Independent Catalonia not in EU
The demand for independence from Spain is increasing in Catalonia and may become the central issue in the regional elections next month. In a letter to the central government, EU commissioner Viviane Reding has confirmed that a territory of an EU state which declares itself independent, is automatically excluded from the European Union.
Official figures: 25.02% unemployment
The Government has confirmed unemployment at the end of September increased by 85,000 to 25.02%, thus 1 in every 4 who wish to work is denied the possibility.
We remind our readers that the long term unemployed and those who that have never had a job (school leavers etc) are not included in the figures.
1,737,900 families without a breadwinner
There are 312,700 more families, which do not have even one member in work, than a year ago; a total of 1,737, 900 families. The number of families with all members working has fallen to 8,521,700; 58,800 less than in the last quarter.
Each Spanish contributed 1,846 euros to banks
The banks received 99.95% of the 87,497 million euros given in public support to overcome the crisis. This is equivalent to 1,846 euros per person in the population of Spain.
Ex-Vice Premier Rato in court
Rodrigo Rato, the former Vice Premier of PP Government, Director of the International Monetary Fund and President of Bankia, is to appear in court on 22nd December accused of misappropriation of funds, falsification of accounts and fraudulent intervention, which led to the collapse of the bank and made a costly intervention of the Government necessary.
Also accused are is the former Interior Minister Angel Acebes, and Jose Luis Olivas, former President of the Valencia Regional Government and Director of Banco de Valencia.
PP leader rebels against Rajoy
Alfonso Rus, PP leader in the Valencia Province, has called for resistance against Prime Minister Rajoy if the Valencia Region does not receive the same investments as some other regions, thus enabling the province to pay its bills.
Tax inspectors on the beaches
Inspectors from the Ministry of Finance (Hacienda) are visiting apartments on the coasts, beach shacks, windsurf and diving centres, discos, concerts and ‘ferias’ to sniff out the black economy. So far they have made 8,000 of 12,000 inspections planned for this year; in 40% of the cases, they have found tax sinners.
In a recent survey, 92.2% of those questioned, were convinced there is a lot of tax fraud in Spain; 88% believed taxes are not paid fairly.
Police in demonstration
Three thousand police officers from across Spain, blowing whistles, burning rockets and singing protest songs, demonstrated outside the Interior Ministry against the social cuts.
Valencia: Debts increasing – investments down
Provisions for the repayment of financial debts in the Valencia Region’s budget for coming year increased 55%, whilst public investment is down 42.1%.
‘Bad Bank’ gets 63% discount on property
The ‘bad bank’ set up to take over the toxic properties which are threatening the survival of many banks, now has a name, ‘Sareb’. The properties now being transferred to the new bank have average discounts of 63% on their book values. Completed housing has been discounted 54.2%, those still in constructing, 63.2 and virgin building land is discounted 79.5%.
Sareb is supposed to function for 15 years, and in that period selling off all the properties.
The weekly crisis:
Prime Minister Rajoy has declared he has no intention of asking for a financial rescue at the moment. In the meantime, the cost of Spanish debt remains high. The ‘country risk’ is 419 points and interest on 10 years bonds is 5.6%
Since 2006, 397,651 families failing to pay mortgage installments have been evicted from their homes
Caixa Bank lost 2,605 million euros in the third quarter, bringing total losses for the year to 7,053 million. The percentage of bad loans has risen to 7.6%
CaixaBank has decreased its value by 173 million euros up to September, 79.5% less than last year, due to the financial reforms implemented by the Government
Banco Popular had an increased income by 251.1 million in the first nine months, a decline of 37.8% compared with the same time last year. Their percentage of bad loans is 7.81%
36% of the 5,778,100 unemployed are at risk of poverty, meaning they have less than 7,355 euros per year to live on. The jobless get unemployment support for only two years (on the condition they have contributed to the Social Security System for at least two years). After that period only those who have to support two others, get 450 euros per month, but for one period of 6 months
Since the start of the crisis in 2008, the value of property owned by Spanish families has decreased by 1 billion euro. According to Tinsa, a 45.5% decrease. Some families have lost everything
