Euromundo Global MADRID EDICIÓN DIGITAL
2 de junio de 2020, 3:17:00
Economía


Business Over Tapas

By Lenox Napier and Andrew Brociner


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:

The dog-days of August: our local village fiesta, built around the Saint's Day into a massive five-day-event, begins this Saturday. Bangs, explosions, music until late, fireworks and thunderflashes. Then, as the cars all leave for Madrid and Barcelona... peace.

Housing:

'Spanish property sales are continuing to decline, falling 5.5 per cent year-on-year in June. Figures from the National Statistics Institute revealed just 23,966 transactions were made nationwide in the final month of Q2. This is the second consecutive month of decline, with sales returning to negative territory in May following a drop of 3.7 per cent'... From Property Showrooms.

Tonight, the British ITV current affairs programme, will broadcast a special report on September 12th on whether now is a good time to buy a home in Spain. This should make interesting television.

Tourism:

'Despite it being summer, 10 Spanish public airports served fewer than 1,000 passengers last month, according to El Economista newspaper, which asks why these expensive, loss making airports aren’t closed'...  From David Jackson.

Finance:

'Spanish public debt continued to climb in June with 6.368 billion more added to the books, the Bank of Spain revealed Friday.

The increase puts the total amount owed by Spain's public administrations at 943.702 billion, an amount equivalent to 90.3 percent of gross domestic product, according to the central bank, which put GDP last year at 1.045 trillion euros'...  From El País in English

'Spanish banks' bad loans as a percentage of total credit rose to a fresh high of 11.6 percent in June, Bank of Spain data showed on Monday, as more households and small companies, particularly those from the property sector, struggle with debts. The rise in loans in arrears has dragged on Spanish banks' earnings in the first half of 2013, even though in the second quarter some reported a slower rate of increase in bad loans'... Found at the Chicago Tribune.

'...Everyone has heard of at least one or two white elephants, but the truth is, Spain is plagued with them, 10's of billions of euros down the drain and more than likely 10% in a pocket or a brown envelope'... Eye on Spain lists ten of the most extravagant examples of public waste...

The Economist tells the story of the 'Cost del Sol', why Spanish solar energy has suddenly gone south: 'Ángel Miralda was proud of his 320 solar panels in a field near Benabarre, in northern Spain. They added 56 kilowatts of clean-energy capacity to a country that depended on oil imports. The panels cost €500,000 ($735,000): €150,000 from an early-retirement pay-off from IBM’s Barcelona office, the rest from a bank loan. The government promised a 10% annual return on such projects. That was in 2008. Five years later, after subsidies were cut on July 12th for the third time since 2012, his income is down by 40% and he is struggling to repay the loan. “There is no legal security in Spain,” he complains'...

A similar story in El Mundo: 'Iñaki Alonso had three still unconnected solar panels on his roof for six months while waiting for the Government to prepare a new regulation on energy consumption. On 18 July, the draft of the expected Decree on self-production was published and Iñaki decided to dismantle his photovoltaic panels. "The numbers don't add up, it is unworkable," he says'...

'A new EU study revealing that road-building in Spain costs almost twice as much as in Germany has led to demands for explanations and investigations into procurement practices.

A report from the European Court of Auditors titled "Are EU Cohesion Policy funds well spent on roads?" has assessed whether road infrastructure projects financed by Cohesion Policy funds have achieved their objectives at a reasonable cost. ...The study looked at co-financed road projects in Germany, Greece, Poland and Spain.

Projects audited in Germany had the lowest cost per 1000 square metres (€287,043) compared with €496,208 in Spain but there was no evidence that this was a result of lower labour costs. The average cost in the projects audited of 1km of road per AADT (Annual Average Daily Traffic) was more than four times higher in Spain than in Germany, with Poland and Greece being in the middle between the two extremes'... From The Local

Corruption:

'Corruption is a journey into the night of the dark side of human nature, the place where, for F. Scott Fitzgerald, it is always three o'clock in the morning. It is a journey with moral and ethical tolls, but also an economic cost. And although there are no specific figures, experts' estimates suggest that the numbers are high, and the damage considerable. Friedrich Schneider, a lecturer in Economics at the Johannes Kepler University in Linz, Austria, a specialist in the economic impact of corruption, has made some calculations for Spain: "Around one percent of GDP," he says. In other words, the cost to the Spanish economy of corruption is some 10.5 billion euros a year'...  The start of an essay in El País in English

