Editorial:
It's a slow process, too slow for those elderly people who are stuck between a rock and a hard place and who only want to enjoy their twilight years, but the politicians are being asked by their sponsors, friends, supporters and perhaps even their bankers to find a reasonable solution to the disgraceful scandal of 'the illegal homes'. Slowly, of course.
Housing:
Several senior PP politicians including the Nº 2 candidate in the European Elections Esteban González Pons met on Monday in Fines (Almería) with a large group of anxious British home owners (including Helen and Len Prior) and a number of associations related to the question of 'casas ilegales', from the local group AUAN together with Save Our Homes Axarquía (SOHA), la Plataforma de Afectados por las Inundaciones del Guadalquivir en Córdoba, Víctimas por el Incendio de Mijas, la Plataforma Vecinal de Estepona, la Federación de Asociaciones de Vecinos Las Lagunas (Huelva), la Federación de Parcelistas de Córdoba y la Unión de Gestión Vecinal de los Puentes (Jaén). Afterwards, González Pons, who is also the vice secretary general of regional and local politics for the PP, had this to say (in perfect English): 'The Priors are a symbol of what should never have happened in our country'. El Almería covers the story here. El País, writing before the meeting, here. The Partido Popular it its press notice for 'an election meeting in Almería', ends with '...During the ceremony, which was attended by various associations of British residents in the region, González Pons said he regretted the irregular situation of those home-owners whose houses the Junta is threatening with demolition and he showed the firm support of the Partido Popular with their situation. Thus, he said, the PP will continue to work to find the most appropriate procedures for legalizing these homes, while complying with the law and the protection of the environment, "and making sure that this can never happen again in the future"'. The Almería PSOE politician Juan Carlos Pérez Navas (also in election mode) said of the meeting '..."while the PP promises and fails to comply, we Socialists are articulating measures to solve the problems of the inhabitants of the Almanzora and the Almerian Levante, which includes owners of 'irregular' homes." In that regard, he recalled the recent meeting of the PSOE in Almería with the AUAN where they were reassured that "the Socialists are not going to look the other way and will put solutions on the table".
Who is a person to trust?
While we sometimes imagine another opportunity for a fresh 'building bubble', the fact is, there are enough empty homes in Spain to cover demand for a generation. Between 3.5 and 5 million empty dwellings are quietly rotting in the sun, and the prices for homes still hasn’t reached the bottom, thanks to the actions of the banks and cajas to keep their assumed values on their books. El País says there is enough urban land available to keep up with demand for thirty years. Of course, this is a viewpoint for the Spanish middle and working classes rather than the wealthy and/or the foreigners. Andrew Brociner on house prices below in The Spanish Economy
'Companies accounted for 21.93% of all home purchase transactions made in 2013, which represents an increase of 429% over the 5.11% of transactions carried out in 2007, before the crisis. In contrast, home purchases made by private individuals dropped from 94.89% of all transactions in 2007, to 78.07% in 2013. The change in the profile of the purchaser is one of the variables analysed in the annual real estate statistics report for 2013 published by the Association of Registrars, which shows that the regions with the greatest number of home purchases by companies are the Canary Islands, La Rioja and Catalonia, while the regions registering highest numbers of purchases by private individuals are Extremadura, Cantabria and the Basque Country...'. From Kyero.
Colin Davies comments in his blog: '"Is Dubai the next Spain", asks the Daily Telegraph. "Britons" it says "are abandoning their place in the Spanish sun for countries with better work opportunities and more stable house prices – and the Middle East is one of several areas attracting growing numbers of emigrants". Dubai is said to rank no. 3 in the list of places offering a better quality of life, while Spain has sunk to a lowly no. 9. Click here for reasons why. Perhaps I should sell up now. Even if the Dubai government did pay for the article'. Heh!
Who are we and why are we here? From a blog called A Foot in Two Campos: '...But let's be honest - we came because of the sun. We came so that we could put endless photos on Facebook of the swimming pool, the mountain views, the sandy feet resting on the rails of a chiringuito, the dining table on the terrace with the artfully-placed wine glasses. We came so that the cries of "Oh you're so lucky!" from a damp and rainy Britain would bounce from our iPads and reassure us we have made the right life choice...'.
