Business Over Tapas (Nº 185)

Editorial:

Spain now has a government, with a full deck of ministers – some new, some returned. Two of the ‘hawks’ have been removed: the voluble Sr García-Margallo, who seemed to be over-keen on the acquisition of Gibraltar, and the arch-Catholic minister of the interior, Fernández Díaz, best remembered perhaps for admitting in an interview to having a guardian angel called Marcello. The two politicians have now been found jobs heading-up commissions in the Congress. Indeed, in positive news, the economy, now once again under the firm hand of Mariano Rajoy, is in positive territory, and we are told that ‘Spain will “easily” meet the EU deficit target for 2016...’.

Housing:

While British visitor numbers are ‘up’ for the Costa del Sol, we read in Property Wire that ‘Brexit is bad news for the recovering Spanish property market with a real estate conference in Marbella hearing that it is already having an impact with a fall in British buyers. Interest from British buyers in locations like the Costa del Sol where they have been the biggest group of foreign buyers for many years, began dwindling in the run up to the European Union referendum in June and since...’.

In larger terms (including, of course, domestic buyers), property sales are increasing, and OPP.Today reports that ‘Property demand in Spain’s tourist towns is increasing along with rises in visitors, say agents and developers ... Growth in tourism from January to August this year has increased by 11% and Spanish property website, Kyero.com, is predicting a corresponding 11% rise in Spanish house sales in 2016...’.

Mark Stücklin at Spanish Property Insight says that ‘The latest figures from the Government confirm that the home building business is gradually coming back to life.

Planning approval was given for 42,869 new homes between January and August: up 35.7% compared to the same period last year according to the latest figures from the Ministry of Public Works. This figure is interesting because it shows that home building in Spain is gradually coming back to life after a brutal crisis that saw home building volumes crash 95% from peak to trough...’.

‘Property promoters throughout the Valencia region are demanding the payment of 316 million euros from the Generalitat in compensation due to failed PAI development projects on behalf of the former PP government. But it is feared that this is merely the tip of the iceberg, and the current Valencian executive fears that an avalanche of appeals is still to come...’. Excerpt from an article from the Costa Levante News found here. It seems many developers are now seeking compensation from town halls and the regional governments (maybe not just in Valencia) for various development plans, not just urbanizations (PAIs) but entire town plans (PGOU) that were killed because the developers, town halls and the region itself did not follow proper legal process in approving them. (Thanks to Charles for the item)

Tourism:

The Costa del Sol expects to receive over three million British visitors in 2017, says 73TV. (Thanks to J-Antonio). From The Sur in English, we read: ‘World Travel Market kicks off with record tourism figures for Andalucía. The region will have registered more than 50 million nights spent in hotels in 2016. The World Travel Market in London got off to a good start for Andalucía on Monday when the president of the Junta, Susana Díaz, announced that 2016 was due to break the 50 million mark in terms of nights spent in hotels by tourists. The strength of the British market, by far the most important source of international tourists for southern Spain, has played a key role in the record-breaking figures for this year...’. Indeed, British visitors are key to Spain’s tourist industry, with 17 million visits expected for this year, an increase over 2015 of 11%.

Finance:

Unemployment is slightly higher for October, says El Huff Post quoting Government figures. The number actively seeking work is quoted as 3,764,982 persons. More figures here.

The economic plans from the Government to create employment and wealth are outlined by the El Blog Salmón here.

Politics:

The ministers who have been replaced: Margallo, Fernández Díaz and Defence Minister Moranés. Story at El Mundo. The full ministerial list is here.

The PSOE has ‘purged’ the fifteen deputies who voted against Mariano Rajoy, losing their representation in various parliamentary organs. A report at Cuarto Poder here.

With the departure of Pedro Sánchez, the ‘intention of vote’ for the PSOE has fallen six points to just 17%. Podemos is ahead at 22% and the PP remains in first place with a comfortable 34.5%. Ciudadanos would take 13% of the vote. La Información reports.

‘Podemos leader Pablo Iglesias has put down to “good luck” the fact that a fellow party member made €20,000 on the sale of a subsidized home in 2010. News of the sale has created a public outcry because Ramón Espinar, who was not yet a Podemos senator, has been an outspoken critic of speculation with public housing in the Madrid region. Espinar admitted last week that he purchased a subsidized home in Alcobendas, north of Madrid, and resold it just months after signing the title deed in March 2010...’. El País in English runs the story here.

El Diario says that the ‘barons’ who supported the end of Pedro Sánchez as leader of the PSOE have still not decided who will be the next party secretary. It looks like they will wait patiently until the spring before holding a party congress.