Agriculture:

Last week, we saw that Spain was the country with the most genetically modified crops in the entire European Union, (and that there is no public record on the location of these crops).   From True Activist: 'The Italians are on to something big that could cause a ripple effect throughout the EU. Three Italian ministries have signed a decree banning the cultivation of Monsanto’s genetically modified corn, citing environmental concerns, the agriculture ministry said last week. Earlier this year, Poland had become the eighth EU member state to ban the cultivation of genetically modified (GM) crops. Seven other EU member states have already imposed bans on the cultivation of GM crops approved by the European Food Safety Authority (EFSA) as safe: Austria, France, Germany, Hungary, Luxembourg, Greece and Bulgaria. Now Italy has joined the ranks'...

Gibraltar:

El Mundo produces a surprisingly balanced and interesting essay from Felipe Sahagún called 'From Utrecht to Madrid 1713 – 2013': -  'The response of the Spanish to Gibraltar's latest provocations, if not corrected properly and quickly, will further weaken Spain's position. Threats, when they are in pure rhetoric or are not supported on the ability to respond to the answers of the adversary, are always counterproductive and history, law, politics and the economy all contribute to condition and limit the room for manoeuvre of the Spanish Government.

The last few misunderstandings should be the catalyst to begin to lay the groundwork for a final settlement of the conflict, coinciding with the 300th anniversary of the UK Treaty of Utrecht'...      A rather less balanced article, in the Wall Street Journal, is written by Spain's Foreign Minister Margallo. An excerpt: '...In addition to this non-compliance concerning the sovereignty question, the British government and the Gibraltarian local authorities have committed numerous other breaches of their obligations. The issue of most immediate concern is the dropping of 70 concrete blocks into the Bay of Gibraltar. Spain has no doubt about its sovereignty over these waters. They are off the isthmus connecting Gibraltar to Spain, which was never ceded by Spain to the U.K. under the Treaty of Utrecht. These waters and this land therefore have always remained under Spanish sovereignty'...

'The President of the European Commission, José Manuel Durão Barroso, has asked the President of the Government, Mariano Rajoy, that the Spanish authorities "respect the laws of the European Union" in its dispute with the United Kingdom over tensions in Gibraltar, at the same time he pointed out that charging a fee to cross the border would be "illegal" under European law'...  From El Mundo earlier this week.

From The Huff Post UK: ...'"President Barroso expressed his hope that Spain and the UK will address these matters in a way that is in line with their common membership in the EU."  It has been reported that UK officials are examining the potential to disrupt Spain's lucrative tourist industry as well as blocking its policy initiatives at the EU. Pressed repeatedly on the potential for such action, a Number 10 spokesman told reporters: "Our preference here is to resolve this via political means and through dialogue with the Spanish government'...

'...But, if things really went bad, what might happen to the 750,000 Britons living in Spain? A gun-boat sent to the nearest port: one small-bag each, no pushing or shoving please? Would we all end up back in Britain placed in some camp outside Cardiff, like the Moors from Granada, the door-keys to our houses still held piteously in our hands?'  From The Entertainer Online

Politics:

'The repercussions of the Bárcenas affair, being played out in the High Court against a backdrop of burgeoning voter disaffection, is creating a schism in a political party accustomed to closing ranks when controversy looms.

In testimony given last week, current Popular Party (PP) secretary general, María Dolores de Cospedal, and two of her predecessors in the post have failed to provide official data to disprove the claims of former party treasurer Luis Bárcenas, who is in preventive custody accused of tax fraud and money laundering'...  El País in English has the story.

Ex-Pat Life

'A very dependable feature of people who live abroad is finding them huddled together in bars and restaurants, talking not just about their homelands, but about the experience of leaving. And strangely enough, these groups of ex-pats aren’t necessarily all from the same home countries, often the mere experience of trading lands and cultures is enough to link them together and build the foundations of a friendship. I knew a decent amount of ex-pats — of varying lengths of stay — back in America, and it’s reassuring to see that here in Europe, the “foreigner” bars are just as prevalent and filled with the same warm, nostalgic chatter. But one thing that undoubtedly exists between all of us, something that lingers unspoken at all of our gatherings, is fear'...   'What Happens When You Live abroad' from Extragoodshit.