Shop turnover was down 12.6% in September, compared with September last year, due mainly to the higher VAT rates taking effect that month. It is the 27th consecutive month of shrinking sales – and consumption
The Spanish crisis is playing an important role in the American Presidential elections. Mitt Romney is citing Spain as a negative example, and President Barack Obama has said, ‘In Spain, they did not react rapidly enough when the bubble burst.’ Obama is absolutely right
Property prices on the coast and islands
The sale of properties along the Mediterranean coast and on the Islands is only a fraction of what it is was 5 years ago. Based on properties sold, realtors have complied the following list of prices per m2 built (covered terraces count 50%, non-covered 25%) for some of the municipalities where foreigners are living:
Province of Tarragona
Amposta 1,233 euro
Reus 1,398
Salou 2,141
Tortosa 1,214
Province of Castellon
Benicarlo 1,058
Burriana 1,058
Oropesa del Mar 1,861
Vińaros 1,410
Valencia province
Gandia 1,264
Paterna 1,378
Alicante province
Almoradi 1,282
El Campello 1,997
Denia 1,706
Torrevieja 1,282
Villajoyosa 1,773
Province of Murcia
Cartagena 2,003
La Manga de Mar Menor 2,003
San Javier 2,003
Province of Almeria
El Ejido 1,385
Roquetas 1,240
Vera 1,240
Province of Granada
Almuńecar 1,925
Motril 1,456
Province of Malaga
Benalmadena 1,930
Estepona 2,081
Fuengirola 2,102
Marbella 2,306
Torremolinos 2,047
Province of Baleares
Calvia 2,655
Ibiza 1,644
Palma de Mallorca 1,541
Province of Tenerife
Santa Cruz 1,299
La Laguna 1,299
Province of Las Palmas
Arrecife (Lanzarote) 1,184
Las Palmas 1,781
Puerto de Rosario 1,333
Bloomberg News
Spanish Bonds Fall After Economy Shrinks as Greek Debt Tumbles
By Lucy Meakin and David Goodman on October 23, 2012
Spain’s government bonds fell for a third day after the central bank said gross domestic product shrank for a fifth quarter, harming the nation’s ability to repay its debt.
Spain’s 10-year yields climbed the most in a week after the budget ministry said the deficit would reach 7.3 percent of GDP this year due to cost of bank bailouts, which aren’t counted by the European Union when assessing targets. German bunds rose after European Central Bank Governing Council member Yves Mersch said bond purchases of bailed-out countries would be limited in time, spurring demand for the region’s safest assets. Spain sold bills and Finland auctioned bonds.
“The deficit miss will be another in a succession of budget targets which the Spanish government have failed to achieve,” said Brian Barry, a fixed-income analyst at Investec Bank Plc in London. “Any figures which suggest a worsening of debt dynamics beyond previously forecast levels could impact Spanish bonds.”
Spain’s 10-year yield rose 13 basis points, or 0.13 percentage point, to 5.62 percent at 5 p.m. in London after gaining as much as 15 basis points, the most since Oct. 15. The 5.85 percent bond due in January 2022 fell 0.93, or 9.30 euros per 1,000-euro ($1,297) face amount, to 101.565.
Spanish GDP shrank 0.4 percent from the previous three months, matching the second-quarter contraction, the Bank of Spain said in its monthly bulletin. The budget ministry said without the bank bailout costs, the deficit would meet the target of 6.3 percent, according to an e-mailed statement.
Losing Streak
Spain’s bonds have fallen each day since Prime Minister Mariano Rajoy said on Oct. 19 he’s not facing pressure to seek a sovereign bailout, a condition of ECB debt purchases.
“The market is realizing that a Spanish bailout request will happen later rather than sooner,” and that is pushing up Spanish yields, said Michael Leister, a fixed-income strategist at Commerzbank AG in London. “The market would like to have clarity on the matter.”
Mersch, who heads Luxembourg’s central bank, said there’s no “quantitative determination of volume” of bond purchases, and the ECB “has not lost sight of risk management.” ECB governing council member Klaas Knot told the Dutch Parliament today that the central bank’s previous debt-purchase program had a “limited and temporary effect.”
Greek Opposition
Bonds of so-called peripheral nations declined as Greek Prime Minister Antonis Samaras’s race to secure 31 billion euros of international aid ran into renewed opposition from his coalition partners.
Evangelos Venizelos of Pasok and the Democratic Left’s Fotis Kouvelis, whose parliamentary seats give Samaras the majority he needs to govern, both said further rollback of labor rules would be unacceptable after a meeting with the prime minister in Athens.
The yield on 10-year Italian bonds rose 10 basis points to 4.87 percent, while Greek 10-year yields jumped 47 basis points to 17.05 percent.
