Editorial:
Increasing the IVA, or rather, deleting some items from the low-IVA 10% rate, as has been recommended by those people who have the ear of the Government and therefore like to think of themselves as experts, will mean an increase in the annual price of the average shopping basket by 342 euros. Chicken, meat, fish, oil, canned food, sugar, rice and so on would – in this scenario – all lose their 'low tax quotient'. Furthermore, an increase in animal feed – seeds, fertilizers, water – also at a reduced 10%, would similarly increase costs of meat and vegetables, even before they arrived at the supermarket. Tourism of course, another 10% reduced IVA area, to be left firmly alone.
Bad enough; unless of course, the 21% IVA rate itself were to go up as well, perhaps by a suggested 2%, with a tax-hike on everyone, wealthy and poor alike. More at El Mundo.
Housing:
'The Spanish property market is continuing its slow and steady recovery in 2014, with new reports claiming that it is the levels of demand coming from buyers overseas that is giving strength to the sector. Although prices in the nation still fell throughout 2013, the decline was far lower than it had been in years prior, leading many to believe that the market is going to reach its lowest point soon before prices start to pick up and increase in the months and years ahead...'. From Property Showrooms.
'Global property prices shot up 8.4 percent in 2014 but Spain is still down at the foot of the country table with recovery still a long way off, new figures show. Last year's 8.4 percent price hike is the largest annual figure since real estate giant Knight Frank started publishing its Global House Price Index in 1995. It's a number the firm sees as a mirror of an upturn in the global economy. But Spain's struggling property market is still in the doldrums.
Prices fell four percent from the final quarter of 2012 to the same period a year later. That puts Spain way down at 50th place among the 56 countries surveyed by Knight Frank...'. Found at The Local.
The Olive Press continues with its useful articles on home-buying. Here 'Caveat Emptor Part 1': - 'After what may have been a long search for the home of your dreams, you’ve found a place you want to buy. Congratulations! At this stage, if you’re a cash buyer who is fully aware of and satisfied about the property’s legal situation and tax issues, you can simply sign a public title deed (escritura) and complete the purchase. For most buyers, however, there are additional steps before completion that usually require the services of a Spanish lawyer...'. (read on...). A comment following the article is nevertheless worth digesting (for Andalucian readers): 'My advice is do not buy any property until the Junta de Andalucía have been booted out, there has been a full amnesty and some new workable laws have been created. Too many people have been shafted and it is far too risky to buy property in Andalucía while houses are still being demolished and make no mistake about it, they are'.
'Viviendas ilegales': a speech given recently by Maura Hillen, President of the AUAN, and Gerardo Vásquez, an expert on property law, at the University of Seville. Video in Spanish.
If you know Madrid, you will probably know the giant 25 storey Edificio España in the Plaza España. The building has just been sold by the Banco de Santander to a Chinese businessman called Wang Jianlin. More at El Mundo.
Travel:
Blablacar is an Internet service where you find someone who is going to your destination by car and is willing to take you if you agree to share the petrol. A cheap way for young people to travel (young at heart etc. Poor people too). Anyhow, the bus companies are indignant over this form of competition and one, Fenebús, has denounced the car-sharers for 'unfair competition' to the Spanish transport authority, the Ombudsman and even to the Dirección General de Tráfico. Ah, if only we still lived in the Age of the Stagecoach!
Finance:
'It used to be that Spaniards would stop paying all their other bills before defaulting on their mortgage payments. But after seven years of crisis, that is no longer the case.
Between 2012 and 2013, the banks listed on the blue-chip Ibex 35 index – Santander, BBVA, CaixaBank, Bankia, Banco Popular, Sabadell and Bankinter – saw their bad loans for home purchases rise from €17.2 billion to €24.5 billion. This 42-percent rise represents an unprecedented spike since the crisis broke out in 2008...'. From El País in English.
'Spain's rich have been left virtually unaffected by the crisis while the poor have seen their incomes seriously dented, a new OECD study shows. Here The Local outlines the report's key findings. Hot on the heels of an International Monetary Fund report showing that the gap between rich and poor has grown faster in Spain during the crisis than in any other country in Europe, a new Organization for Economic Cooperation and Development (OECD) study sheds more light on the issue... ...The income of Spain's richest ten percent dipped by only one percent a year from 2007 to 2010. But Spain's poorest ten percent saw their income plummet by 14 percent annually in the same period...'. From The Local.
'It's hard running a newspaper. You have to find the news (or pinch it from somewhere else), find a few respectable columnists plus the crossword (with the correct grid), the television guide etc, and above all, as an editor, keep the fluff, advertorials and straight-out lies to a comfortable level; get the whole thing laid-out to fit the bits of the page left after the adverts went in, in multiples (usually) of eight pages - for the printers' machines; get it to the said printers on time, worry about a story that arrived too late, collect all those copies from the printer, groan at some small mistake on Page Nineteen, deliver, distribute and collect old copies. Then pay the bills and roust the sales team to go out and sell more adverts...' And with all of this, revenue is down 10 to 15% over last year for the major newspapers. From The Entertainer Online.
