Editorial:
A useful Facebook page is called Brits Living in Spain which here shows that far more of those who live here in Spain, stay all year round. The usual claim that half return 'home' for the summer is not supported by this survey, which shows 88% of those consulted stay all year and another 5% stay for ten months or more out of the year. So 'home' after all, at least physically speaking, is Spain. From personal observation however, the 'culture' remains stalwartly 'British', from TV consumption to political opinion, and Spain is still viewed as a challenging foreign environment. Other nationals would seem to adapt better to the Spanish culture! There's probably something peculiar in the tea we drink!
Housing:
According to the INE, in March 27,047 homes were bought across Spain, a rise of 22.8% compared to the same month in the year 2013. This figure breaks the ten consecutive months of 'inter-annual' falls. (From El Mundo). A little under half, 41.9%, were new builds and the rest were previously occupied homes. The Balearics and Catalonia saw the biggest rises.
'Andalucía’s regional government, or Junta, has prepared draft new regulations for holiday lettings, according to press reports. These regulations will control the way private individuals can rent out their homes to tourists. The draft Decree on Tourist Use Homes ('Decreto de las Viviendas de Uso Turístico') was drawn up by the Junta’s Tourism and Commerce supremo, Rafael Rodríguez, in consultation with the “Mesa del Turismo” tourist industry association, and other local interest groups.
The local tourist industry is said to be pleased with the results, which probably spells bad news for private landlords who dabble with holiday lettings to help pay the bills. Spain’s powerful hotel lobby sees holiday lettings as competition to be limited as far as possible, whereas private landlords have no lobby...'. From Mark Stüklin's Spanish Property Insight.
'Despite reports of foreign buyers snapping up bargain properties in Spain, the country’s real estate market will not recovery fully until banks relax their lending rules, it is claimed.
Currently the maximum loan to value for non-residents in Spain is around 60% but a buyer also needs to pay up 15% of the purchase price in taxes and fees so some considerable upfront outlay is still needed to buy a dream home in Spain. According to Chris Mercer, director estate agents Mercers which has been established in Murcia for 30 years, unless you’re buying a bank repossession where they may lend up to 100% or more, you really need easy access to around half the money to buy a Spanish property...'. From Property Wire.
'Do the Britons living in Almería still trust our politicians?' asks La Voz de Almería ingenuously. This follows from a recent visit by the Nº 2 European Candidate for the PP to a hall full of Britons living in and around Albox, the capital of the 'illegal homes' in the province. 'Boy, they're something else, these British. They've been living here among us for better than a decade, they bought their houses in good faith, with all the right guarantees, but then a swollen group of agents, inspectors, invigilators, bozos and clowns from the Junta de Andalucía descended on them and cocked things up. A house was knocked to the ground in Vera and, Bingo!, a general case of shock, fright and fear among this group of neighbours who had foolishly believed that they had come to live in a community with full legal protection, not like in the days of the handsome pistolero Curro Jiménez, who when you least expect it, appears on your doorstep waving his musket and tells you that you've lost your house, coz it's illegal, see...'.
Tourism:
Is Barcelona suffering from an overdose of tourism asks an opinion piece in El País in English. 'According to a new documentary, Catalonia’s capital has become “a theme park”. So many tourists are visiting the city that life for local residents has deteriorated to an intolerable level and the city is at risk of losing its unique centre as it sells itself to holiday makers...'. This year, an expected eight million tourists will be milling around the sights in Barcelona. Video: 'Bye Bye Barcelona'.
'At first glance, you will hardly notice that there is a steel cable connecting Sanlucar de Guadiana, in Andalucia, Spain, to Alcoutim, in Algarve, Portugal. Over 720 meters in length, the world’s only zip line to cross an international border takes tourist across the Guadiana River at speeds between 70 and 80 kilometers per hour. The departure platform is located at the side of the Sanlúcar de Guadiana castle, almost 100 meters above the river. The landing point is a mere 15 meters high, in Alcoutim, creating an average angle of descent of around 12.47 %, which can be completed in less than a minute...'. From Amusing Planet. It beats walking!
