5.8 million unemployed
The third quarter of the year marked a record high with 5.8 million unemployed, 25.13%. 130,000 jobs were lost between July and September and 900,000 over the past year. 218,000 contributors to the Social Security System were lost in the last quarter.
The hotel sector is losing the most jobs.
Since June 2007 Spain has 230,881 fewer registered companies.
Unsold dwellings with ‘tourist potential’
The Ministry of Development has found that between 150,000 and 300,000 dwellings, of the unsold total of 680,000 situated along the Mediterranean coast and on the islands, may have a ‘tourist potential’. That means, the dwellings nobody wants, and which real estate agents and politicians have tried in vain to flog for 5 years, may be sold as ‘tourist dwellings’ to foreigners.
However, the Bank of Spain has reported that investment by foreigners in dwellings up to June was a meagre 2,450 million euro, without any increase over the same period last year.
Rich getting richer
The good news of the week – but only for the few – is that the SICAV investment vehicles (an open-ended collective investment scheme) of the very rich, have grown by up to 50% during the crisis. With a tax rate of 1% against 25% for small and medium sized companies, the 5 biggest such investment societies have done very well indeed: The SICAV Morinvest (Alicia Koplowitz as principal investor) has gone from 440 million euro value in June 2010, to 511 million today. The SICAV Allocation of the family Pino (Ferrovial) has gone from 389 million to 398, the sicav in which Rosalia Mera (ex-wife of Inditex) is the principal, has increased by 7% to 341 million.
Important regional elections
In the coming weeks regional elections will be held in Galicia and the Basque Country. In Galicia the PP aim to have their candidate, Nuñez Feijoo re-elected with an absolute majority. The opposition, PSOE and the Galician Nationalists are very weak.
In the Basque Country the governing socialists are up against powerful nationalist parties, the moderate PNV and the heirs of ETA, called EH Bildu.
1 in 3 leaves school
A report from UNESCO found that one out of every three Spanish pupils between 15 and 24 years leaves school without completing their secondary education. Spain leads Europe in the school failure rate. The study calls the situation ‘worrying’.
Taxes kill tourism
Exeltur, the lobby for the Spanish tourist and hotel sector, reducing their prediction in July for a 0.6 fall in tourist activity this year, now anticipates a fall of 1.2%. The lobby explains the reason for the retraction is an expected fall in internal Spanish tourism of 2.9%. out-weighing an increase of 0.8% visitors from abroad.
Tourism is hampered by a number of new taxes, especially increases in VAT, higher airport charges, the new tourist tax in Catalonia, increases in cost of energy and a reduction in the number of Spanish pensioners taking holidays financed by the Ministry of Social Affairs.
21% increase in people leaving country
In the first nine month of this year 420,150 people left Spain to settle in other countries; 365,238 of them foreigners who had been working and residing in Spain, and 54,912 Spaniards. The number of Spanish emigrants has risen 21% on the same period last year.
Red Cross makes Spain appeal
The Red Cross has launched an appeal to help people hit by the crisis. On TV and via other media, people are being asked to donate money, food and clothing, to be distributed to the suffering. The Red Cross is warning of a widening gap of inequality which could lead to social unrest.
The weekly crisis:
The increases in VAT which came into force in September have fuelled inflation; now 3.4%
Rating Agency Standard & Poor’s has reduced the standing of Spanish public debts from BBB+ to BBB- , just one notch above ‘junk debt’
Standard & Poor’s have also downgraded almost all Spanish banks, including Santander, BBVA, Barclays, Banesto, Banco Popular, Bankia, Caixabank and placed others under ‘vigilance’
Spain has managed to place 4,800 million euros worth of public Bonds, at an interest rate slightly lower than at the beginning of the year
Rating Agency Moody’s has decided not to downgrade the rating of Spain, maintaining it at Baa3, one level above ‘speculative,’ as they consider Spain, will for sure, ask for a rescue, and will then have sufficient financing sources
We are waiting for Rajoy!
A Great Depression coming?
