High electricity prices in Spain
- In Germany one pays 0.1406, in UK 0.1365 and in Holland 0.1300. The cheapest electricity is in Bulgaria, at 0.0704 euro per kWh.
Electricity prices in Spain have increased 80% since 2004, and electricity companies are making requests for further hikes.
The Managing Director of Solar power company Abengoa has demanded a 43% increase in electricity charges.
13.2% of dwellings empty…….
- Unoccupied properties amount to 13.2% of all dwellings, that is 3,417,064, in other words almost three and a half million! A large number of which are for sale.
Most empty dwellings can be found in the province of Barcelona (338,645); followed by Madrid (337,212); Valencia (228,870); Alicante (192,184) and Seville (124,573).
........whilst 26,000 to 30,000 are forced to live on the streets
The Catholic organisation Caritas has found that 26,000 to 30,000 people are living rough on the streets; 10% of whom have a university degree. Most are single men, Spanish and foreigners, unable to find a job.
‘Few sign of recovery’
Rating Agency Standard & Poor’s has examined the Spanish property market and concludes that there are ‘few signs of recovery.’ They foresee that the fall in prices will continue next year and warn that banks will continue taking over properties where owners cannot pay their loans.
Banks hold now approximately 30 billion euros worth of unsaleable property.
Developers ask for public or private injection
The President of the Valencia Property Developers has asked for a public or private injection of initially 23,000 million euros to assist the poor property sector in it’s, ‘grave situation’ promising 700,000 jobs in return but without specifying how the dwellings to be build can be sold.
Freezing ex-tourist boss
In September, Rafael Betoret, the former leader of the cabinet in the Ministry of Tourism in the Valencia regional government, was sentenced to re-pay the value of the clothes he received free of charge from the Gűrtel corruption companies or to return the articles. He has now given back 4 jackets, 11 dresses and 2 overcoats.
If you meet a naked and freezing man in the streets of Valencia, it may be Betoret, or one of his corrupt friends in the Valencia Government!
50.9 million tourists in 10 first months
Spain had 50.9 million tourists in the first 10 months of the year, 8% more than in the same period last year. The Canaries saw a 19.2% increase; The Balearics 10.1 and the Valencia region 7.3%.
More tourists came from the UK, up 12.8 from September to October; Germany up 5.7% and France 4.9%.
Condemned banker reprieved by Government
- He subsequently applied to the Government for clemency and last week it was granted by the outgoing Government.
The newspaper El Mundo asked its readers if they agreed with the pardon; 97% voted no. I was one of them.
BBVA improve mortgage conditions
BBVA has improved mortgage conditions for 45,000 owners, permitting the clients to postpone two payments and to extend the mortgage period up to 40 years. Bank with a soft heart? No, they feared being burdened with more unsaleable properties.
8 Spanish provinces top unemployment in Europe
EU have listed the 10 regions with the highest unemployment in Europe. Eight of them are Spanish: Canarias, Andalusia, Ceuta, Melilla, Murcia, Valencia, Extremadura and Castilla-La Mancha. The other regions on the list are French overseas territories, like the island La Reunion.
The Canary Islands head the list with 28.7% unemployment, followed by Andalusia 28%.
Car production falls
Car manufacturers predict a fall in production this year, compared with 2010, expecting to make less than 2.38 million units. In 2006 passenger vehicle production reached 2.77 million vehicles.
New car sale is expected to fall below 800,000 units this year.
1,000 years prison term for ETA bomber
Olarra Guridi has been sentenced to 1,000 years imprisonment for a bombing in the centre of Madrid in November 2001, which injured 95 people. This is the first sentence imposed following the Basque terrorists decision to give up the armed struggle.
Only 30,808 mortgages in September
In September only 30,808 mortgages for the purchase of a dwelling, were approved, 42% less than the same month last year. In the nine first months of this year the number of mortgages contracted is down 31.1%.
The average mortgage approved this year is 111,034 euros.
The crisis this week
Rating Agency Standard & Poor’s has downgraded the rating of Belgium from AA+ to AA. It has also downgraded Banco Santander, BBVA and a number of other major European banks.