Spain sold three-month bills at an average yield of 1.415 percent, up from 1.203 percent at a previous auction on Sept. 25. Investors bid for 4.32 times the amount allocated, up from 3.29 times last month. The government sold six-month securities at 2.023 percent, versus 2.213 percent in September.
The additional yield investors demand to hold Spanish 10- year securities over their German counterparts widened 18 basis points to 405 basis points.
‘Big Divergence’
“We repeatedly see a big divergence between the short-term relief of debt sales being well attended, and the longer-term reality,” said John Wraith, a fixed-income strategist at Bank of America Merrill Lynch in London. “With such disparate yields between core and periphery, the doubts about ultimate sustainability and the ability to continue financing debt in the weaker countries intensify.”
Germany’s 10-year yield fell five basis points to 1.57 percent after climbing to 1.66 percent on Oct. 18, the highest since Sept. 19.
Volatility on German bonds was the highest in euro-area markets today after Greece and Spain, according to measures of 10-year or equivalent-maturity debt, the spread between two- and 10-year securities, and credit-default swaps.
Finland auctioned 1.5 billion euros of 10- and 30-year bonds, with the September 2022 securities drawing an average yield of 1.806 percent. The sale attracted bids for 1.8 times the amount allotted. Investors bought July 2042 debt at a yield of 2.588 percent.
Finland’s 10-year bond yield declined five basis points to 1.81 percent.
The European Union sold 3 billion euros of securities due in 2027 at a sale via banks. The bonds were priced at 36 basis points above the mid-swap rate.
German bonds returned 2.3 percent this year through yesterday, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. Spain’s securities rose 3.2 percent and Finland’s gained 4.7 percent net.
Troika will demand 150 new Greek reforms: report
BERLIN — International auditors will demand Greece carry out a further 150 reforms to its recession-battered economy and suggest holders of Greek debt take a further hit, German newsweekly Spiegel reported Sunday.
Citing an interim version of the findings of the troika of creditors, Spiegel said Athens would get an extra two years to carry out the reforms in its programme but this delay would cost billions of euros.
Greece has completed 60 percent of the reforms already demanded of it, the report says, according to Spiegel. A further 20 percent are being debated by the Greek government, while the rest are outstanding.
Among the additional reforms demanded are a loosening of the hiring-and-firing laws, changes to the minimum-wage rules and a lifting of certain professional privileges, Spiegel said.
The report also suggests that creditors including other eurozone countries take a "haircut", or write-off, on some of their holdings of Greek debt, meaning taxpayers would be funding the bailout.
The European Central Bank would not write off its holding of Greek debt because this would amount to financing Greece, which is strictly forbidden, Spiegel reported.
But the ECB -- which is part of the troika along with the International Monetary Fund and the EU -- is prepared to forgo profits on its Greek debt holding, the weekly said.
German Finance Minister Wolfgang Schaeuble however dismissed the idea of a further haircut for Greece as unrealistic.
"That is a discussion which has little to do with the reality in the member states of the eurozone," he told German radio station Deutschlandfunk.
However, he suggested that Greece could buy back some of its debt at lower prices from bond holders.
Private investors in Greek debt accepted to write off almost all of the value of their holdings as part of the second Greek bailout package negotiated earlier this year.
But so-called "official sector" bondholders, including other eurozone governments, have until now been spared such a write-off.
Greece is striving to persuade the troika it has made enough progress in reforms and painful austerity cuts to unlock a 31.5-billion-euro ($41-billion) slice of aid needed to stave off bankruptcy.
Prime Minister Antonis Samaras has said Greece's coffers will be empty in mid-November. Spiegel said the long-awaited report would be published on November 12 at the latest.
Creditors differ on how much the two-year delay would cost, with the EU and ECB estimating 30 billion euros and the IMF 38 billion euros, Spiegel said.
In order to ensure reforms are carried out, further tranches should be stored in a frozen account and released when changes have been implemented, Spiegel said.
Changes would also be made to the budgetary laws in Greece, meaning, for example, that taxes would automatically rise if reforms are not implemented when required, the newsweekly reported.
Without referring to the specific measures outlined in the Spiegel report, Schaeuble said such a control mechanism could "perhaps create the credibility that we have not had in Greece programmes until now."
The interim report was presented Thursday to officials in Brussels, who are preparing the next meeting of eurozone finance ministers, expected to take place by teleconference on Wednesday, Spiegel said.
