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Business Over Tapas (8th  August 2014)

By Lenox Napier and Andrew Brociner

miércoles 22 de octubre de 2014, 11:21h

A digest of this week's Spanish financial, political and social news aimed primarily at Foreign Property Owners:  with Lenox Napier and Andrew Brociner For subscriptions and other information about this site, go to businessovertapas.com - email:  [email protected]  

***Now with Facebook Page (Like!)*** Note: Underlined words or phrases are links to the Internet. Right click and press 'Control' on your keyboard to access.

Editorial:

I was in the high hills of Almería, near Paternina del Río in the Almerian Alpujarras, liberally stained with the juice from a mulberry tree. A goat herder came past, with 284 goats. All 'chipped'. 'That's amazing', I said, 'does the Junta de Andalucía know how many goats there are in Andalucía at any given moment'? 'Yes, sir, down to the last goat', he answered, dubiously reaching for a long-departed forelock.
Fantastic stuff!
So, answer me this: how did they not know about the 300,000 so-called 'illegal houses' that were being built across the Region to be sold to foreigners?

Housing:

'House prices in Spain will climb 2 percent in 2016 after hitting rock bottom in 2015, the ratings agency Standard & Poors predicts in a new report released on Tuesday. Properties in Spain have fallen around 30 percent since the country's economic crisis hit in 2008, but ratings agency S&P believe the recovery is coming.

The credit ratings agency has stuck with its earlier forecasts that Spanish house prices will slip 2 percent in 2014, against a fall of 4.6 percent in 2013. They will then hit rock bottom in 2015 before stabilizing...'. From The Local.

'The Bank of Spain says it noticed a “significant moderation in the real estate sector’s adjustment” in the second quarter of 2014, according to its latest bulletin on the Spanish economy. Residential property investment is contracting at a significantly slower rate than before, with the housing market shrinking just 0.8 per cent on a quarterly basis in the second quarter, according to the bank’s July-August report. The bank points to recent signs of stability in the number of monthly home sales and acknowledges the positive role that foreign buyers are having on the market...'. From Mark Stüklin's Spanish Property Insight.

From Kyero comes the news that 'Foreigners invested an average of 381,860 euros on home purchases on the Spanish coast in 2013, according to a study prepared by the property portal, Fotocasa, and the five nationalities who spent most last year were the Russians, Germans, Belgians, British and French...'.

'The price of second-hand homes in Spain slipped 7.5 percent in the year to July, a slight improvement on the 10 percent fall clocked up in the previous 12 months, a study released on Wednesday shows. The report from online property portal Fotocasa shows the average price of Spain's second-hand, or non-new homes was €1,641 ($2,193) per square metre in July 2014...'. From The Local.

A comment on the apparent 'legalisation' of the Hotel Algarrobico' (found on Facebook): 'The President of Andalucía, Susana Díaz, says that it should never have been built. Well quite. But Sra. Díaz may wish to note that the same thing appears to have happened with some 300,000 other buildings in Andalucía and may wish to acknowledge that this is what happens when the planning systems are out of control and no action is taken until it is way too late. She may also wish to consider that to make matters worse the system responds by disappearing up its own backside in administrative and criminal trials which solve nothing, help nobody and cost a king's ransom whilst clogging up the courts and damaging the economy and reputation of this region as a nice place to live and do business. Sigh'. Quite!

Breaking news... The Junta has declared the Algarrobico site to be 'public property' and now intends to demolish the wretched hotel after all!

Finance:

'The Spanish economy is recovering "better than expected" and is now among Europe's best performers although it still faces "numerous" problems, Prime Minister Mariano Rajoy said Friday. "Things are going better than we expected. We are registering healthy and diversified growth which is here to stay," he said during an annual end of term press conference. "In less than two years we have gone from being an economy on the brink of a bailout to being one of the economies that grows the most in Europe," he added...'.  Some cheerful news found at The Global Post. (Another version at The Local begins: 'Spain's prime minister Mariano Rajoy has used a pre-summer press conference to trumpet the improvements in the country's economy, in a speech described by the opposition as "triumphalist" and "self-complacent"...').