The couple who were sent to prison for not demolishing their home in Castilblanco de los Arroyos, Sevilla, have been released after a month 'inside'. José Leon, 64, and his wife Carmen, 59, 'are the first people I've heard of who have gone to prison for owning an illegal home', says the head of the department for planning at the Ecologístas en Acción, Juan Clavero, who reckons – according to El País – that there are 300,000 illegal homes in the region. The particular urbanisation of Las Minas caused the arrest and 'inhabilitation' of the town mayor of 27 years, for 'not taking appropriate measures against the urbanisation which, according to the judge, 'caused grave environmental concerns'. A place where another resident and refugee from the city says 'you can see the stars at night'. José and Carmen, originally given a year's prison plus a fine of 7,300€ each, like other neighbours in the urbanisation, must now, once again, await events.
'The ex-mayor of Zurgena (Almería), fired from his post for multiple building irregularities, has had a judgement against him quashed by the senior provincial court, thus in turn freeing twelve British-owned houses from the threat of demolition. Several councillors, who voted in favour of the building permits for 'Los Carasoles' back in 2005, have also been absolved...'. From The Entertainer Online.
The promoter Comercializadora Mediterránea de Viviendas (Comervi), owned by Jesús Ger, who also is the owner of Marina D'Or in Oropesa, where Comervi built its apartment complexes, has gone into suspension of payments. The company 'has nothing to do with the tourist complex, its hotels or spas', according to the story in Valencia Plaza.
The problems of home owners on the Portugal coast (touched on in BoT 65) have now reached the Daily Mail 'Hundreds of British ex-pats in Portugal may lose their homes due to 19th-century 'land grab' law where government can seize land if built on state property', and here in the Portugal News Online 'An historic law that was reactivated in 2005 and which requires all waterfront home owners to prove that their property has been privately owned for at least 150 years could be significantly loosened after a bill that aims to soften the demands was approved by Parliament last week...'.
Tourism:
'Geographical location, globalization and climate change are raising the risk of malaria in Spain. Although for the moment there is no indigenous cases of malaria, experts remain vigilant to the risk of the introduction of the disease...'. Says El Ideal. A threat which could of course (suddenly) damage tourism.
'As part of a newly introduced Good Citizen Plan, Palma City Council has declared that it will no longer put up with bad tourist behaviour. From June, anyone contravening a range of new civic laws will be fined heavily and face the wrath of the local police...'. From The Telegraph Ex-pat blog. Quite right too – in our pueblo, the supermarket sometimes gives out free white tee shirts to those insensitive enough to go shopping without wearing a shirt.
Finance:
'The CEOs of the major Spanish multinationals gave their approval to the economic policy of Mariano Rajoy in a meeting Wednesday with the President of the Government in La Moncloa. According to the captains of industry, the climate of the meeting with the President of the Government was "positive". All the main executives of the twenty leading Spanish companies attended the meeting with the exception of the President of the Grupo Planeta, José Manuel Lara, and the President of Mercadona, Juan Roig, who were absent due to agenda problems....'. From El Mundo. A few hours before the meeting, Emilio Botín, the President of the Banco Santander, told reporters that the Government's finance and labour policies 'were working'. Spain's GDP is expected to grow by 1.3% this year and 2% in 2015, according to the financiers, slightly higher than Brussels' estimations of 1.2 and 1.8 per cent respectively.
Corruption:
As part of the run-up to the elections, Monday's press was discovering new and important cases of corruption, from the saqueo of the town hall of El Ejido by the then mayor Juan Enciso back in the previous decade (57 million euros); inflated contracts for political meetings in Castilla – La Mancha rubber-stamped by the then president of that autonomous region; a massive hole discovered by auditors in the town hall accounts of Zaragoza for 362 million euros ('larger even that the hole in Marbella', says the report); an investigation into apparent six million euro fraud among the civil servants on the AVE over in Barcelona and Madrid (nine had been arrested by mid-morning, three continue in custody).. and the story of 'The Spanish dealer, the Chinese forger and the $80 million art scam' over at El País in English (alright, it's not of political value, but it's amusing enough).
Then on the other hand, comes an important essay from Esther Palomera in El Huff Post called 'Enough of Keeping Quiet!' which considers the Media's complicity with the government – presumably for that welcome 'institutional advertising' that covers so many bills – and she suggests that one day the Fourth Estate will come to regret what we are now losing. She quotes Marty Baron, the director of The Washington Post, who recently said 'if we don't rise up against the Establishment, we sacrifice our future'... She's probably right. However, the most space in Monday's newspapers goes to different reports regarding 'the racist and Euro-sceptic UKIP party in the UK which now appears as a favourite for the European elections' (Público).