By Per Svenssson
The most used technical definition of a recession is, ‘A decline in the economic activity of a country for two or more consecutive quarters.’ Another, broader definition is, ‘A fall in business activity measured by employment, industrial production, real income and sales turnover.’ According to both definitions, Spain has been in recession since at least last year.
A depression is when a recession becomes severe (a fall of more than 10%) and lasts for a longer period, accompanied by significant social suffering and unrest.
Some commentators argue that Spain has been in permanent economical crisis since the property bubble burst in 2008, dragging a number of other industrial sectors with it in the fall, creating the largest mass unemployment in Europe and in the history of Spain, producing a notable fall in real income and sales turnover.
An army of 207 million unemployed
The International Labour Organisation reports the world has lost 30 million jobs over the past 4 years, creating an army of 207 million unemployed. Spain is contributing heavily, the percentage of jobless having exceeded 25% and is still increasing as the Regions are forced to dismiss many public employees in order to comply with the aim of reducing their deficits.
Industrial production decreased 3.2% in August; the 11th consecutive month of retraction in the Spanish industrial sector. The production of cement fell 29.7% (compared with same month, of the already weak one, of last year).
Retail sales dropped 9.8% year-on-year in April. The fall was 6 percentage points above the revised fall of 3.8% in March. The data marks the 22nd month in a row of falling retail sales data and was the largest fall since records began in 2003.
The real income of the Spanish has fallen every year since 2008, with the housing crisis seriously depreciated the wealth of families.
‘Without precedents….’
At the recent yearly assembly of the International Monetary Fund. Jose Viñals, Director of the Monetary and Financial Department of the Fund, previously Vice-Governor of the Bank of Spain, said that the crisis in Spain is without precedent. He reported that between June 2011 and June this year, international investors have withdrawn money equivalent to 27% of the Gross Domestic Product of the country; The escapes continue and accelerate.
Rating agency Standard & Poor’s has again downgraded Spanish public debts, from BBB+ to BBB- that is almost the level of ‘Rubbish’.
Spain’s debts today are 10,000 million euros higher than at the beginning of the year.
Families are broke, the municipalities are broke, the regions are broke, many of the banks are broke and must be rescued, the social security system is closer to the precipice……
The crisis has, with a short interruption, lasted 5 long years.
We are getting closer to a Great Depression.
The Washington Post wrote
MADRID — Spain’s conservative prime minister, Mariano Rajoy, is not known as a gambling man. But as Europe’s debt crisis stretches on, he is playing a tense game of chicken with the financial markets, betting that Spain can balance its books with homegrown austerity while putting off — maybe forever — a humiliating bailout from the European Union.
The stakes are high, for Spain and beyond. After Greece, which is undergoing the financial equivalent of open-heart surgery, Spain has become the focus of doubts about the health of over-indebted European economies. Despite repeated rounds of politically difficult budget cutbacks and tax increases, it is struggling to reduce a deficit that stood at 8.9 percent of gross domestic product for 2011 and to finance at bearable interest rates a debt estimated at $900 billion, 70 percent of its GDP.
Global Economic Crisis: The Largest Economy In The World Is Imploding
Michael Snyder:
A devastating economic depression is rapidly spreading across the largest economy in the world. Unemployment is skyrocketing, money is being pulled out of the banks at an astounding rate, bad debts are everywhere and economic activity is slowing down month after month. So who am I talking about? Not the United States– the economy that I am talking about has a GDP that is more than two trillion dollars larger. It is not China either – the economy that I am talking about is more than twice the size of China. You have probably guessed it by now – the largest economy in the world is the EU economy. Things in Europe continue to get even worse. Greece and Spain (NYSEARCA:EWP) are already experiencing full-blown economic depressions that continue to deepen, and Italy and France are headed down the exact same path that Greece and Spain have gone. Headlines about violent protests and economic despair dominate European newspapers day after day after day. European leaders hold summit meeting after summit meeting, but all of the “solutions” that get announced never seem to fix anything. In fact, the largest economy on the planet continues to implode right in front of our eyes, and the economic shockwave from this implosion is going to be felt to the four corners of the earth.