'British ex-pats living on the Costa Blanca suffer frustration and discrimination at the hands of the Spanish tax authorities, the European Commission has been told.
National and local tax penalties, punitive inheritance tax laws, and the more recent overseas wealth declarations – which have triggered ever more cross-border problems with the authorities – are all seen as a problem for EU nationals moving within the single market.
The ongoing problem prompted the Commission to launch an initiative inviting people to inform them of tax issues arising when they actively moved between member states...'. Found at The Round Town News.

Foreign investors brought 1,600 million euros to Spain in May, says Europa Press, after taking 3,900 million out of the country in April. In the first five months of 2014, the foreign investors (vultures?) took out 12,700 million (compared to the same period in 2013, when they invested 43,600 million euros).

'Portugal will spend 4.9 billion euros ($6.58 billion) to rescue its largest listed bank, testing the euro zone's resilience to another banking crisis just months after Lisbon exited an international bailout. The rescue of Banco Espirito Santo, which was unveiled after a frenzied weekend of discussions between Portuguese and European Union officials, comes after weeks of increasingly bad news about the financial state of the lender, particularly its exposure to a cascade of companies headed by its founding Espirito Santo family...'. From Reuters. A Spanish site, Bolsamanía, has the headline: 'Portugal rescata al banco BES con 4.900 millones de euros y los accionistas lo perderán todo'.

Unemployment benefits are way down on last year's figures – not so much because of a hesitent rise in employment so much as the unwillingness to pay those without work. New figures show that long-term unempoloyed are losing their benefits at a rate of four times higher than the number of new jobs created, indeed those receiving a 'dole' have fallen to 2009 figures. Of the 4.4 million on the unemployment list (numbers from the Servicio Público de Empleo en España), something under 2,5 million receive support. More here. 'En España no estamos creando empleo lo estamos desguazando' – we are not creating more jobs, just worser jobs: with graphs. Over at Gurusblog.

While political parties in Spain receive healthy funding from a grateful exchequer – 273 million euros in 2012 – they also owe rather a lot. Indeed, nine political formations are technically bankrupt, but they continue, with their debts sometimes forgiven by banks or other agencies (in return... for what?). The most indebted parties are the Izquierda Unida that owes 13.1 million euros, the UDC with 12.4m, CIU with 9.2m and (for some reason) the as yet unpaid bill over at Bloc Nacionalista Valenciá for, uh, 729.07€. El País lists all the major parties, with their possessions here.

Corruption:

An investigation by the University of Murcia attributes Spain's notorious 'urban corruption' to a 'failed institutional design'. The report in El Diario begins:  'Urban corruption in Spain is not new, but during the first decade of this century, a series of factors joined together to trigger a substantial increase in its occurrence, such as the real estate bubble, municipal competencies in urban matters, complex legislation, intricate planning agreements, the ability of the mayor to make decisions without full municipal support and, of course, the large quantity of money which figured in those activities...'.

White Elephants:

The Málaga underground railway is now open and running (hurray) with 12 kilometres of track and seventeen stations; but it is five years late, doesn't reach the city centre and is way over budget at 600 million euros, a cost which will rise to an anticipated 2,000 million euros  by 2042. Each 1.35€ ticket will have a government subvention of a further 2.85€ to cover the cost.  El Confidencial tells the story here.

Politics:

'The leader of Catalonia, the region that accounts for one-fifth of Spain’s economy, told Prime Minister Mariano Rajoy during a meeting on Wednesday last week that he would go ahead with a vote on independence in November that the central government in Madrid has vowed to block. The meeting, in Madrid, was the first between Mr. Rajoy and Artur Mas, the head of the Catalan regional government, since Catalonia’s governing coalition agreed in December on the timing and format of an independence vote. For that reason alone, the meeting was considered something of a breakthrough. But afterward, Mr. Mas told reporters that his secessionist plans remained on track and that there was “no proposal on the part of the state to resolve this political conflict.”...'. From The New York Times.