Agency Fitch has reduced by one step the long term debts of Portugal, from BB+ to BBB-, whilst Portuguese trade unions have called for the largest general strike for 23 years
Moody’s has reduced the rating for Hungarian debts from Baa3 to Ba1 (rubbish bonds)
Moody’s has also issued a stern warning to the Euro Zone ‘that the lack of political measures to stabilise the markets may lead to a degradation of the bonds of all countries in the group to a ‘speculative level’ (meaning rubbish bonds).
The Finance Ministers of the Euro Zone have given the green light for the release of the 8,000 million euro payment to Greece
President Barroso of the European Commission has again proposed the launching of so called ‘Eurobonds’ (meaning Germany is becoming a permanent payer for all the fiestas in the southern part of the Euro Zone)
Chancellor Merkel of Germany has again vehemently refused the proposal of Eurobonds
Merkel and the French President have had another meeting over last weekend, producing another new plan for saving the Euro. The plan will be discussed at a summit meeting of European leaders on 9th December
The Spanish country risk continues dangerously high, at 443.8 points on Friday and 420 on Wednesday morning
OECD has predicted economic growth of only 0.3% for Spain in 2012
Italy had to pay 8% interest on its last bond issue
Spanish Vice President of the European Commission with responsibility for the economy, Joaquin Almunia, has warned that there are only ‘a few days left’ to solve the financial crisis
German Chancellor Merkel has warned that Europe will need 10 years to overcome the debt crisis. The French Director of FMI, Christine Lagarde, has said that the world economy may lose a decade due to the crisis
British magazine The Economist warns in its latest issue that the breakdown of the euro could happen in the coming weeks
Pensions and public health in danger
By Per Svensson
Incoming Prime Minister Mariano Rajoy, before the elections said, his austerity drive would not touch education, the pensions or public health. On the other side he declared that he had not promised miracles. Probably one of the two statements must be corrected. To save pensions and public health provision in the present situation will need a miracle.
More unemployed – less contributors
In 2007, at the peak of the boom, there were 2.71 contributors to each pensioner and the Social Security System could meet all its obligations and even transfer funds to the state budget. However, with the collapse of the artificial property market, many workers were laid off, with a double effect: No contributions to the SS-system were paid for them and they needed unemployment payment.
There are now over 5 million unemployed, 2.1 million more than at the peak of the boom and 360,000 more over this past year. And with the Spanish economy being in a state of no growth since the summer, with a recession expected in the coming year, and Rajoy having promised to cut down the huge number of public employees, we can expect an acceleration in unemployment.
Close to a deficit
The number of contributors to the Social Security is now down to 2.47 per pensioner. The number, where the system pays out more than its income, is 2.1. We are very close to a situation where a deficit is being produced, instead of a surplus. In the 10 first months of this year the surplus was down to 5,600 million euros, 44.5% less than in the same time of last year!
Some economists think that the system is already ‘in the red’ and will end this year with a deficit of 200 to 300 million euros. We shall know for sure when the final figures for this year are published in March next year.
Generalitat, the government of the Catalan region, presented last week a program to reduce its staggering deficit. In addition to introducing charges on transport, water, petrol and university studies, it will reduce the salaries of the employees in the public sector.
The Generalitat avoids the unpopular word ‘Copago’ (letting the patients in the public health system pay part of their bills) by inventing what they call ‘ticket moderator’ which is really a copago. This system may also be applied to the use of medicines at home, with a 40% contribution by the patients.
The completely free health services is nearing its end.
The Spanish town of Benalup in Andalucia.
Giles Tremlett The Observer, Sunday 20 November 2011
The shiny Audis and BMWs that still line the narrow streets of Benalup are a reminder that this Andalucían country town once boasted the greatest number of luxury cars per head in the south-western province of Cádiz.
These days this charming place, set bull-rearing countryside inland from Gibraltar, holds a different kind of record: not only the worst unemployment rate in the country, but the worst in Europe.
"I don't know whether they can fix this," said 19-year-old Juan Carlos Gutiérrez, one of hundreds of young people who dropped out of school and now drift between part-time work, training courses and the dole queue. "I've picked asparagus and worked in a packing factory, but the jobs never last. The future is screwed."
"Everyone our age is out of work," agreed Nora Pérez, 22, as she waited for the hearse bringing her grandmother to her funeral in the picturesque square of Our Lady of Perpetual Help. "My father went to Germany when he was young. Our generation may emigrate as well. Some of my friends have already left."