Europe's Crisis Spawns Calls for a Breakup—of Spain
BARCELONA, Spain—This vibrant northern region of Catalonia has long been known as the "factory of Spain" for generating wealth that helped sustain the entire nation. Now Catalonia, beaten down by years of recession, has become the battleground in what threatens to become an economic civil war..
In protests large and small, hundreds of thousands of Catalans are embracing a stark proposition: Only by breaking ties with Spain and becoming an independent country can Catalonia free itself from economic malaise.
Catalans go to the polls Nov. 25 for a regional parliamentary election, and polls show pro-independence parties in front.
"Madrid has been draining us dry for too long," says Josep Casadella, a corporate human-resources administrator. He became an Internet sensation not long ago after posting a video of himself refusing to pay the fare at a toll booth and complaining that Spain should build free roads for all the taxes it collects.
The region's president, Artur Mas, has called the marriage between Catalonia and Spain's capital one of "mutual fatigue." He has pledged to place an independence referendum before voters.
Appalled at the separatist sentiment, a military veterans' association said that politicians pushing for Catalonian independence should be tried for "high treason." In recent days, pro-Spanish-unity protesters held a smaller demonstration of their own. Marchers held a sign reading: "Help, Europe. Nacionalists are crazy."
Spain's internal struggle echoes a larger debate convulsing the euro zone itself, as wealthier northern nations complain about supporting poorer southern ones. But now, as Europe enters its fifth year of crisis, the economic strains are deepening the fractures within some nations.
In Spain and Belgium, and to a degree Italy, local and national governments are battling over how to allocate scarce resources. Even within Germany, which is economically stronger and politically stable, richer areas are grumbling about the cost of subsidizing the poorer areas.
Catalonia's president, Artur Mas, called the marriage between his region and the Spanish capital one COF +0.05% of "mutual fatigue" in a speech, likening it to the way "northern and southern Europe have grown weary of one another."
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Live: Europe's Debt Crisis Stream
Cultural and linguistic variances within many EU countries only make matters worse. Catalonia itself is a prime example: Its own language is widely spoken and instilled in younger generations as the main language in most elementary schools.
Throughout the continent "there are some very long-standing strains and tensions of unequal regional economic development that are now being brought to the surface," says Adrian Smith, editor of the journal European Urban and Regional Studies.
Catalonia's turmoil represents a major threat to European leaders' hope of containing Europe's crisis by stabilizing Spain, which is home to the euro zone's fourth-largest economy but is also vying with Greece for the highest unemployment rate in the euro zone, around 25%. Policy makers had hoped that EU aid would keep Spain afloat while investors digest losses in Greece, which is even more troubled.
Spain's financial markets are quivering at the mere talk of secession of Catalonia, which produces almost 19% of Spain's economic output and 21% of its taxes. Investors fear the revolt will undermine Prime Minister Mariano Rajoy's plan to get a grip on spending, particularly in the 17 regional governments that have been a big source of Spain's deficit.
If pro-independence parties triumph at the ballot box in next month's regional election, Catalonia's leader, Mr. Mas, will face pressure to make good on a vow to place an independence referendum before voters. National authorities say that would be illegal.
Mr. Mas studiously avoids the word "independence" to define his goal. Some analysts believe he would satisfied simply with a more favorable revenue-sharing deal. Meanwhile, impelled by swelling support for secession, he has become bolder, asserting publicly several times that "Catalans demand the instruments of State."
"We are convinced that an independent Catalonia is perfectly viable economically," says Albert Carreras, Catalonia's finance secretary. "Rather, we question whether Spain is viable if Catalonia were independent."
Further muddying the Spanish political picture, pro-independence groups in Basque Country—another region where separatist sentiment is strong—won control of parliament there in elections Oct. 21.
Outside of Spain, Belgium faces the biggest separatist strain. There, a vibrant separatist movement in the wealthier, Dutch-speaking Flanders wants to cut ties with poorer, French-speaking Wallonia. For the moment, a political impasse has been avoided by formation of a coalition government that excludes the separatist N-VA party, even though it won the most votes.
Still, local elections this month only heightened tensions. The N-VA's leader, Bart de Wever, won the mayoral race in Antwerp, the country's second-largest city, and used his acceptance speech to call for more independence. "Your government does not have the support of Flanders," he told Prime Minister Elio Di Rupo, who hails from Wallonia.
In Italy, as in Spain, the regional spats are partly rooted in precrisis deals that gave regional governments more spending authority, but without more responsibility to raise revenue, says Alberto Alesina, a Harvard University economist. "All that people are talking about are enormous scandals and wasting of money at the regional level," says Mr. Alesina. In Italy, he says, the south is the bigger culprit but says the north is hardly blameless.