Finance:
The Spanish Government plans to collect data on all of the country's 34 million bank accounts in what it calls a bid to crack down on money laundering and terrorist activity. But the move has drawn plenty of fire. Spain plans to set up a German-style archive of data on the financial activity of Spaniards and residents in Spain, national daily El País reported on Sunday. The move will see banks having to supply details of all the personal and business current accounts, savings accounts and fixed-term accounts they hold to the Secretary of State for the Economy. Groups including the Tax Office, the military, the General Council of the Judiciary and the secret services will then be able to access that information...'. From The Local. The story is repeated at El País in English here. 'Rubén Sánchez, spokesman for the consumer association FACUA-Consumidores en Acción, noted that the project has a loophole: “The big tax evaders, the ones the government should go after, will have an easy time avoiding government control by using non-Spanish banks that do business in tax havens.”...'.
'Signs that the stricken Spanish economy is on the mend increased on Wednesday with official data showing that net debt owed by the banking system to the European Central Bank has plunged by 29.0 percent over 12 months. The figures, from the Spanish central bank, showed the debt fell again in April.
The figures indicate that the euro-zone country's banking system is weaning itself off the massive special refinancing support provided by the ECB at the height of its economic crisis and property market crash which hit the banks...'. Found at The West Australian.
'A System Under Scrutiny'. Lead-in for an article at El País in English: 'Overrun costs or corruption? Why Spain’s public works are in crisis. In six years, the government has paid out €10bn to cover excess spending on construction projects. The amount is equivalent to the cuts it made on health and education when it came to office...'.
'The number of families and businesses that filed for bankruptcy due to not being able to meet their payments and debts totalled 2,090 during the first quarter of the year, which represents a decrease of 29% over the same period of 2013, according to the latest Bankruptcy Proceedings Statistics published by the National Statistics Institute last Thursday. Specifically, 178 families filed for bankruptcy during the quarter, representing a decrease of 24.3% over the same quarter of 2013, while the number of insolvent companies fell by 29.4% year-on-year, to a total of 1,912 bankruptcy procedures...'. From Kyero.
'34% of Spaniards believe that the economy will improve in the next 12 months, 11 points more than shared this opinion in 2013, although only 8% consider the current situation to be “good”, compared with 85% of the Germans, who see things as going well in their country, according to a new pan-European survey by the Pew Research Center published today...'. From ABC.
Corruption:
One to keep an eye on: the police said on Wednesday they had arrested 740 people charged with running fake companies in various parts of Spain. Another 1,241 people are under investigation. These bogus companies may have defrauded Social Security of some 20.5m euros.
Politics:
The Government of Gibraltar has sent to the appropriate department in Brussels over 500 complaints about the long queues outside its frontier forced by the Spanish authorities looking (apparently) for contraband (what... into Gibraltar?). There are anything from 21 days each month or more of major delays (up to four hours!) getting into the territory.
European Elections:
'The latest survey of the CIS made a month ago has been a gross manipulation, according to officials at the selfsame CIS and agreed by several experts consulted by El Espía en el Congreso. The study itself has been impeccable, but the political powers within the CIS have 'manipulated' the results. The adulteration has been such, that when citizens were asked about the Spanish political situation, the answers have been blunt: 90% reject Rajoy and Rubalcaba, 80% reject the regime as a whole which has led to the current political situation and 70% consider PP and PSOE as responsible.
Despite this, the CIS gave journalists a result which claims that the PP would obtain 31.9% of the votes, the PSOE 26.2%; IU 10.9%; 8.9% for the nationalists (CiU-PNV-CC); UPyD 4.5%; ERC 2.5%; Amaiur-BNG 1.9%; Compromis, 1.7% and "other parties" a total of 6.6%. "Manipulation has been scandalous, like we have never seen here before," said technicians of the CIS, which say that they are seeing the "new parties" such as Vox, Podemos, Movimiento RED, Ciudadanos, Partido X and Recortes Cero are "catching on widely among the electorate, but we are not allowed to ask about them"...'. More here.
