect here.

Media:

An opinion piece in El País (here in its English-language version) is titled ‘We are sorry to have disappointed you. But maybe we Spaniards have grown up and no longer need to be lectured’. The argument being that the foreign media treats Spain ingenuously. Ah'll tell ya, ah plumb fell off the commode when ah saw this piece of bullsquat. Seriously? El País, now utterly beholden to its corporate owners and the Partido Popular - a disgraceful fall from its worthy beginnings - now talks about propaganda? Get real!

El País has been ‘...subservient to the interests of the multinationals that pay for it...’ for quite a while. The above is from an article at Diagonal (November 2014).

Valencia: according to El Diario, we read that ‘The Government of Camps paid 3,600 euros per month for renting two-storey offices from the president of the Las Provincias newspaper’.

Eneko, the recently fired (censored) cartoonist for 20 Minutos talks to El Salto: ‘There is a wave of repression which is returning freedom of speech to other (earlier) times’.

Various:

20 Minutos considers the ugly story of suicide in Spain, where around ten people a day take their lives.

Spain is about to agree with Ireland the excavation of some Spanish Armada galleons. The agreement is about to be signed and quantifies as more than thirty sunken vessels in Irish seas, most of them are located in shallow waters’. Article from Typically Spanish here.

The picudo negro (‘snout weevil’) has been active in Almería for a year or two, decimating the agave plants. The insect, from Mexico, begins life as a grub (the one found in mescal bottles). Someone apparently brought it to Spain... It has now extended to Málaga says the Diario Sur, with devastating results as it also destroys yuccas and even aloes.

The Supreme Court is the latest to grapple with the thorny problem of what to do with the Hotel Algarrobico in Carboneras, Almería. Building was stopped after twenty stories had been completed back in 2005. Since then, it has rotted gently in the warm Mediterranean sun. Neither completed, nor demolished. More at La Vanguardia here.

See Spain:

‘An Epic Barcelona Tapas Crawl – Eight Best Tapas Bars in Barcelona’, found at the nutritious Madrid Chow here.

Letters

Hello Lenox, just driven through the Catalonian heartland, did my best with the language! It seems to me there is a very high wish for independence there, with flags and posters well away from Barcelona.

Richard

Finally:

Comedian Steven Colbert on the Late Show explains what’s happening in Catalonia. Video on YouTube here.

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