When the southern island of Sicily recently needed a €400 million transfer, or about $520 million, from the central government to continue paying its bills, Northern Italians grumbled about claims of payroll-padding there. They cited as an example the island's 27,000-strong corps of forest rangers hired during the fire season. Sicily is roughly the size of Massachusetts.
In Spain, financial woes are putting the union on the rocks. In August, Catalonia said it would seek a €5 billion bailout from the national government to make debt payments. Catalan officials say they would have no need for budget-cutting or bailouts if the central government were distributing tax revenue fairly. Some 43 cents of every euro Catalonia pays in taxes doesn't come home, according to data compiled by the Catalonia government.
Underlying the grievances is Catalans' image of themselves as a hardworking, thrifty people, "the Germans or Lutherans of Spain," says sociologist Enrique Gil Calvo, who was born in a neighboring northern region. Residents of Catalonia, about three-quarters of whom speak Catalan, are openly scornful of what they consider to be the indolence of southern Spaniards.
People from Madrid, for their part, poke fun at what they perceive to be Catalans' workaholic, stingy nature. The discovery of copper wire, one joke goes, came about as a result of two Catalans engaging in a tug of war over a penny.
The debate is no laughing matter to Catalan independentistas, as the secession supporters are known. They view themselves as patriots "just like George Washington," says Jaume Vallcorba, a businessman who heads a pro-independence group, Fundacio Catalunya Estat.
As an independent nation, Catalonia would have GDP per capita of €30,500, which would rank it seventh in the European Union, just behind Denmark and ahead of Germany, Mr. Vallcorba's group says in its presentation. He adds that Catalonia's exports to the rest of the world recently surpassed its sales to the rest of Spain.
Spain's prime minister, Mr. Rajoy, termed the Catalan independence push "madness of colossal proportions" in a speech this month.
In a briefing, a senior official in Madrid said that Catalans conveniently overlook help they get from the national government, such as the billions of euros being used to bail out a locally run savings bank.
Even some Catalans think the independentistas "are painting a picture that is prettier than the reality would be," says José María Gay de Liébana, an economist at the University of Barcelona who can trace his Catalan lineage to the Middle Ages. How, he asks, would Catalonia's already indebted and deficit-ridden government shoulder the added economic burden of opening embassies all over the world, creating its own police and customs agencies, and possibly an army?
Mr. Gay de Liébana adds that Catalonia would have to assume a reasonable share of Spain's national debt, perhaps as much as €200 billion. And he wonders whether the breakaway nation would ever be accepted into the EU, particularly in the face of certain opposition from Spain. "People would say we abandoned the ship when things got tough, instead of rowing together," he says.
As Spain's economy sinks further into recession, however, more people seem willing to take the plunge to independence. "There are many people who didn't favor independence a couple of years ago, who now view it as our only hope," says Laia Serrano, an economist who last year formed a nonprofit group, BarcelonActua, to help the growing number of recession victims.
On a recent Thursday night, she had set up a soup kitchen on a downtown Barcelona street where about 60 people lined up for meal boxes. One 78-year-old retiree said the situation reminded him of waiting for ration tickets in the hard years after the Spanish Civil War of the 1930s.
"Everyone says that independence will mean more jobs, so we have to support it," said another man, who said he was 35 years old and unemployed for four years.
Clashes with central authority are a recurring theme in Catalan history. In the 18th-century War of Spanish Succession, Spain's Bourbon king, Philip V, crushed Catalan forces who had cast their lot with his Austrian rival. Later, during the Civil War, Catalonia was a stronghold of resistance to another strongman, Gen. Francisco Franco, who would harshly suppress Catalan culture during his four-decade dictatorship.
Perhaps because Catalonia couldn't count on much support from central authorities, an aggressive spirit of entrepreneurship flourished. "Catalonia was globalized before anyone knew what that meant," says Salvador Cardús i Ros, a political writer. Even in the 19th century, he notes, a distinctively Catalan product, the tangy sausage butifarra, was marketed abroad and manufactured with machinery from Germany, meat from Northern Europe and spices from Asia. Today Barcelona is home to international heavyweights such as Mango MNG Holding SL, the women's fashion retailer, and Grupo Planeta, the dominant publisher in Spain and Latin America.