Corruption:
La Información has a recommendation for the Guinness Book of Records: For the highest number of accused and amount stolen – the ERE Scandal from Andalucía. From a 700m war-chest to help struggling companies managed by the Junta de Andalucía, around 136m has been bled off illegally, with 143 people under investigation including 27 senior politicians. So far, 2,500 million euros of bail has been set...
Where do they find these people? - 'The head of the Andalucian Energy Agency has been forced to resign over a scandal in which he stands accused of illegally connecting his own (illegally built) home to water and electricity. Luciano Gónzález García stands accused by the Public Prosecutor of using his industry connections to force the connection of utilities to his illegally built home in Yunquera, Málaga. The town hall had denounced his home for being built without permits...'. From David Jackson.
Tax:
'A report drawn up for the government by a team of experts on how best to reform Spain’s tax system has been made public. The committee of “wise men,” led by Manuel Lagares, a professor of public finance, has recommended progressively reducing direct taxes and social contributions, while at the same time raising indirect taxes, such as VAT.
The committee argues that these reforms would have a positive effect on GDP of up to 0.3 percent a year, as well as producing a 0.2-percent rise in employment in the same period. They also argue it would bring about a slight improvement in the public deficit, but add the caveat that “it is the government that must establish the rhythm and the composition of the reform.”...'. From El País in English
The proposed tax reform, In English from Page 20, can be seen here.
(From a letter received at Business over Tapas) - You might have read in the papers that the Spanish Government is thinking about making a big change to the tax system. Last year they asked a Commission of experts to issue a report with proposal for changes. This was published on Friday. The Government has promised to take into account those measures, so we might see great changes in 2015 taxation.
Although not mentioned on the summary, they are proposing changes that will potentially benefit significantly retired ex-pats coming to Spain:
- Make foreign nationals exempt from the obligation to report on 720 Form their foreign assets.
- They have proposed to enlarge the "Beckham rule" (non ordinarily resident regime) to foreign ex-pats that come to Spain to live, regardless of whether they work, or are pensioners. They mention the Portuguese example.
- Reduce Inheritance Tax to 4% from 10%, and make it consistent through Spain (no Autonomous Regions benefits).
Also, they have proposed that Wealth Tax is eliminated, and Personal Income Tax income bands are reduced and simplified, so that taxation is lowered.
Another letter, this time from a tax expert: - 'Last Friday (March 7) we have attended a talk regarding the informative 720 tax return for 2013. This talk was organized by the tax office for professionals as there are still many questions and doubts about the obligation to declare and which details should be included in case of changes.
It seems hard to believe, but the Tax Office still has to publish information about this (the deadline for the submission is 31/03/2014!).
I contact you because they confirmed to us that we have to declare also THE LOSSES of ownership occurred during 2013. This means that if you sold any assents, or closed bank accounts that were declared in the previous 720 tax return, we have to notify the loss of them.
This is even when the group of elements remains exceeding the €50,000. This was not mentioned in our letter of early this year because the information was not yet available.
It is to be hoped, that the “experts”, if not necessarily Montoro and his AEAT satrap, have taken some note of ex-pat discontent and at last are reacting more or less positively. Maybe there is some concern about the interest the EU Commission and Parliament have taken in this issue – but it’s a long way, and at least one, probably two, Asset Declaration exercises to get through before the proposed changes would come into effect for the 2015 tax year. Does some of this seem like election promises?
Meanwhile there's appears to be a lot of ex-pats who are deliberately shortening their time here to less than six months, turning in their residencias and selling up thanks to the asset declaration demands and what they see as other tax and money grabbing ventures from the tax mafia. That will result in a huge cost – income losses – to those areas of Spain which depend on ex-pat support to survive, especially as the crisis lingers.
How many bars, restaurants, etc. have closed in the past year alone? Better than 10,000. Is the Finance Minister blind to this fact? The losses and probably the political consequences will outweigh the potential tax gains.
El Mundo confirms some of the above in an article titled 'The experts propose a special tax-system for foreigners who live as residents in Spain' – this to 'help sell some of that large number of homes for sale in tourist areas'. No details as yet, but - '...According to the preliminary report of the experts, the Spanish tax regime is "an obstacle" which begins to “weigh negatively” for potential buyers, especially when considering neighbouring countries with a similar climate but with "a more attractive tax system" than the Spanish'. The final comment from the article might make a reader spit into his coffee: '..."The reduction of the seasonality of tourism would benefit employment and consumption because residential tourism has a greater economic potential than mere summer tourism", they concluded'.