The higher court in Seville has confirmed the powers of judge Mercedes Alaya in her investigation into the ex-Minister Magdalena Álvarez as part of the ERE Inquiry. This follows on from the Anti-corruption Prosecutor recently supporting the ex-Minister's call asking to drop the bail of 29.5 million euros. Calls are now being made for Sra Álvarez to step down as one of the eight vice-Presidents of the European Investment Bank.
White Elephants:
'The hotel in Carboneras has survived for ten years and through four ministers', says the headline in El Ideal, in reference to the Algarrobico. So, for a decade, we have had neither the return of 300m of hitherto pristine yet utterly ignored coastline, nor a working hotel with merry tourists, happy shop-keepers and restauranteurs and a healthy number of jobs – just a mouldering ruin... Will somebody please make up their mind!
'The State had thrown out more than 3.5 billion euros worth of unworkable or unfinished infrastructure', says Vozpópuli, adding 'Closed tunnels, roads that lead nowhere, trams that do not circulate, airports without flights, half-built buildings... In recent years, Spain has been riddled with such projects that cannot be used and have cost the equivalent of 0.4% of GDP...'. The photograph that leads the article shows the bricked up twin tunnels under a very bald bit of Almería's natural parkland – built in 2011 for the AVE – which cost somebody 700 million euros.
Or perhaps, even more waste: '...Fed by European funding, the country has built deserted airports and high-speed rail networks used by very few passengers. Between 2004 and 2013, Spain received €20.56 billion in European money for transportation infrastructure. Of this, €7.45 billion went to the high-speed AVE train...'. From an article at El País in English.
Politics:
Figures out this week of a welcome fall in unemployment of 111,500 for April and an increase in Social Security affiliation of 133,800 people encouraged Mariano Rajoy in a radio interview on Tuesday. Ideal takes up the story: '...Rajoy, who has defended tooth and nail the labour reforms adopted by his Government, has called on the whole of Spanish society to give him "a fair trial," because, he said, "Spain is doing much better"...'.
'El Corte Ingles, Mercadona, Carrefour and so on have 'achieved' that Minister Gallardón includes penalties of up to 18 months in prison for shoplifting from supermarkets. Stealing in a supermarket will be considered a crime in the new criminal code being prepared by the Government. We will see sentences of more than one year in prison for thefts from large commerces. Alberto Ruiz-Gallardón has accepted the proposal of the largest distribution companies in the country to curb the increase of shop-lifting in their centres...'. From El Confidencial Digital, which notes that there were 130,000 denuncias last year for shop-lifting.
European Elections:
El Mundo on Sunday quotes Sigma Dos to say that the Partido Popular has increased its support and voting intention slightly over the PSOE to 34.3% against 29.7% for Elena Valenciano's candidature. Between them, they are down around 17 points over the last European elections in 2009. Corruption, according to El Mundo, citing the Andalucian ERE and the Madrid Bárcenas party finance, are doing damage to both parties, who evidently refuse to grasp the nettle, leaving opportunity for the IU (Izquierda Plural) and the UPyD and the smaller protest groups, now perhaps led by the Partido X.
The candidate for the PSOE in the European Elections, Elena Valenciano, has called for people 'to get out and vote, it's not enough just to get indignant'. The PSOE, she told supporters in Alfas del Pi, Alicante, on Sunday, is in harmony with much of the message from los indignantes. And without the votes from the PSOE rump-supporters, she warned, the Right will win. More here.
Miguel Arias Cañete, the top name on the PP list (to be more precise than 'PP candidate for the European Elections') said on Monday in a meeting in Tenerife 'not to waste a moment trying to persuade a PSOE supporter to see sense because, if, after all the damage his party has done, he can still find reason to support them, then there is obviously nothing to be done for him or her'. Heh!
Hervé Falciani, the candidate for the Partido X, is known in Wikipedia as a Franco-Italian system engineer who since 2009 has been collaborating with numerous European nations by providing information relating to more than 130,000 suspected tax evaders with Swiss bank accounts. He says in a recent interview on La Sexta (TV) that 'the Spanish Government has no interest in stopping corruption' and that 'each year, 40 billion euros leave Spain for fiscal paradises'. Video here.