Catalonia is a big tax contributor to the central government. But officials in Barcelona complain the money isn't redistributed fairly. The annual deficit between what Catalonia pays in taxes and what it gets back from Madrid represents about 8% of Catalonia's total output, roughly €16 billion, Catalonian officials calculate.
Catalans complain that, as a consequence of underinvestment, their local roads and infrastructure is inferior to that in poorer parts of Spain. "We have to choose between using public roads that are dangerous, or toll roads that are expensive," says Manel Xifra, president of Comexi, a packaging-machinery company with €100 million in revenue. In Catalonia, toll roads make up almost three times the proportion of the regional highway system as they do in the region of Madrid—a smaller geographical area, but one that is roughly similar in GDP and population.
He also complains that national officials have dallied for years in making a logistically important investment to connect Barcelona's port to its train line. And that Barcelona's airport provides too few international flights, forcing transfers when he travels for business.
Some Catalan executives, though, are worried about the impact of the independentistas on business. Jose Manuel Lara, the chief of Grupo Planeta, recently told a radio interviewer that much of the company's operations would need to be transferred out of Catalonia if it seceded, because it wouldn't make sense for a Spanish language publisher to be based in a region where Catalan was the official language.
To cover its expenses, Catalonia's government has ratcheted up the top marginal income-tax rate to 56%. That is the highest in Spain, and only a hair below Sweden, at 56.6%.
"You can't tolerate a Swedish level of taxes and African level highways," says Xavier Sala-i-Martín, a Catalan economist who teaches at Columbia University and who says he is "pro choice," supporting the Catalans' effort to determine their future democratically.
Catalonia's frustrations surged to the forefront during a Sept. 11 independence rally that drew more than one million demonstrators. Rosa Maria Sastre, an 81-year-old retiree, was too infirm to join the independentistas, so her granddaughter marched carrying a poster-size photograph of Mrs. Sastre. "We'd been waiting a long time to send a message," Mrs. Sastre says.
On both sides, ardor is rising. The mayor of the Catalan city of Vic recently draped the red-and-yellow striped Catalan banner on the balcony of the historic municipal hall there. A few nights later, vandals climbed up and burned the flag to cinders.
Investors remain wary of Europe even as crisis eases
By PAN PYLAS. The Associated Press
London • The world’s markets may believe that the worst of the financial crisis in Europe is over after three turbulent years, but those people who control the purse strings of the world’s businesses are not breathing any easier.
An annual survey of finance directors from global business consultancy BDO finds that the crisis over too much government debt in Europe remains one of their key concerns — so much so that Greece is considered a riskier place to invest and set up business in than war-torn Syria.
Only Iran and Iraq are considered more risky than Greece, which also struggles to convince its international creditors that it deserves bailout loans to avoid bankruptcy and a possible euro exit.
"CFOs are becoming increasingly wary of Southern Europe, parts of which they now see as risky as the politically unstable countries of the Middle East," said BDO chief executive Martin Van Roekel.
Greece isn’t the only country in the 17-country group that uses the euro in the survey’s top 10 riskiest countries to invest in. Spain, which even as the eurozone’s No. 4 economy with a long-standing relationship with Latin America, stands at No. 7.
This reluctance by finance directors, particularly from fast-growing economies such as Brazil and China, to invest in Europe’s indebted countries goes to the heart of the financial crisis. A major part of these countries’ recovery is dependent on the private sector stepping in to fill the investment gap left by cuts in government spending.
While countries like Greece and Spain are struggling to convince international business that they are good places to invest, others are prospering. Despite recent signs of slowing down, China is considered the most attractive country for expansion, closely followed by the U.S. Others such as Brazil, India, Germany and the U.K. also feature in the top 10 of countries ripe for expansion.
Overall, the survey from BDO found that CFOs around the world are finding it more difficult to conduct business abroad. As well as an uncertain global economic situation, they cite increased regulation and greater competition.
Van Roekel also said he is "surprised" that more finance directors haven’t voiced concerns about the heavy debts of countries outside of Europe, notably Japan and the U.S.
Though Japan’s debt is worth around double the size of its economy, the country has managed to avoid stoking too many investor concerns because most of it is self-financed by its own pension funds.
The U.S., which has the advantage of having the dollar, the world’s reserve currency, has problems of its own and the winner of the presidential election, whoever it is, will soon have to grapple with the "fiscal cliff" — a package of huge tax hikes and spending cuts that will automatically be introduced if the different arms of government don’t come to a budget agreement.
BDO surveyed 1,000 CFOs from medium-sized companies currently planning foreign investment.
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