Politics:
'The government has been caught out trying to jiggle the underlying stats on the dole figures. They say the changes will only influence the unemployment rates by a couple of decimal points, but independent statisticians reckon it could be over a whole point. The fuss lies with the base population figure. INE, the stats office, currently uses an adjusted 2002 rate. That is, they used the 2002 census to count everyone in the country, then used the residency, births and death figures for each year to estimate how many people are in the country. They then total everyone drawing the dole and calculate the unemployment rate, currently at about 26% of the population. From David Jackson.
The president of the Generalitat, Artur Mas, says that the famous consultation will be held on November 9th. Independence, presumably, will be celebrated in 2015. In a study published by the CIS this week, 60% of Catalonians would now support independence from Spain, possibly in part due to the ham-fisted mismanagement of the potential crisis by the Spanish government. Less than 10% say they are decidedly against the plan. Meanwhile, the lantern-jawed Spanish Foreign Minister (perhaps anticipating his future focus on what remains, for the time being, as a part of Spain) said on Monday that '...there was a 'clear parallel' between an 'illegal' planned independence referendum in the Spanish region of Catalonia and a recent vote in the Crimea on whether the region should join Russia...'. Quote from The Local.
'The Ex-president of the Madrid Community, Esperanza Aguirre, declared herself contrary to "monolithic" political parties during a speech in London in which she praised the electoral system and the patriotism of the United Kingdom.
Aguirre was the guest-speaker at the gala of the British Spanish Society held on Tuesday night in a room at the House of Commons, "a place impressive for both its history and for its fair play", she said during her speech in fluent English...'. Video and article at El Mundo.
The CEOE, the employers association, has come out against the proposed 'Google Tax' which would force 'aggregators' to pay a canon to a reduced number of large newspaper groups known as the AEDE, quoting from their sites or not. The CEOE President, Juan Rosell, says that the plan 'could dissuade new start-up business for the Internet, slowing down new markets and ideas, as well as being a grave attack against people's right to information. The story is at El Confidencial. 'Let battle commence...', says the website.
Meanéame, a site similar to the American Reddit, is under particular threat from the Government's proposal to charge a canon to help the struggling newspapers. Since the 'Google Tax' was mooted, the site has decided not to quote any news-stories from AEDE outlets. They say this has cost the group of leading newspapers a loss of 1.7m visitors directed to them from Menéame in just one month. From El Confidencial.
The European Elections, May 25th:
While we wait for Mariano Rajoy to announce his list of stalwarts for the European Elections in May, here is a cruel piece from El Espía en el Congreso criticising the PSOE candidature: 'Rubalcaba chooses thirteen corrupts, half-baked, millionaires and wowsers to head-up his European party-list. The list is headed by Elena Valenciano – meet them here.
Meanwhile, a possible candidate for the PP is in fact being mooted by a few party members... Ana Pastor could be the one. She is currently the Minister for Public Works.
Perhaps of some interest to foreign home-owners, the number 3 on the list for Ciudadanos-Partido de la Ciudadanía in the European Elections is Carolina Punset (see Wiki), a local councillor in Altea, in charge of Urbanismo, and who is fighting against (in her own words) "el urbanismo depredador". She works closely with the AUN, the association that looks after foreign property owners and their problems. The party itself has absorbed two smaller groups, 'Mayoría Democrática' and the 'Centro Democrático Liberal' and is constitutionalist and centre-left. Currently, opinion polls predict that the party (in short, called C's) will get 1-2 MEPs. If things go well, that might increase to 2-3 and she would have a real chance of being in the European Parliament. Something which could be of great interest to all victims of the abusos urbanísticos.
Various:
A chance to guess the particular electric company that eventually offers the Energy Minister José Manuel Soria a place on the Board once he leaves Public Office. Such is a bet on an Internet site operated by La Plataforma por un Nuevo Modelo Energético.
Facua is the main Consumers' Association in Spain. Here they give readers the chance to choose the worst company in 2014. The contenders are Endesa, Iberdrola, Movistar, Vodafomne and Bankia. They obviously don't finance themselves with advertising.
'I left Spain because the self-employed monthly quota was ridiculous', says a Spanish woman now working out of the English city of Bristol who adds 'In Spain the autonomía costs around 300€ per month, against 14€ in the UK'. To the question 'what would you say to a freelance who is considering leaving Spain?', she answers 'Go!'. Story at Infojobs.
The Telegraph has made a short and bleak 7m film called 'No Job Land' about the unemployed in Madrid. A Spanish site called La Voz del Muro picks it up here.