The Greek government says that without more aid they will completely run out of cash by the end of November.
” Of course the rest of Europe is going to continue to pour money into Greece because they know that if they don’t the financial markets will panic.
But they are also demanding that Greece make even more painful budget cuts. Previous rounds of budget cuts have been extremely damaging to the Greek economy.
The Greek economy contracted by 4.9 percent during 2010 and by 7.1 percent during 2011.
Overall, the Greek economy has contracted by about 20 percent since 2008.
This is what happens when you live way above your means for too long and a day of reckoning comes.
The adjustment can be immensely painful.
Greece continues to implement wave after wave of austerity measures, and these austerity measures have pushed the country into a very deep depression, but Greece still is not even close to a balanced budget.
Greece is still spending more money than it is bringing in, and Greek politicians are warning what even more budget cuts could mean for their society.
For example, what Greek Prime Minister Antonis Samaras had to say the other day was absolutely chilling….
“Greek democracy stands before what is perhaps its greatest challenge,” Samaras told the German business daily Handelsblatt in an interview published hours before the announcement in Berlin that Angela Merkel will fly to Athens next week for the first time since the outbreak of the crisis.
Resorting to highly unusual language for a man who weighs his words carefully, the 61-year-old politician evoked the rise of the neo-Nazi Golden Dawn party to highlight the threat that Greece faces, explaining that society “is threatened by growing unemployment, as happened to Germany at the end of the Weimar Republic”.
“Citizens know that this government is Greece’s last chance,” said Samaras, who has repeatedly appealed for international lenders at the EU and IMF to relax the onerous conditions of the bailout accords propping up the Greek economy.
But don’t look down on Greece. They are just ahead of the curve. Eventually the U.S. and the rest of Europe will go down the exact same path.
Just look at Spain. When Greece first started imploding, Spain insisted that the same thing would never happen to them.
But it did.
By itself, Spain is the 12th largest economy in the world, and right now it is a complete and total mess with no hope of recovery in sight.
The national government is broke, the regional governments are broke, the banking system is insolvent and Spain is in the midst of the worst housing crash that it has ever seen.
On top of everything else, the unemployment rate in Spain is now over 25 percent and the unemployment rate for those under the age of 25 is now well above 50 percent.
An astounding 9.86 percent of all loans that Spanish banks are holding are considered to be bad loans which will probably never be collected. Before it is all said and done, probably ever major Spanish bank will need to be bailed out at least once.
Manufacturing activity in Spain has contracted for 17 months in a row, and the number of corporate bankruptcies in Spain is rising at a stunning rate.
Five different Spanish regions have formally requested bailouts from the national government, and the national government is drowning in an ocean of red ink.
Meanwhile, panic has set in and there has been a run on the banks in Spain. The following is from a recent Bloomberg article….
Banco Santander SA (SAN), Spain’s largest bank, lost 6.3 percent of its domestic deposits in July, according to data published by the nation’s banking association. Savings at Banco Popular Espanol SA, the sixth-biggest, fell 9.5 percent the same month.
Eurobank Ergasias SA, Greece’s second-largest lender, lost 22 percent of its customer deposits in the 12 months ended March 31, according to the latest data available from the firm. Alpha Bank SA (ALPHA), the country’s third-biggest, lost 26 percent of client savings during that period.
Overall, the equivalent of 7 percent of GDP was withdrawn from the Spanish banking system in the month of July alone.
Thousands of Spaniards have become so desperate that they have resorted to digging around in supermarket trash bins for food. In response, locks are being put on supermarket trash bins in some areas.
But Greece and Spain are not alone in seeing their economies implode.
As I wrote about recently, the number of unemployed workers in Italy has risen by more than 37 percent over the past year.
The French economy is starting to implode as well. Just check out this article.
The unemployment rate in France is now above 10 percent, and it has risen for 16 months in a row.
It is just a matter of time before things in Italy and France get as bad as they already are in Greece and Spain.
The chief economist at the IMF is now saying that it will take until at least 2018 for the global economy to recover, but unfortunately I believe that he is being overly optimistic.
