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Weekly Report

Business Over Tapas (24th Dec. 2014)

By Lenox Napier and Andrew Brociner

miércoles 24 de diciembre de 2014, 02:01h

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. Business over Tapas and its writers are not responsible for unauthorised copying or other improper use of this material.

Editorial:

The national lottery was held on Monday, with winners taking their decimos quietly to their bank managers for an urgent chat. This year's winning number, El Gordo, pays 400,100€ for each decimo, that's to say, a tenth of a ticket. Many other numbers have important prizes which, even after the tax-man takes his cut, makes a huge difference to the lottery-enthusistic population. The TVs were devoted all morning to the chanting children, who sing out the numberrrr and the corresponding priiiize. Didn't win anything? There's another big one, the El Niño lottery, which comes up on January 6th...

Housing:

'2014 has been an astonishing year not only for Spain's economy but its property market, boosted by a record-breaking year for tourism. Spain remains Britain's top holiday destination and as the UK economy stutters its way through recovery, more families are returning to the perennially popular Costas, with significant uplift seen also in the Spanish islands...'. An inspired piece from Property Showrooms.

'Falling property prices in 2014 are likely to drag Spain's "bad bank" to its second annual loss in as many years, raising concerns that a clean-up of the country's financial sector could take longer than expected. … The bad bank, known as Sareb, holds 50 billion euros ($62 billion) in land, buildings and loans inherited from bailed-out banks. It was set up to draw a line under Spain's banking and property woes...'. From Reuters.

'The adjustment in the Spanish property market “is coming to an end”, after a cumulative fall of 43 per cent in prices since the peak, claims the Director of the Bank of Spain’s Research Services, José Luis Malo de Molina. “We’re currently in a stabilisation phase of the property market,” the bank executive stated, basing his views on data showing a rebound both in prices and number of property sales. He emphasised the Spanish Statistical Institute (INE) house price index showing that property prices have been rising for two quarters after a price adjustment of 43 per cent from the peak, according to bank data and in real terms...'. Report from Mark Stüklin's Spanish Property Insight.

Tourism:

From The Telegraph: 'Magaluf declared ‘mature tourist zone’ in crackdown on drunken excess. The Mallorcan resort wants to get rid of its image as a place for sexually charged debauchery, especially among young Britons...'. So how important is tourism for the ordinary population? A piece by Lenox examines the case for Mojácar here.

A 'Yotel' is apparently a hotel with tiny luxurious rooms, modelled on the Japanese 'capsule' idea. Now we read that the company is searching for possible sites in Madrid and Barcelona.

Benidorm hotel occupancy data shows the resort to continue as a firm favourite. 'Benidorm has continued to grow, showing a rise of 1.3 points in hotel occupancy this fortnight to 61.4% on average, against 60.1% in 2013. The recovery of the British market is the cause of this growth and confirms the words of the President of HOSBEC that "last summer there was a slight drop in volume thanks to the warm weather enjoyed in the United Kingdom, but with the terrible weather there, Britons have recovered the urge to travel"...'. The breakdown is interesting for Benidom holidaymakers, with 60% Spanish, 33% British, Belgians in third place with 3.8% of the market … and (nota bene) the Russians at 0.1%.

61.7 million foreign tourists visited Spain through November, a growth of 7.2%. The French were up by 11.6%, the British by 4.9% (at 14,380,000), the Germans up by 6% to 9.9 million. Details here. But, how accurate are these accurate numbers, collated by the Movimientos Turísticos en Fronteras, the FRONTUR, and offered by the Ministry of the Interior? Does it include business-people passing through, or delivery people. Does it include foreign residents? How do they control the open frontiers with France or Portugal? We don't all stay in hotels, you know (yet!)...

Finance:

The Institute of Economic studies thinks that wages should be 'more flexible' (i.e. cheaper) to help kick-start the economy and lower unemployment. Spain is 117 out of 144 countries in 'wage flexibility' according to the World Economic Forum (The USA, for example, is 24).

'While the executive led by Mariano Rajoy and the Popular Party are busy explaining their economic achievements and how these are bringing about an end to the crisis, citizens seem to have deaf ears or, at the very least, are responding with scepticism. The latest survey from the Department of Social Studies and Public Opinion (GESOP) reveals that the optimistic message is not generally believed. Thus, 81.5% of citizens consider that the economic situation in the country is "bad or very bad", and more than 61% believe that the crisis has not yet hit bottom...'. From El Economista.

'At the stroke of midnight on Dec. 31, a rent-control rule introduced under Spanish dictator Gen. Francisco Franco comes to an end, spelling financial turmoil for thousands of small store owners. … The move, which will force businesses that can't afford to pay new market-indexed rents to close shop or move to cheaper premises, will also free up prime property that has been inaccessible to retailers for decades, and comes as Spain is poised to post its fastest growth since 2007...'. Found at The Chicago Tribune.

Politics (2015 is an election year):

Spain's political parties are ruined, according to a report in Vozpópuli, owing between them 237 million euros to the banks (despite receiving 209 million from the Government to pay off debt back in 2012). The story notes that, if they were a business, they'd be bankrupt; if they were a family, they'd be desahuciados (evicted)!