Several articles on the web these days about how the Partido Popular and the PSOE, the two main parties in Spain, the Right and the Left, are pretty much indistinguishable. Certainly, the PP candidate for the European Elections, Arias Cañete, says that his party is prepared to join una gran coalición between the two parties if necessary.
Well, that's nice, but a number of groups that don't like either of the two main political contenders in Spain, dismissing them as the PPSOE, speak of hidden alliances to carve up the opportunities and the Country. One writer notes that the two groups often vote together in Europe, confusing sensible choice with Spain-comes-first attitudes perhaps. They voted together 5126 times out of 6961 in the last five years. A protest group, the DRY (Democracia Real Ya), is running a campaign against 'bipartidismo' called 'Vote for the PPSOE if you dare!'. (See this video).
Then someone noticed that even the party posters are similar: 'Si Son Lo Mismo'.
Regardless of all this, there's no doubt that the cases of corruption - which have done so much damage to Spain recently - are spread agreeably between the two main parties, with the massive ERE scandal in Andalucía and the Bárcenas inquiry in Madrid merely being the twin tips of a particularly nasty iceberg (a list of political corruption at Wiki here).
One alternative is the group supported by Hartos.org, the 15-M indignados movement and a whole list of small local parties: the Partido X. The party is led by Hervé Falciani, known as an ex-systems engineer from the HSBC in Switzerland who publicly revealed 13,000 Swiss bank accounts including 1500 held by wealthy Spaniards in 2009 (Hacienda has so far recuperated 260m euros). It won't win (of course), but might get enough votes to make a respectable noise, perhaps (besides the rewarding spectacle of annoying both the politicians and the bankers)...
As the ex-Director of El Mundo Pedro J Ramirez said recently on Cuatro TV: 'Vote for who you want, as long as it's not for either of the two main parties that are equally part of the sclerosis and putrefaction of the political system'...
(Condensed from editorial material found at my web-page The Entertainer Online here.)
Economia Digital tells us that an MEP has a monthly wage in 2014 of 8,020€ plus an expenses ceiling of 4,300€. Above this, a limit of an extra 456€ per day for travelling expenses, plus 4,243€ per year for the Brussels/Strasbourg run and up to 19,000€ per year to hire assistants... There will be 54 MEPs sent to Brussels from Spain.
Tax:
'Ex-pats living on the Costa Blanca are being urged to share their personal experiences of ‘cross border taxation’ with the European Commission in a bid to ease any unfair burden.
Campaigners for reform believe it is a rare opportunity to influence policy makers and how a general report might carry more weight.
Brussels has launched three initiatives to glean information about tax obstacles that currently hinder the free movement of citizens with the EU. Private citizens are invited to outline tax issues encountered by moving to a different country and, secondly, issues regarding inheritance tax...'. From The Round Town News.
Various:
Following some unkind and thoughtless 'Tweets' and comments on Facebook by a few members of the public regarding the assassination of a senior politician on Tuesday (a leading PP politician called Isabel Carrasco was shot dead in León by an ill-wisher in a non-political incident), the Government is grasping the opportunity, according to a report in El Huff Post, to 'control the freedom of speech in the last area outside of its political domination'. Say the wrong thing, and you could be accused of 'cyber-crime' or even 'jihadist terrorism'. Oh Dear!
'Earth tremors in Valencia were caused by undersea gas plant, report confirms. Scientists link offshore Castor storage project to seismic activity recorded in Castellón last year. The plant has been shut since quakes, the biggest of which measured 4.2 on the Richter scale'. Self-explanatory headlines and leads from El País in English.
'It is not yet lunchtime, but the British pubs in downtown Torremolinos are already filling up with pale-skinned customers looking to escape the sting of the Andalucían sun. Many tackle the first pint of the day hunched over a tabloid newspaper, silently contemplating the latest celebrity fashion outrage and news of another surge in London house prices...'. Found at an amusing article in the Financial Times about the lack of interest shown by the British ex-pats in local affairs. A quote: 'Many people haven’t really moved to Spain. They have moved part of England to Spain. It’s like England, but with better weather - Ben Harris-Quinney, Conservatives Abroad'.