As I have said so many times before, the next wave of the global economic crisis is rapidly approaching. Depression is already sweeping much of southern Europe, and it is only a matter of time before it sweeps across northern Europe and North America as well.
Neither Obama or Romney is going to be able to stop what is coming. The global economy is getting weaker with each passing day. The central banks of the world can print money until the cows come home, but that isn’t going to fix our fundamental problems.
The largest economy in the world is imploding right in front of our eyes and nobody seems to know what to do about it.
If you believe that Barack Obama, Mitt Romney or Ben Bernanke can somehow magically shield us from the economic shockwave that is coming then you are being delusional.
Just because what is going on in Europe is a “slow-motion train wreck” does not mean that it will be any less devastatingYes, we can see what is coming and we can understand why it is happening, but that doesn’t mean that we will be able to avoid the consequences.
Debt crisis: Spain's jobless flee to Argentina
Desperate Spaniards are fleeing in their thousands to set up new lives in Argentina, preferring rampant inflation to the prospect of searching for a job in a country with the highest unemployment rate in the industrialised world.
By Szu Ping Chan
Official figures show that more than 65,000 Spaniards have fled to Argentina since the onset of the 2008 financial crisis, with another 25,000 settling in Mexico.
Faced with a jobless rate of close to 25pc, many would rather live in Argentina, with an estimated inflation rate of 24pc and tightening trade barriers, than remain in crisis-hit Spain.
"I prefer inflation to joblessness," Erika, 31, who prefers life in a Buenos Aires surburb without proper sewerage, told the Sunday Times.
Kim Vidal, who saw his wage as a former commercial director in Barcelona slashed from £2,400 a month to £970, also prefers life in Argentina to Spain.
"People welcomed me with love," he told the paper, "the news from the old country is so sad".
Thousands in Spain took to the streets last week to protest against sweeping austerity cuts planned by the government to get its deficit down.
Prime minister Mariano Rajoy said on Friday that the government would "meditate" on whether to ask for a bail-out from Brussels, but repeated that he would do what is in the best interests of Spaniards.
"Cheap financing and the availability of credit is fundamental. Without it it's difficult that there will be jobs, credit and confidence, and we will take the decision we believe is the best for the general interests of Spain," he said.
The number of unemployed Spaniards rose to 4.7 million last month, according to the country's labour ministry, taking Spain's unemployment rate to 24.63pc - the highest in the industrialised world.
The services sector was the hardest hit, with more than 85,000 job losses seen.
Argentina's president Cristina Kirchner has tightened protectionist trade barriers and virtually halted domestic dollar buying in a bid to stem capital flight from the country.
Last month, rating agency Standard & Poor's said that further tightening "could exacerbate the existing weaknesses in Argentina's economy, including high inflation and increasingly rigid government expenditures, and result in a deteriorating medium-term fiscal outlook and investment climate."
Disputed inflation figures also prompted International Monetary Fund (IMF) chief Christine Lagarde to warn Argentina last month that it could face sanctions such as the loss of voting rights and even expulsion from the IMF unless it produced reliable data.
Mrs Lagarde said the the IMF had given Argentina a "yellow card" over the official rate of inflation, which Argentina claims is 10pc.
Argentina has until December 17 to address the problem.
Why European debt targets are fantasy figures
CONSTANTIN GURDGIEV The Globe and Mail
Back in 2010 and 2011, the IMF, the EU Commission, the European Central Bank and pretty much every official European economist were preoccupied with the Greek government debt targets for 2020. Deploying a host of unrealistic assumptions and expectations, they produced a magic value: 120 per cent of GDP.
This debt ceiling, as I pointed out back then, was a bogus one – a made-up number designed solely to avoid placing heat on Italy and Portugal, which were hovering around this same level in 2011, and Ireland,which is forecast to reach it in 2013.
The Greek debt target debate was completely detached from the real debt crisis sweeping the euro area economies – as much back in 2010 and 2011 as it is now.