'Jordi Pujol may be considered the father of modern Catalan nationalism by many people, but the recent revelations that he kept millions of euros in overseas tax havens for more than three decades, now mean that he has become a liability for the movement driving for a referendum on sovereignty for the region in November, led by regional premier Artur Mas...'. Understandably, you won't find any pro-independence articles in the Spanish mainstream press. This from El País in English.

'The confession from Pujol puts the lie to the 'Spain is ripping us off' line from the Catalonians', said the Secretary-General of the PP, María Dolores de Cospedal on Sunday. More at El País. The family fortune of the Pujols is estimated at 1,800 million euros, according to La Información. Here's an essay on corruption: 'The Pujols... a family of black sheep... in a nation of black sheep', found at El Diario.

What could happen in Catalonia, asks El Diario in an article called 'Cataluña. ¿Hungría, 1956?'. The worst, if the Catalonians go ahead with their plans for the referendum on independence, a poll which Madrid says can never happen, might be a military occupation. Unlikely perhaps, but plans from the army are in place with something called 'Operación Estela'. More likely could be a quiet police operation, arresting all the appropriate politicians and accusing them of sedition. Hungary 1956 anybody?

The Government expects next year's local elections to be decided by the new system of 'party most voted' to help ensure that Spain remains, by and large, a two-party state. The right-wing ABC doesn't necessarily see this as a bad thing.

Quotes from Rajoy: 'Youth unemployment at 43% is an unacceptable figure' (2010). 'Since I arrived in Government, I've been waiting to make an announcement like this' (2014: Youth unemployment now at 53%) Found at Twitter. Since we are at the Twitter page, here's another gem: '(To Mariano Rajoy, October 2011, from a journalist): 'What do you think of the current electoral law? If you win the November elections, will you make any changes?. Rajoy answers in another Tweet with: 'la Ley Electoral fue respaldada por una amplia mayoría y no vemos necesario ni urgente modificarla. Gracias' (The electoral law was passed in Parliament by a large majority and I see no necessary nor urgent reason to change it'. (This, of course, before Podemos)...

From an article in the El País in English on the rise of Podemos, the group that is shaking up the political scene this summer:  '...Citizens are not only losing confidence in the two-party system, but are also doing so while concerns about unemployment and corruption are on the rise – those are the two top worries of citizens ... What’s more, while the third concern is related to economic issues, the fourth – as cited by 26.4% of respondents – is related to the need for an improvement to “politicians in general, parties and politics.”
(A survey) revealed that 67% of respondents think that the job being done by the current PP government is either “bad or very bad,” while 70% use those same terms to describe the policies of the PSOE in opposition … The rise of Podemos, then, is happening within the context of a crisis in confidence in the main political institutions in Spain...'.

News for the PSOE isn't good, with the suggestion from surveys that Podemos is hot on its tail, running now as the third most popular party in Spain! Heavyweight PSOE leader Susana Díaz suggests that the radical group sets its sights on the PP rather than the PSOE. We should be working together, she says plaintively... Story at Libertad Digital. Indeed, the Espía en el Congreso considers that the PSOE sees the main problem is no longer corruption, but the rise in inequality in Spain... and the rise in the support for Podemos. The same source also relates that the Izquierda Unida, now no longer Spain's third favourite formation, is equally upset by the advance of Pablo Iglesias' party.

'With ten months to go before the council elections, Town Halls are spending money on improvements to local streets and are speeding up major projects'. Sub-heading from an interesting article at Sur in English. Yes, yes, we should have elections every year!