Público tells us that Iglesias and Rivera have squabbled over Trump victory in US: ‘The Ciudadanos leader says that Podemos must be "happy" with the victory of the Republican candidate because "populisms, whether on the extreme right or the extreme left, defend the same ideas". The general secretary of Podemos answered by calling Rivera "the ignorant lapdog of Rajoy"...’. No love lost there..! From El Español comes the slightly more comforting headline: The Government of Spain does not fear Trump. "Business as usual" is the diplomatic line in Madrid while Foreign Minister Alfonso Dastis makes his debut in radio and television saying "I am not worried by the news from the USA"...’. Mariano Rajoy’s message on Twitter reads: ‘Mi enhorabuena a Donald Trump por su victoria. Seguiremos trabajando para reforzar la relación que nos une a EEUU, socio indispensable. MR’ – Congratulations to Donald Trump, and we shall continue to work together with the USA, a vital partner.

Corruption:

‘On Wednesday, agents of the National Police went to the dependencies of the Generalitat Valenciana in search of documentation related to the European Grand Prix Formula 1 that a court is ‘secretly’ investigating since last week. Apparently, the agents have arrived at the public company Circuito del Motor in search of documentation related to the organization of the races...’. The investigation is part of the process against Francisco Camps and others. More at El Mundo here.

Crime:

An international criminal gang has stolen millions of pounds in an unprecedented cyber-attack on Tesco Bank. Spanish and Brazilian fraudsters hit more than 25% of the UK bank’s current account holders in the attack. They gained access to 40,000 of the bank’s 136,000 current accounts and stole money from 20,000 of them. Customers found that their accounts had lost anything between €30 and €3,300. Tesco was forced to freeze all online transactions Monday after what was the biggest ever raid on a British bank...’. The Olive Press has the story here.

Brexit:

Compromis, an opposition party in Benissa, Alicante, says it has enough support to put through a motion in the town hall to ‘alleviate as far as possible the likely consequences of Brexit for British citizens living in Benissa and also for the people of the town who work and / or study in the United Kingdom’. Other local towns working on similar motions include Calpe, Torrevieja, Parcent and Teulada. Jávea has already passed a similar motion, as have other towns in Spain with appreciable numbers of British residents.

From The Independent comes a story which, while unlikely, is cheering many British residents in Spain: ‘The European Parliament is to consider a plan that would allow British citizens to opt-in and keep their European Union citizenship – and its associated benefits – once the UK leaves the EU. The proposal, which has been put before a parliamentary committee as an amendment, would grant the citizens of former member states the voluntary right to retain “associate citizenship” of the EU, such as after Brexit...’.

Economics:

Some Further Comments on Brexit and Europe

by Andrew Brociner

A few things have come to light after the UK referendum, which were not adequately considered at the time. One of these is the cost and complexity of withdrawing from the system. The UK will now have to go through many years of negotiations; long after article 50 is triggered, before matters are decided. When Grexit was being talked about, an exit strategy was considered in parallel, to prepare in the event of withdrawal. But when countries joined, the system was supposed to be irrevocable, with no way out being considered. This was, on the one hand important, as markets needed assurances that it was not some wavering scheme and that countries were totally committed and in it for good. But, in light of the recent events, it appears that some form of exit strategy needs to be put in place in more practical terms.

Another result of Brexit is a depreciating currency. That the pound decreased from 1.31 euros on 23 June to 1.17 on 6 July could be interpreted in the same way as past significant shocks, such as when the UK decided to take sterling out of the ERM in 1992. But the pound has continued to depreciate, given the continued uncertainty, to a low so far of around 1.1 in early October, which was already a depreciation of around 15% since the referendum and a depreciation of around 23% since 19 November of last year. Moreover, it is unknown how long it could continue, with some analysts saying it could go to parity. Clearly, the continued depreciation of the pound so long after the referendum result – long after the shock has worn off – is a continued reflection of the uncertainties surrounding the question. Markets do react to uncertainties, and in this case, they are also favourable to news which leaves the UK in for as long as possible, preferring the status quo and taking into account the negative effects of leaving, which is why they have recently been propping up the pound after the court ruling that triggering article 50 must have Parliament's approval.

One of the effects of the depreciating currency on the UK economy is inflation. Inflation is forecast to rise by quite a lot in the next few years, as the price of imports will increase. Just to illustrate, annual inflation in August was 0.6%. By September, it had already jumped to 1%. In October of last year, it was – 0.1%. The October figure of this year will be out next week, but the Bank of England forecast is for 1.3% by the end of the year and as much as 2.7% in the following years, figures which have had to be upwardly revised, and which exceed its inflation target of 2%. The impact on inflation is therefore significant.