A grey-bearded, bespectacled man grins from a campaign poster overlooking the tiny ornamental gardens and bandstand on San Juan Street and calls on the people of Benalup to "sign up to change". He is Mariano Rajoy, the conservative People's party (PP) leader set to become Spain's prime minister at the general election on Sunday.( He won't take office until mid December- see below.CVS)
Rajoy will inherit a country in crisis. Growth is zero and unemployment has hit 23%. In Cádiz province, one in three is jobless. In Benalup 1,500 adults are without work. In a country where 46% of the under-25s cannot find employment, Benalup's unqualified youngsters are getting desperate.
"Many got into debt when times were good, buying houses and cars and starting families," says Ricardo Jiménez, who runs the local branch of the Catholic charity Caritas. "Families are very close and help one another out, but we already help 80 families and more come every month. Some are asking for help to feed their babies," he said. That means almost 5% of the town needs church handouts.
Others are handed money by the town hall or given whatever jobs local politicians can invent. "If we have to dig a ditch we do it by hand, rather than with a digger, because that way we employ more people," said councillor Manuel Moguel.
When Luis Moreno, 23, left school five years ago there was no need to worry about finding a job. All you had to do was walk on to a building site. "It was very simple," he says.
Now he receives €526 (£450) a month to attend a training course designed to turn a dozen locals into graphic designers, though design jobs are not plentiful in Benalup. "We have to learn new skills," he says. He is one of the lucky ones. Courses like this are heavily oversubscribed.
As markets demand ever higher interest payments for lending Spain money, and the European Union instructs its politicians to slash its deficit, public money is drying up. Yields on Spanish debt have now overtaken Italy's and soared to the same levels at which Greece and Portugal needed to be bailed out. And if Spain – a much larger economy – fails, then it may bring down the euro.
Spain's biggest problem remains the money owed to banks for property or land bought during a decade-long boom fuelled by cheap credit. The rows of unsold new homes in Benalup are evidence of Spain's housing bubble, which burst in 2008, leaving 700,000 unsold new houses on the market.
By 2004, more than 80% of Benalup's labour force worked in construction, building homes or holiday apartments along the nearby Mediterranean coast.
"Kids left school at 16 because they could earn €3,000 a month working a three-and-a-half-day week," says Moguel. "I had university-trained engineers working in my company who were earning less than that."
As money poured into people's pockets, the number of banks in town doubled. La Caixa, a newly arrived savings bank, started a local lending war – its manager winning awards. "Kids were buying houses and cars with the loans. And those who already had a house bought another one," says Moguel.
Now the town is plastered with "For Sale" signs from Servihabitat, the real estate branch of La Caixa, which is repossessing properties – though owners must still pay off their full debt after homes have been taken away. "That's unfair. You can't have a bank saying your home is worth €180,000, lending you the money and then repossessing it at half that price," says Moguel, a Socialist. He is uncomfortably aware that Spain's torrid affair with speculative capitalism happened largely on the watch of the Socialist government led by outgoing prime minister José Luis Rodríguez Zapatero.
Even in Benalup, where the Socialists once won 90% of the vote and which still remembers the bloody suppression of an uprising by local anarchists in the 1930s, the vote is now sliding to the right. "It used to be tough in this town to be from the People's party, but we won 43% of the vote at municipal elections in May," says Vicente Peña, a 40-year-old veterinarian who heads the party's local branch.
Peña delivers the same diagnosis of Benalup's ills as his Socialist opponents. "Too many people dropped out of school to become bricklayers. They can't even write a sentence properly."
Vicente Ruiz, owner of the El Buyí bar, will vote for Rajoy. "When Caritas is the biggest employer in town, things are really bad," he says. "It is shameful to have to ask for charity. What we need is a Mrs Thatcher."
Public money is being spent on silly projects, clients in his bar agree. "I've had 60-year-old women coming to bricklaying courses," says one, Nicolás. "It is ridiculous, but they each get their own overalls and hammer."
Peña says that, among other things, people will have to go back to the land. But even there things are going badly. Local horses, bred at stud farms set up as a trophy hobby by nouveau riche local builders, are now being sacrificed for meat and exported to dinner tables in northern Spain.