The target ignores the actual, historically established bounds for debt sustainability, which are put at 83-90 per cent of GDP. Once public debt rises above these levels, it starts stymying growth. By this metric, eight euro area countries are currently under water. And based on the latest IMF projections, these countries will remain in the danger zone through 2017. In fact, the entire euro area itself is now sporting a government debt to GDP ratio of 94 per cent.
The target also ignores the realities of other real economic debts, the sustainability of which is associated with the government debt – gross household and non-financial firms’ liabilities. These liabilities, alongside the public debt, have to be covered out of the activity generated by the economy and thus compete for scarce income resources with government debt. It is for this reason that I call all three liabilities taken together “the real economic debt.”
Historical evidence shows that non-financial corporate debt starts to exert significant drag on growth once it exceeds 73 per cent of GDP. This means that pretty much every euro area country, save Finland and Germany, is now on red alert for corporate debt overhang. For household debt, the danger line is at a debt to GDP ratio of 84 per cent. None of which entered the IMF, the EU Commission or the ECB analysis of debt sustainability targets back in 2010-11. Even now, after this week’s IMF admission that the total real economic debt does matter in determining overall economic sustainability, the EU and the ECB continue to deny its role in the crisis.
Don’t take my word for this. The latest ECB monthly bulletin shows that euro-area household liabilities rose from €5.82-trillion in 2008 to €6.19-trillion in the first quarter of 2012. Euro-zone listed debt outstanding for the non-financial corporates rose from €9.31-trillion in 2008 to €9.88-trillion in the first half of 2012. This growth is lauded as a positive sign for the euro-area economy.
The latest IMF data put real economic debt for the euro area at 303 per cent of 2012 GDP. Based on average interest rates reported by the ECB, this means that the debt pile costs the common currency economies some €1-trillion annually in interest charges alone. Between 2013 and 2017, the IMF is expecting the euro-zone economy to add some €195-billion in new income annually on average. In other words, payments on debts will exceed economic growth in the euro area by a factor of five.
The unreality of the European fiscal sustainability analysis is, therefore, a clear-cut case of the decision makers opting to dress up long-term targets for austerity in order to avoid admitting that the entire euro-area economy has been built on the quicksand of leverage.
NASDAC:
Greek Debt May Hit 150% of GDP in 2020
LUXEMBOURG--Greece's public debt may be even higher than previously feared in 2020, three senior European officials said Monday.
The officials said debt could be as high as 150% of gross domestic product by 2020 under a distressed economic scenario, up from a projection of 146% GDP in March and way above the 120% GDP mark described as "sustainable" according the International Monetary Fund's analysis.
The IMF has revised its projections of the crucial figure upwards following a worse-than-expected recession in Greece and despite a EUR100 billion ($130 billion) restructuring of Greece's privately held debt earlier this year.
Greece's troika of creditors--the European Union, the European Central Bank and the IMF--are currently reviewing the country's performance under its second bailout. Representatives from the three institutions were in Luxembourg Monday to brief euro-zone finance ministers on the state of play in Greece and two euro-zone officials said the troika institutions were at odds over growth projections for the country in the coming years, leading to an internal dispute over what that crucial ratio would be in the future.
The IMF can't, by statute, continue funding a program if a country's debt isn't deemed "sustainable" based on macroeconomic analysis. According to several euro-zone government officials and EU officials, the IMF is pressing for euro-zone countries and the ECB to shoulder more of the burden of helping the country, potentially relieving it of some debts under an "Official Sector Involvement", or OSI, program.
The ECB has already said it can't roll over or take losses on its holdings of Greek government bonds as that would constitute government-debt financing and go against its mandate. Euro-zone finance ministers have also said there can be no fresh funding for Greece, just additional time for it to meet its fiscal targets.
The issue was discussed at length during the euro-zone finance ministers' meeting here in Luxembourg. The discussion, one euro-zone government official said, was "heated."
Greece has been waiting since June to receive its next, EUR31.5 billion tranche of aid, which can't be disbursed before a review of the program and a fresh debt-sustainability analysis are compiled by the troika experts. Greek Prime Minister Antonis Samaras said in an interview that the country would run out of cash in late November without the aid.