The depreciation of the pound could, at one time, have been positive for the economy by making manufactured goods more competitive and so boosting exports. But, Britain's manufacturing base is no longer what it once was, and so this avenue for growth is much reduced, as the switch to services has been made. In this respect, another one of the negative consequences of Brexit will be on London as a financial capital. There will be increased costs associated with being outside the system, eroding the competitive advantages that it could have had, and likely leading banks to relocate to where they are more competitive. In that case, the effects on the UK economy would be significant as well. It seems that the effects of Brexit, with its long and drawn out uncertainty, will be felt for some time to come.

Various:

Joan Ribó, the mayor of the City of Valencia, has some unconventional ideas which go with him being the representative of Compromis. These include an order than all Christian symbology must be removed from the city’s public cemetery. Story at Actuall here.

‘I joined Andrew Mortimer and Jim Simpson (together, we have started a group called Europats to help protect British and other European expatriates from national pressures and injustices) to discuss the subject of residences for the elderly.The meeting took place in the magnificent offices of the Subdelegación del Gobierno en Almería - the senior representation of the national government at a provincial level...’. From Lenox’ blog.

Albox is to have a new residence for the elderly as Grupo Gerial and the Town Hall of Albox sign an agreement to provide the facility which will cover 4,420m2 with 1,300m2 of outside space and a capacity for some 70 users, elderly and dependants. It will be set out in 22 double rooms and 16 single rooms. (Thanks Maura)

Drones flying over the Doñana, the delta where the Guadalquivir flows into the Atlantic Ocean, show that illegal farming there is drying out the famous wetlands: established as a nature reserve in 1969. Information now shows that there are 1,700 mostly illegal irrigation pools in Doñana occupying 235 hectares. Video and story here.

Really? The ‘agricultural engineers’ of Almería have asked to have the chumbo cactus (the one that’s dying off from the cochineal attack) to be removed from the register of ‘invasive plants’. Not that there are many prickly pears left, and the only ones you’ll find in the markets are now Italian imports. The story here.

The Salvados TV program deals with solar energy in a video clip here from LaSexta. A quote from an expert in solar energy: ‘Spain was the undisputed leader in the global photovoltaic market in 2008 but with the restrictive PP law many companies have not been able to withstand the decline and have disappeared.’ He adds ‘No other modern country in the world taxes the sun’.

‘A hat trick: “A Monster Calls” has overtaken “The Secret Life of Pets” to become the highest-grossing film in Spain so far this year, besting big Hollywood studio titles and giving director Juan Antonio Bayona his third No. 1 movie of the year, at least for now.

Starring Felicity Jones and Liam Neeson, and distributed by Universal Pictures Intl., “A Monster Calls” grossed €235,341 ($262,057) on Friday at Spanish cinema theatres for a total Spanish gross of €21.9 million ($24.4 million), and counting...’. From Variety here.

‘It’s all for love as Spain’s Barbara Cartland finally gets a chance to woo British readers.

Corín Tellado is famed throughout the Spanish-speaking world for her light romance novellas. ... This remarkable and unassuming Asturian author, who died in 2009, produced more than 4,000 works during a six-decade career. ... Her escapist tales of love and loss, suffering and redemption, have sold more than 400m copies – and a great deal more than that if the millions of pirated Latin American editions are counted. In 1962, Unesco declared her the most-read Spanish author alongside Cervantes...’. Now one of her novels has been translated into English, and new readers can discover Corin Tellado. From The Guardian.

The Partido Popular is keen to change the law to stop jokes, japes and insinuations on the ‘Social Media’ about public figures. Well, the political ones anyway. Can they do this? We can squeeze in one or two more cartoons on the Business over Tapas Facebook page, but frankly, it ain’t looking good... Story at Post Digital here.

See Spain:

A pretty white town with a wonderful castle: that’s Vélez Blanco in Northern Almería. ‘Velez Blanco has a number of fuentes - or fountains - which carry the clear spring waters of the Segura from the Sierra Maria Los-Velez, and as we drove in, we saw one of the locals struggling up the hill with four 8 litre containers of spring water. I had to try this for myself, and I did - from the most famous and beautiful of the fuentes the 18th century Fuente de la Novia (Fountain of the Girlfriend). There's water, and then there's Velez-Blanco water, and that's something really special...’. From Eye on Spain here.

Finally:

Brexiteers, Trumpiteers... when will we notice that they both end in 'tears'..?