'Hundreds' of Sub-Saharan immigrants managed to climb the wire fence that surrounds Melilla on Tuesday in search of a better life. Perhaps as many as 500 managed to cross into Spanish territory early morning Tuesday and, once inside, they ambled towards the 'Centro de Internamiento Temporal de Extranjeros', the temporary internment centre for foreigners, singing and showing every evidence of contentment, says El Mundo.
Spain is the World's seventh largest exporter of arms, according to a report in La Información. Norway, Australia and Venezuela being, in order, Spain's major clients. In the first half of last year, Spain sold 1,821,400.000€ in arms. 83% of the sales were aeroplanes.
You might be wondering if your lawyer is registered with the Spanish version of the Law Society. Look him up here at the general census of lawyers (from Abogacia Española)
Traffic fines, like everything bad these days, are going up. Autofácil says that the new top fines - once the latest version of the Ley de Seguridad Vial comes in - are at 6,000€, plus six points... which is what it'll cost if you have a radar inhibitor on board. Cheaper at a mere 1,800€ is when you try and hide the driver's identity after a serious misdemeanour. Like when your car is caught speeding on camera, but you were home with your wife and twenty five children. 1,500€ and your keys confiscated for a month if you drive without insurance... and up to 800€ for owning a parked car without insurance! Then drunk driving (at double the very low rate permitted) will cost you 1000€ and six points, as will driving while stoned. And so on...
That tricky Spanish word which means that your qualifications won't be accepted in Spain, 'La homologación', 'homologation' in the dictionary, a massive aggravation in reality, may be about to fade into history. Those with the correct paperwork, but which don't fit into a Spanish equivalent, have had to face an enormous uphill battle to obtain the right certificates to work here (to say nothing of hostility and obfuscation from the local practitioners). This will now all change, says El País, now that Spain has accepted the Bolognia Plan. Well, one day.
The British Consulate, the Valencian Generalitat and the Alicante Provincial Government all publish useful information for foreigners living in Spain. Check out, for example, 'Health Care in Spain' here: 'The EHIC Campaign is joint project between the UK Department of Health and the Valencia Health Authority, and is partially funded by the European Commission. The campaign will look to inform British nationals in Spain about the correct way to use the European Health Insurance Card (EHIC) and inform those who don´t have entitlement to use the card how to get themselves correctly registered'. The Consulate puts out a Facebook page called 'Brits Living in Spain' with ever-useful information here.
The Alicante site, called 'Ciudadanos Extranjeros Diputación de Alicante', is in English and is found here. It will help you find paperwork and provides other useful stuff. In the past few days, it tells how to check if your Spanish lawyer is kosher, and how to obtain a criminal record certificate ('penales'). Well done the authorities in the Comunidad Valenciana!
'Spain is so many things: sexy and sophisticated, cool and casual, lively and leisurely, and when it comes to food and drink, at once indulgent but also minimalist. The Spanish people savour the right things – high quality ingredients to be enjoyed amongst friends.
Where else in the world are you given free food when you go out to a bar? Where else does convention tell you it's ok to take a nice, long nap after eating a large, leisurely lunch?
In Spain, it's all about the attitude. The country is home to some of the world's best restaurants and the origin of one of the world's biggest trends: small plates. Still, Spain is somehow unassuming...
...Here (follows) 15 reasons the Spanish are winning at life...'. From The Huff Post (US).
The Spanish Economy
By Andrew Brociner
A Review of the Economic Situation: One Year Later, Part II
Last time, we saw how there is not much at the moment to substantiate any claims of a recovery. With severely high unemployment, there is not much spending going on, and this is not something that will significantly change quickly. Consumption is still low in Spain as are imports. This week, we continue the review of the current economic situation.
As we said, consumption remains low and if we now look at retail sales, in the graph below, we can see that since its descent from the end of the boom, it has not really picked up at all and here, monthly data is available until the beginning of this year. This, unfortunately, confirms that there is not much spending occurring in Spain.
If we look at investment, we can see in the graph below, that gross capital formation continues the downward trend it is on since the end of the boom. This means that companies are still reluctant to invest in fixed capital as they are unsure of the economic outlook to payback those assets which are tied up. If a recovery were in sight, companies would more readily invest, being more certain of the payback. In this way, this variable is used as an indicator for future growth, but, as can be seen, there does not seem to be this positive outlook in sight.
As nothing we have looked at is contributing to growth, the only glimmer of hope remains exports and, as can be seen in the graph below, this is on some positive trend.
This still, however, remains too weak and therefore is insufficient to compensate for the lack of other engines of growth. Put differently, external demand is too low to compensate for the lack of internal demand. It remains to be seen whether this one variable can be enough to begin some sort of recovery, but for now, it is not the case.
Finally:
Eye on Spain chooses ten must-see castles here. Beautiful pictures. There are some splendid castles here. Wow!
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