Reuter: Spanish aid request from euro zone seen in November
By Jan Strupczewski and Julien Toyer
(Reuters) - Spain could ask for financial aid from the euro zone next month and if it does the request would likely be dealt with alongside a revised loan program for Greece and a bailout for Cyprus in one big package, euro zone officials said.
The Spanish government is considering the conditions of such a rescue package and has said it would take a decision only once it has more clarity on the conditions and the scope of the aid.
Spain replaced Greece, Ireland and Portugal as the main focus in the euro zone debt crisis earlier this year after its crippled banks, highly-indebted regions, a second recession in three years and soaring debt unnerved investors.
Since then, the country's borrowing costs have reached levels deemed unsustainable in the long run, raising the prospect of a second aid program for Madrid following the 100-billion-euro lifeline it obtained for its banks in June.
"We're moving, we're taking steps, we're preparing it, things will crystallize in November," said a senior official who is directly involved in talks about a potential Spanish aid.
The official spoke on the condition of anonymity because of the sensitive nature of the discussions.
Asked to clarify if this meant an aid request was expected in November, he said : "I am confident this will happen then, in November."
A second senior source also pointed to November as the most likely time for a move from Madrid.
"If I had to bet, it would rather be in November than in October, if ever. Then it would be a package - you would have Greece and Cyprus and Spain. I think not Slovenia," one senior euro zone official said.
"The is because the Germans and others do not want to go many times to national parliaments and have painful, tortuous debates there," he said.
Public opinion in Germany, as well as in Finland and the Netherlands has grown increasingly opposed to bailouts of euro zone governments. A sovereign bailout for Madrid would need to get parliamentary approval in Germany and Finland.
ONE MORE SHOT
A third senior euro zone official, who discussed the matter with German lawmakers, said they would not be convinced to vote in favor of a rescue "unless it was a matter of life and death."
He also said German chancellor Angela Merkel and her finance minister Wolfgang Schaeuble believed they had only "one more shot" with their parliament to shore up the euro zone.
Spain has enough money to survive a redemption peak towards the end of October when it would need to pay back 29.5 billion euros ($38.25 billion) worth of debt.
But, eventually, it would need to borrow at more sustainable rates than the current level near 5.8-6 percent at which the benchmark 10-year paper trades.
A Spanish government official said the Treasury was fully funded until the end of the year. "We could even stop issuing debt," the official said.
But January looks challenging with Spain's deficit targets likely missed, additional funding needs created by falling tax revenues and support to indebted regions and a refinancing hump of 19 billion euros that month.
The situation will not get better through the year with Spain's gross debt needs reaching 207 billion euros in 2013 compared to 186 billion euros in 2012.
Pressure is growing on Spain to apply for financial help from the euro zone's permanent bailout fund, the European Stability Mechanism (ESM), because this would allow the European Central Bank to step in with massive Spanish bond purchases on the secondary market, that would lower Madrid's borrowing costs.
Italy's Prime Minister Mario Monti, whose country could be the next candidate for a bailout if Spain unsettles investors, said on Friday that a Spanish request for support would calm financial markets.
TALKS CONTINUE
Privately other senior officials agreed a request from Madrid was probably inevitable.
"It is not helpful that Spain is waiting. We have a framework and they would be better off, safer, if they would use that framework. It is a bit of a loss of time," a third senior euro zone policy-maker said.
While Spanish policies were generally on the right track, it was dangerous to defy market expectations that the ECB would be able to buy Spanish bonds.
"I would expect them to ask. It is not a question of policy-making in Spain. It is a question of market dynamics. Now that the framework has been announced, it has to be used," the official said.
He said Spain was delaying the request because it had engaged into a game of chicken with Germany and other countries.
Behind the scenes, however, talks continue about the form a program would take.
EU Economic and Monetary Affairs Commissioner Olli Rehn told Reuters in an interview on Friday that, were Spain to ask for help, it would most likely use a precautionary credit line, money from which could be used to buy bonds at primary auctions.