Essay:

INDECENT: A populist article from Arturo Pérez-Reverte

I'd like to convey to the Government of the past, the present, and future the following:

BE so good as to make a plan so that the banks return to the public purse those billions of euros which you have given them to increase the profits of their shareholders and managers.

PUT a limit on the excesses of the telephone and ADSL companies offering the most expensive and worst services in Europe.

ELIMINATE the duplication of many public administrations, by deleting unnecessary departments, reassigning career officials and putting an end to positions of 'friends' and other posts appointed through 'favours' that, beyond being merely unnecessary for the most part, are the ones who tend to be paid the highest throughout the public administrations and their theoretical role can be filled by way more qualified public servants who are, so often, unfortunately underused.

OBLIGE the corrupt party politicians to return the money equivalent to the damages that they have caused to the Public Purse through their poor management and/or their misdeeds, and to toughen the criminal code with faster judicial proceedings and exemplary punishments for them.

INDECENT, is that the minimum wage of a worker is 624€ / month and a member of parliament is at 3,996€, which can reach, with expenses and 'extras', anything up to 6,500 €/ month. Or of course more for quite a few different reasons that you can add.

INDECENT, is a teacher, a master, a university professor or a public health surgeon, earning less than that of a third-rate town hall Councillor for Festivals.

INDECENT, is that politicians vote to raise their pay at a rate which appears attractive to them (always unanimously, of course, and at the beginning of the legislature).

INDECENT, is that a citizen has to have worked for 35/40 years to receive a pension and MPs only need seven years, and that members of the Government, to collect the maximum pension, only need to take the oath of office.

INDECENT, is that MPs are the only 'workers' in this country that are exempt from paying a third of their salary in income tax.

INDECENT, is placing in the administration thousands of 'advisors' (read 'buddies with salaries that far more qualified technicians could only dream of earning')

INDECENT, is the huge amount of money earmarked for the support of the political parties and unions, approved by the very same politicians who live on them.

INDECENT, not be required of a politician to overcome a minimum test of ability to occupy his post (neither cultural nor intellectual).

INDECENT, is the cost to the citizens of their meals, official cars, drivers, rides (always classy) and credit cards use.

INDECENT, that the Honourable Members won't freeze their salaries, much less lower them.

INDECENT, that these Gentlefolk have six months of vacation a year.

INDECENT, is that Ministers, Secretaries of State and senior party officials, when they retire, are the only citizens of this country that can legally receive two separate salaries from the Treasury.

And whatever the colour of the Government, all politicians benefit from this modern "droit du seigneur" while not changing the laws governing it.

And who will change all of this? They will? Right!

Various:

In praise of Benidorm (El País in English): -  'Benidorm. “Why would you want to go there when there are so many beautiful places in Spain to explore?” “No one goes to Benidorm  anymore.” “That’s nothing but little Britain.” These were the reactions I received from friends and colleagues when I announced that I was going to spend an entire week in July with a large group of friends from the United States at what has become the most loathed or still-nostalgically loved beach resort on the Alicante coast.

Actually, Benidorm, for all its noted decadence, is much more than just a ghost of its old jet-set image from the 1970s. It is quite well-suited for a weekend escape... especially for lovers of seafood, pub crawls and sand'...

'To play the guitar on the streets of Madrid, it's no longer enough knowing a few chords and finding a suitably crowded place. The City Council announced on Monday that musicians who want to offer their art on the street will have to obtain a permit'... The permit will be issued, suggests El Huff Post, after passing an exam given by someone with some musical knowledge.

This means that we shall never get rid of our irritating local East-European accordion player, who only knows how to play 'O Sole Mio'...

The cost of living comparison between Spain and the UK, here, in an infographic.

Finally:

One of Britain's most outspoken politicians, the occasionally humorous Nigel Farage from the Ukip (UK independent party), appears in the Daily Mail (a small 'c' conservative stay-at-home paper) with the following tripe: 'Nigel Farage was at the centre of a row last night after appearing to suggest ‘violence’ could be justified to overthrow Brussels bureaucrats.

The Ukip leader warned that the EU was heading for ‘revolution’ and said violent protest could be the only way for southern European nations to save their democracies'... Bad enough? You should read the comments from the public: 'The sooner we are out of this mess (the EU) and can govern ourselves again, for good or bad, the better I'll like it. Vote UKIP until our freedom is gained and probably beyond'. (signed, unbelievably enough, by someone who lives in Spain)

 

 

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