'A Vincent Van Gogh painting reported missing 40 years ago may have been discovered by tax inspectors in Spain during a national fraud investigation. Cypress, Sky and Country, which disappeared while on display Vienna’s Art History Museum in the early 1970s, was found by tax inspectors in a deposit box in a bank...'. From The Olive Press.
Spain's Friends of the Earth are behind Green Energy in '...community projects that promote renewable energy, such as the Huerta Solar Amigos de la Tierra, a 20-kW solar energy plant in the municipality of Sisante in southeast Spain...'. Found at Truthout.
The Casa Osborne, famous for its brandies and a number of bull silhouette on the hills near the motorways, is starting a chain of bars called 'Toro Tapas' – the first one has just opened in Madrid's Plaza del Oriente. Business over Tapas has a competitor? Not quite!
'More than five centuries after Christopher Columbus’ flagship, the Santa Maria, was wrecked in the Caribbean, archaeological investigators think they may have discovered the vessel’s long-lost remains – lying at the bottom of the sea off the north coast of Haiti. It’s likely to be one of the world’s most important underwater archaeological discoveries...'. From The Independent.
An essay on Gibraltar by a local journalist. '...Then last July, things suddenly went pear-shaped. Almost overnight there were queues of up to seven hours to get in and out of Gibraltar. This time the trigger was an artificial reef. Spain objected to the Gibraltar government’s decision to drop 70 concrete blocks in the sea near the isthmus to preserve marine stocks. The Spanish fishermen, who frequently ventured into Gibraltar waters for their day’s catch, were not best pleased. Spain, often accused of using the border with Gibraltar as a choke-hold, said the lengthy queues were a result of increased customs checks to prevent tobacco smuggling into Spain...'. Found at the New Statesman here.
The Spanish Economy
By Andrew Brociner
The So-Called Recovery
Spain grew at 0,5% in the first quarter of this year, compared to a year ago. In quarterly terms, it grew 0,4%, compared to the last quarter. While this is undoubtedly good news, there are quite a few doubts about the sustainability of a recovery.
As we have seen, there is little in the way of internal demand: consumption is low, as are imports. There is very little to generate this demand: unemployment remains high, there is emigration, credit is scarce, real wages and pensions are declining, and the price of houses continues to decline. The one factor which contributed to this rise in GDP was that net exports were positive. But, if we examine this, we see that both exports and imports declined, and it is only that imports declined by more than exports. This is what led to the growth in GDP, but it is not very reassuring that to get a little GDP growth, you have to rely on a decline in imports.
To have a sustainable recovery, exports need to keep growing. Unfortunately, while exports have increased over a year, they have remained more or less where they were for the last six months. This is not what one expects to drive an export-led recovery.
The other problem that we have discussed is deflation. This seems to be what is occurring in Spain and could account for the rise in GDP. This is simply because to obtain real GDP, one has to take nominal GDP and subtract inflation. But, if we have deflation, which is negative inflation, we end up adding it to nominal GDP. Therefore, the modest growth we have been observing might only be due to deflation, which could be confirmed in time. If we take a look at nominal GDP, we see that it has not changed at all since last year. This would seem to confirm the idea that it is deflation which is responsible for the slight growth we are seeing in real GDP.
It might just be that the 0,4% real growth in the first quarter of this year is nothing more than zero percent nominal growth and the -0,4% GDP deflater. This would be why nominal GDP has not changed in the last year.
An export-led recovery would lead to more consumption, imports and investment. But this is not what we are seeing yet. We would need much more in the way of exports to generate this type of effect and start some sort of a recovery. The positive growth rate may be much trumpeted, but we shall have to wait and see if there is any sustainability to this, or if rather, it is something more ominous, such as deflation working its way into the system.
Finally:
Some nice photos here of 'The ten oldest cities in Spain'.
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