The new spokesperson for the PP is Raphael Hernando, who's occasionally ill-considered remarks as a diputado has given him a certain reputation among critics. Here he is more forthright: 'Podemos presents itself as a cleaning product from the supermarket, but in reality, once you try and wipe the counter down, it leaves everything filthy, not so say, covered in shit'. El Mundo enjoys itself here... and the video is here. Naturally, in the best tradition of Spanish politics, the leader of Podemos promptly answered the PP: 'Y tú más'.

The junior member of the Junta de Andalucía coalition, the Izquierda Unida, concerned by the high levels of corruption in the region, says it will reconsider its support for the PSOE-led Government before June.

'The Junta de Andalucía boss Susana Díaz has come under fire from the head of the Partido Popular in Cádiz for having no interest in the region she governs. Antonio Sanz said that these were ‘times of corrupt politicians’ and that Díaz (PSOE) ‘isn’t interested in Andalucía, she doesn’t govern or manage anything; she isn’t a president, she’s just the leader of Pedro Sanchez’s opposition’...'. From The Olive Press.

88% of Spaniards are against the new Citizens Protection Law, the popularly called 'Ley de la Mordaza', according to The Wolf Report here. A quote: '...For many Spanish people, the new law is the ultimate affront, bearing disturbing echoes of the Public Order Tribunal that Franco’s dictatorship used to try political crimes such as public criticism of the Chief of State, justice courts and government; rebellion and sedition; public disorder, illegal propaganda, and the discovery and dissemination of official state secrets...'.

Corruption:

'The Spanish king's sister, Princess Cristina, is to face a tax fraud trial over alleged links to her husband's business dealings. It is the first time for modern Spain to put a royal in the dock to face trial. Her husband Iñaki Urdangarin is accused of embezzling millions in public funds with a former business partner. The couple deny wrongdoing. Prosecutors in Palma, Majorca, say Mr Urdangarin's sports foundation misused public money...' From BBC News.

The Mayoress of Alicante, Sonia Castedo, is set to declare in court on January 16th over her part in granting improper permits for the giant Ikea shop in Rabasa. Castedo is also under investigation in a separate case, the Caso Brugal (a broad case which also concerns the ex-mayoress of Orihuela, Mónica Llorente).

Courts

The Attorney-General Eduardo Torres Dulce resigned from his post last week, for 'personal reasons', although the Government's interference in legal matters may have been a contributing factor. The post has now been given to a woman known to be an 'anti-abortionist' (according to El País') called Consuelo Madrigal Martínez-Pereda.

(Following on from a report in BoT last week...) 'The Anti-corruption Prosecutor has dropped the complaint by the Platform by a New Energy Model over the three billion euros given to the electric companies by the Ministry of Industry back in 2008, with the PSOE administration in charge. He did so after questioning in secret a number of erstwhile senior executives in the energy companies. The Prosecutor's office considers that the failure to follow the ministerial order to return monies to the consumer as part of the costs of transition to full competition back in the late nineties was not a crime...'. Found at El País.

Francisco Nicolás Gómez Iglesias – better known as “Little Nicolás,” the 20-year-old university student whose apparent remarkable ability to worm his way into Spain's political elite, has stunned the nation – has refused to provide a statement to the Madrid court investigating him for charges of fraud, falsifying documents and usurpation of public office...'. The story at El País in English. (He's a sort of Walter Mitty Character).

Tax:

'Tax returns may not be as high on the Christmas priority list as eating turkey and having fun, but some advance planning could save a headache in the new year...'. Says The Telegraph here, with several deadlines for ex-pats coming up...

Various:

UK pension schemes are unable to pay pensions, tax-free lump sums and refund of contributions to over 250,000 former pension scheme members living abroad. Here's the place to see if you are one of them: http://www.findmylostpension.com/

'The police inspector and chief of the Anti-narcotics Group and provincial brigade of the Judicial Police in the main headquarters in Murcia has been arrested in a matter related to drug trafficking, according to Europa Press...'. From Typically Spanish. Whoops!

A full report at the Real Instituto Elcano on the impact and ramifications of the Spanish frontier controls on Gibraltar and the introduction of the EU into the situation...

The old measures of a newspaper's success, whether the OJD (useful print run) or the EGM (estimated readership) – both showing declining support from readers – are no longer accurate, says the Director of Unidad Editorial, the company behind El Mundo. Noticing that now readers use the Internet to find the news that interests them, thus only checking on certain stories rather than reading the entire product. He offered no remarks on the loss of readers through links provided by other sites or aggregators, particularly Google News...

Google News España is dead... or, wait, what's this? 'Noticias destacadas: Google Noticias'

Which seems to be news about Spain, in Spanish, but from South America... plus links to El País from Spain (masquerading as a South American paper perhaps?). Hold on, here's Entorno Inteligente, a South American aggregator of Spanish News...

A five-minute introduction to the Spanish Civil War on video (in English) here.

While we anxiously wait for a 'firm response' to the North Koreans for, perhaps, knobbling a Hollywood film poking fun at the Dear Leader, there is much more worrying concerns over Obama's statement that 'the Internet is like the Wild West. We need laws to oversee the operation of the Internet, and cyber security is an urgent subject'. How the Spanish Government would agree! Quote and sentiments found at Gizmodo. The full Daily News report here.

Finally:

Here's a fine list of towns and villages to visit in Southern Spain from Vacaciones-España, with photographs and introductions to 23 beautiful destinations...

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