Various:
The RTVE, the national television and radio (TVE and RNE), is in crisis with debts of over 800 million euros. The corporation was bound for trouble after the Government removed advertising from the channels back in January 2010, in what must have been an attempt to improve the 'watchability' of the state TV. Finance now comes from the State, plus contributions from the telephone companies together with private and pay channels. There are currently six TV and five radio channels, plus international TV and radio. Meanwhile Tuesday, nine TDT channels were closed by court order. Fifteen remain.
While France has just signed a total ban on GM corn (Monday), following popular opposition, Spain is the only European country with significant amounts of GM corn growing in the fields...
'There's a human rights crisis on (and just off) the shores of Europe. Thousands of migrants from the Middle East, Africa, and Central Asia are boating across the Mediterranean in an attempt to enter the European Union — and hundreds of them are dying. Last fall, a ship caught on fire and killed 300 migrants a mile from European shores. About 20,000 migrants have died en route over the past twenty years, according to the International Organization for Migration...'. From Vox.
'A mixing console, a computer, an antenna and a small transmitter worth a total of €1,500 is all that you need to take control of a radio frequency...'. So begins an article in El País in English about illegal radio stations called 'Four Hundred Pirates on the Airwaves'. Meanwhile, there's a frequency problem for Spectrum over at The Olive Press.
'Spain's new telecommunications law will allow phone companies to expropriate private property to install mobile phone antennae and other infrastructure, a move which worries opposition groups. Under the new law passed on April 29th, phone companies will be able to "forcibly" expropriate roof terraces and other private and public property to install telecommunications infrastructure...'. From The Local.
According to an article in Low-Tech Magazine (which rather wears its opinion on its sleeve), the high-speed trains, billed as an effective alternative to air travel, are in reality a threat to ordinary railway users. A useful study of Spanish and European rail travel follows.
'The Ministry of State Security has told a group of more than thirty judges and prosecutors who are participating in the annual Human Rights Forum for Immigration held in Gran Canaria from Wednesday that they may not visit the Barranco Seco internment centre for foreigners...'. Found at El Diario. There are currently 32 people held at the prison.
Thirty seven Spanish towns and cities are over the recommended levels of air contamination, according to the World Health Organisation. The worst is La Línea de la Concepción (Cádiz) followed by Toledo and Málaga. The full list here.
That Mothers Day video from Desigual that upset so many people: here.
The Spanish Economy
By Andrew Brociner
Still More on Deflation
We have been looking recently at the prospect of deflation in the euro-zone, with its damaging consequences, and have made a comparison with Japan, since many of the variables, economic and demographic, are in place. But while the spectre of deflation is present, it is not yet the case that prices are continuously falling into the deflation spiral we described.
So, what is the evidence that this could become the case? First of all, as we said, in Spain, real wages are declining, and this is similar to what has been happening in Japan. Secondly, prices in the euro-zone are below the ECB's 2% objective, which is causing some concern. But let's look now at what in Spain is so representative of the situation there – house prices. After all, it is the boom and bust in the housing market that is responsible for much of Spain's current situation.
As we can see from the index, house prices in Spain have fallen continuously from the end of 2007 and there is no suggestion as yet that they have stopped. We use Spanish real estate prices as a proxy for general prices, to determine the extent to which prices have been falling in Spain. This is to demonstrate the idea that, at least in the housing market, people have been putting off purchases until the market stabilises, as the theory of deflation would suggest. The general price index in Spain is shown in the graph below:
In the EU, house prices are not included in the general price index, but if they were, then clearly, Spain might already be in a situation of deflation. This would then impinge on expectations and set in motion a spiral of deflation.
That people have been delaying purchases can be seen from the next chart which shows the purchases of new homes, of which there is still a very big stock in Spain, both finished and unfinished:
Here we can see a steady decline of purchases of new homes since 2007. It seems clear that, at least in the housing market, with continuously falling prices, people have been putting off purchases of homes. But there is also a link between house prices and general consumption: when prices were going up, there was a wealth effect, which made people consume more in general, but now, with falling house prices, the opposite is occurring.
This, incidentally, is also what took place in Japan since the mid 1980s. The point is that if this fall in prices becomes a general one, as it did in Japan, then deflation will be inherent in the system and we can expect the dire consequences to the economy in Spain as we have been witnessing in Japan, without a remedy yet.
Finally:
Learn Spanish with Duolingo. They say they're good. Otherwise, watch Spanish TV or put the video into Spanish; read Spanish comic books, stories, books and newspapers. Become an expert or a hobbyist in something that the Spanish will gladly discuss with you – local history is a good place to start. Listen and imitate (OK, you already knew that).
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