Various:

'Spanish legislators are threatening the open Internet once again. Reforms to the country's Intellectual Property Law would have a particularly grave impact on websites that feature content produced by regular Internet users — like blogs, photo and video sites, social media platforms. Recently approved by the Chamber of Deputies and pending confirmation before the Spanish Senate, the law could inflict long-lasting harm on the digital commons. Although activists and lawyers are forming coalitions to block the law from passing, there is much cause for concern...'. From Global Voices. Another version: 'The Story of Spain's Google Tax' in not very good English here.  The Coalición Pro Internet has page-cuttings and other useful information: its web-page is here. It's a funny thing, but one can't help but make the point that professional journalists, even the ones who work for the AEDE daily newspapers association, use Google and other free reference sources in their daily work as a matter of course (and why not?)...!

From Arturo Pérez-Reverte, a popular novelist, war correspondent and journalist: 'Spanish newspapers are sinking due to both the crisis and to the new technologies, but above all, for their blatant complicity and silence in front of the establishment. "I think that only a press which is capable of being, where necessary, brutal, ruthless, determined and full of righteousness, could survive today", says Pérez-Reverte in an interview with Periodista Digital. Certainly, the OJD circulation figures show that the main papers are in retreat, with El Mundo (bereft of Pedro J Ramírez) showing a fall of 16.9% in July copy-sales. El País is down by 6%. An article at Capital Madrid says that the foolish politically-supported plan to save the dailies through the Google Tax can only backfire.

President Obama on the issue of 'net neutrality' in the USA had this to say on Wednesday - '...'"There’s another problem, though — there are other countries —  that feel comfortable with the idea of controlling and censoring Internet content in their home countries, and setting up rules and laws about what can or cannot be on the Internet. And I think that that not only is going to inhibit entrepreneurs who are creating value on the Internet; I think it’s also going to inhibit the growth of the country generally, because closed societies that are not open to new ideas, eventually they fall behind," said Obama...'. From The Huff Post.

According to a colourful article over at Car and Driver, Jordi Pujol Jr has an interesting collection of cars in his garage, which include: Ferrari F40, Ferrari Testarossa, Ferrari 328 GTS, Ferrari 348, Porsche 356, Porsche 911 GT3 RS, Porsche 906, Mercedes-Benz SL 280 Pagoda, Mercedes-Benz SLR McLaren, Lamborghini Diablo, Lamborghini Miura, Lotus Elan and a Jaguar E-Type, plus a few others...

Prisoners cost the State an average of 1,950 euros a month, says El Confidencial. There are 68,857 people currently in the nick. 7.6% of these are women and a depressing 33.6% of Spain's prison population is foreign.

'Nearly 200,000 German speakers have signed a petition against highly controversial Spanish plans to carry out oil drilling off the coast of the Balearic Islands. Representatives of the German environmental group OceanCare and the online activist site Avaaz handed the petition to Spain's environment ministry on Monday...'. From The Local.

From a Reader: Very thoughtfully, Lorna Ainsworth (a former nurse) has obtained the correct and up to date information for any UK pensioners living here who may be faced with the difficult situation of caring for their partner/friend who have become physically or mentally disabled or are terminally ill.
If you, or someone you know, is in this situation, then perhaps you should be aware that you may be eligible for the Attendance Allowance.

If you are in receipt of full UK Pension, over 65 years old and resident in Spain then you are eligible to apply for Attendance Allowance in order to meet care needs.
To summarise: You qualify.......
- If the AA claim for disability is severe enough for you to need help caring for yourself, or someone to supervise you, for your own or someone else’s safety
- If someone is terminally ill then special rules apply that make it simpler to claim AA. These special rules ensure that the claim is dealt with quickly.
- Benefit may be claimed by carer.

This payment is tax free and is not means-tested.

The official source of information is: https://www.gov.uk/claim-benefits-abroad/illness-injury-and-disability-benefits  You will need to contact the Exportability Team for a claim from abroad. They are also willing to answer any questions you may have and will send you the necessary forms by email.
Exportability Team / Email: [email protected]

Well, it's my favourite drink and it's time it became yours too! Here's a salute to Horchata from Eye on Spain

Finally:

The German band Marquess do a good job on 'El Porompompero', the signature tune of the late Manolo Escobar. Enjoy.

 

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