ECB Executive Board Member Benoit Coeure, also in an interview with Reuters on Friday, said the ECB could start buying Spanish bonds even if the ESM did not disburse a cent to Spain.
All Madrid had to do was sign a memorandum of understanding with the ESM on the conditions of aid and agree that the IMF would monitor the implementation of the agreed reforms with quarterly reports, Coeure said.
This would be welcome news to euro zone governments which do not want to heap more financial burdens on their taxpayers, who have already guaranteed loans to Greece, Ireland and Portugal as well as a bank bailout for Spain. ($1 = 0.7712 euros)
’Fair compensation’
By Tom Whitehead
Charmaine Emptage was given just over £11,500 in compensation after negligent mortgage and investment advice from a broker saw her lose up to £70,000 and saddled with huge debts.
But a High Court judge yesterday ruled the payout did not represent “fair compensation” and indicated she should get her investment back, returning to the financial position she was in prior to the bad advice.
Mr Justice Haddon-Cave acknowledged his decision would “have implications” for other similar cases.
The issue centred on the Financial Services Compensation Scheme Ltd (FSCS) which awards relief to victims of bad financial advice.
Ms Emptage went to the body after failing to recover her losses from Berkeley Independent Advisers, the employer of her insurance and mortgage broker, Peter Sharratt, after the company went insolvent.
She and her partner had wanted to reduce their mortgage and pay it off early.
On Mr Sharratt’s advice, the couple swapped the modest £40,000 repayment mortgage on their home in Owlsmoor, Berkshire, for an interest only mortgage of more than £111,000 and ploughed over £70,000 into a Spanish property.
They invested in the Hacienda Riquelme golf resort in Murcia which boasted golf courses designed by Jack Nicklaus, the court heard.
When the Spanish property bubble burst in 2009, Ms Emptage, a manufacturing worker, and her lorry-driver partner were saddled with a huge mortgage they had no prospect of paying off and a Spanish property investment worth virtually nothing.
However, the FSCS only awarded her £11,522.98 compensation in January 2010 despite having a principle that victims of bad advice should be returned to the same position they would have been prior to it.
That was because under a separate principle, the body said it would only award relief on the bad mortgage advice and not on the bad investment advice concerning ploughing money into a Spanish property.
Mr Justice Haddon-Cave said Mr Sharratt's advice turned out to be "drastically incorrect" and there was no dispute that it was negligent.
He upheld Ms Emptage’s judicial review challenge, saying that her award "in no way represented fair compensation".
He said the FSCS had failed to abide by the principle that victims of negligent financial advice are entitled to be compensated for the "mischief" caused and, as far as possible, be put back in the same position they would have been in had the breach of the rules not occurred.
He said the FSCS failed to compensate Ms Emptage for the relevant which “left her with a large mortgage which she had no means of repaying ... FSCS misdirected itself and acted irrationally".
A lawyer involved in the case said the FSCS had continued to work on it’s of not paying out on bad investment advice in such cases since 2010 and that other cases were in the pipeline.
The judge said: “This case raises issue regarding the approach taken by the Financial Services Compensation Scheme to assessing claims for compensation.
"This case may have implications for other similar cases.”
It is not known how many cases could be involved.
The financial services ombudsman receives around 8,900 complaints a year of bad investment or pension advice.
The judge ordered the FSCS to pay Ms Emptage's legal costs – which came to £150,000 – but also granted the body permission to appeal after accepting that the case raised important issues of principle with potentially wide implications.
Speaking at her end of terrace home, in Bracknell, Berks., Ms Emptage, 53, said: "We are devastated that we've got to wait until the summer until it goes back to court again.
"We've been fighting this for a long time."
Partner Geoff Ball, 63, said: "We've won the case but it's gone to appeal.
"Obviously we were happy with the original result but they do have the right to appeal and they have done."
A spokesman for the FSCS said: “We note the judgment today.
“We based our decision in this case on a detailed analysis of the legal and factual position.
“The Financial Services Compensation Scheme determines each claim on its own merits according to the available information and by the application of the rules that are set for us.
“We are now considering our position following the judgment and cannot comment further at this stage.
Si (
No(