Pura Raza Española ponies are going for €150. Even fighting bulls are on the decline. "Town halls subsidised many bullfights," says rancher Salvador Gaviria. "But now they have no money, so the market is sinking." The number of bullfights across Spain has fallen by a third as a result.
Benalup is too far inland from the beach to attract tourists. A golf resort set up by a Belgian company, Fairplay, is said to be struggling. The Hotel Utopia, a boutique-style establishment that opened recently, was almost empty this week.
Spaniards hope Rajoy, who has been deliberately ambiguous about his austerity programme and liberal reform plans, can fix their problems. "If changing to Rajoy is going to solve everything, then why haven't the markets – which know he is going to win — shown they trust him?" asks Moguel.
Rajoy will come under immediate pressure to reveal how he plans to square a budget that needs some €41bn of savings next year. Those must come on top of austerity measures already imposed by Zapatero, who cut civil service pay and froze pensions.
Alberto Ruíz Gallardón, PP mayor of Madrid and a probable minister, has called on the socialists to hand over power quickly. "It could be dangerous to prolong the caretaker period," he says.
But parliament does not meet again until 13 December and it may take another fortnight to appoint Rajoy formally. Even if he takes over immediately, jobs are unlikely to reappear in Benalup.
Fortunately it retains the Cádiz tradition of laughing at adversity. Benalup's carnival musical groups are already practising the typical chirigota songs that parody the powerful. Rajoy, Angela Merkel and the European Central Bank can all expect to feature in them by the time carnival comes around in February.
Spanish Banks UNABLE to Sell Toxic Real Estate Assets
Overseas Property Mall on Thursday, November 24th, 2011 in European
Property, Spanish Property
Spain's markets are in a fix, and there seems to be no creditable solution
in sight. In fact, there is no credit. Lending activity in the country has
slowed down dramatically, having experienced its greatest fall this year (a
record 2.64% decline till September). The property markets gone bust, and
looks to have taken all the air out of Europe's fourth largest economy.
Borrowers keep defaulting, and homes foreclosing. The only thing that's left
soaring here is the national unemployment rate (22.6% at present vs. 7.9% in
summer 2009).
Meanwhile, the banks seem to be even more cash-strapped than the population
itself. The Spanish banking system was an important player in the country's
once robust real estate and construction markets, and still pays deeply for
its generous missteps. Out of the total 1.79 trillion euros of outstanding
loans that the banks currently hold, 308 billion euros is taken up by real
estate, most of which is reportedly as good as gone. Spain's property boom,
much like the rest of the crisis-riddled world, was entirely misguided. Land
developments were largely concentrated in areas that have no real value;
where given the current population trends, demand for units is not expected
to materialise any time soon, not in the next 10-years at least. Banks then
have a significant chunk of their money holed up in real estate that nobody
wants to buy.
Spain's financial sector was at the receiving end of both bailout funds and
increased regulation following the global economic crisis of 2008. The
public has coughed up 17.7 billion euros (and counting) to help keep banks
out of the red; however, the number of surviving banks stands greatly
reduced. Analysts believe that given the central banks increased demands for
adequate cushioning; the end count is bound to be even smaller. Small to
medium sized banks are expected to virtually go poof, since the majority of
their business came from the property market, which now stands largely
defunct.
Following the crash, property prices in Spain have witnessed massive
downward reductions. Overall, home prices are now 28% lower than what they
were in pre-bust days; whereas, land values have taken a hit of around 33%.
As joblessness mounts and foreclosures become imminent, banks are expected
to add even more real estate to their already overflowing portfolios. It is
unlikely that these properties will be turned over anywhere in the near
future; banks aren't willing to unload at washout rates, and buyers refuse
to pay stated premiums.
With the last government having largely failed to bring stability to the
ongoing crisis, the newly elected popular party vows to not let the decline
continue any further. The country's problems, however, have outgrown its
capacity to endure. The European debt crisis, of which Spain is an active
participant, is nowhere near resolving itself. The nations industry is at a
standstill; the banks' hesitance (and apparent inability) to lend, coupled
with the new leaderships proposed austerity drive can then only prolong this
lull. Further, the banking systems present provisioning is based around
best-case scenarios, if anything the government might have to pump in more
funds to help keep the entire sector from falling under. I say, heads up
ECB, another troubled soul comes your way.
Si (
No(
