The remaining 43,118 homes sold were new properties (34.7% down) but above the record low reached in the previous quarter, mainly due to the reduction in VAT on the purchase of housing (from 8 % to 4%) which came into force in August and which will continue until the end of the year.
Big promoters flounder
The 6 biggest property promoters in Spain (Colonial, Martinsa Fadesa, Reyal Urbis, Realia, Metrovacesa and Quabit) on average sold only 300 properties each during the last quarter; 1,329 over the first 9 months of the year. Many of the sales were for properties outside Spain.
Industrial production down 4.2%
Spanish industrial production fell 4.2% in October, compared with the already bad October of last year, and almost 3% on September’s figure. Hardest hit were intermediate industry, like factories for motors, generators and transformers.
More unemployed
59,536 more people joined the army of unemployed in November; more than double that registered one year ago, meaning that the increase in the rate of unemployment is accelerating. The service sector was hardest hit, with 48,788 of the new jobless, followed by construction 5,769 and industry 3,389.
Mayor use municipal credit card in brothel
The socialist ex-mayor of Valverde del Camino (Huelva) paid a brothel 3,685 euros on a municipal Visa card when he was mayor. He has now resigned from his post as the provincial delegate for Public Works and Dwellings in the Junta de Andalusia, as well as other public offices, but remains General Secretary of the socialists in Valverde, ‘to be able to defend himself.’
Spanish ship building sinking
The Spanish ship building industry is in severe crisis and facing its third reconstruction in as many decades. It is expected that half of the workers in the shipyards will have to go. Galicia represents 60% of the total private shipping industry; the Region has two yards in the process of bankruptcy and 40 auxiliary companies in danger. At the beginning of this year, the sector employed more than 40,000 workers.
Madrid city ranked 43rd in European standard of living index
- Hamburg holds 16th spot, Berlin 17th, Stockholm is number 20, Brussels 22, Dublin 26, Paris 30, Oslo 33 and London 38.
Credit cards used for 17% of purchases
- However, only 14.1% of Spanish cardholders fail to clear the amount spent at the end of each month.
Air strike for Christmas?
The pilots of Iberia have announced a strike over Christmas, as an answer against the company’s plan to bring in low cost flights. The strike is planned for 18th and 19th of December.
Brussels cut cucumber compensation
The European Commission (EC) has penalised Spain by reducing the amount of compensation awarded to those who suffered in the recent “cucumber crisis” because Spain failed to pay the money directly to the farmers
The decision was made to compensate farmers and producers for damages caused by the claims of food poisoning cases, which had incorrectly been traced back to Spanish cucumbers
A total of 47 million euro was distributed in compensation in October, totalling around 66% of the total 71 million compensation fund awarded to Spain. In total, 227 million euro was awarded to member states, of which 79% has been paid out so far.
Euribor down, mortgage payments up
Euribor (12 months) the interest rate normally used to calculate mortgage repayments in Spain, fell for the third month in a row to 2.044% in November, a fall of 3.1% on the previous month.
Mario Draghi, the new Governor of the European Central Bank (ECB) announced a cut in base rates of a quarter of one point to 1.25% just a few days after taking over from Trichet at the beginning of November. In the face of alarming economic headwinds, markets expect the ECB to cut the base rate even further, hence the fall in Euribor.
The fall in the Euribor will not be much immediate comfort for those with an annually resetting mortgage. Euribor is now 33% higher than it was 12 months ago, meaning repayments on an average mortgage will rise by 400 Euros a year.
Q & A
Dear Sir
We are writing to you to enquire if any other members have experienced what happened to us this afternoon.
At 3.30 pm two young men called at our house. They showed their identity cards and a paper saying they were from an authorised installer of gas systems from El Campello.
We have a system for heating and hot water that is run on propane gas. The installation was checked in 2009 by Repsol and the parts needing to be replaced (because of expiry date) were replaced. We have a certificate to prove all this.
These two young men then proceeded to tell us that a number of other things needed replacing and we ended up paying 707.11 euros!
10 valves (one for each gas bottle) antiretourno 209,10
1 regulador PH 90,15
1 limitador 120,00
1 inversor 180,00
total 599.25 plus iva 107,86 = 707,11 euros
Is this correct? Can this happen in this way with no warning of their coming?
Do we have any recourse?
Our answer:
I am afraid you have been taken for a ride, and a very costly one. If you go to the local gas butano supplier, they will probably tell you that you have paid 10 times the normal price, and that they do not know anything about the installer in El Campello.
We have at regular intervals warned of such repair men, and told our readers to phone the local supplier for information before letting any such ‘service men’ in the door.
In addition to your supplier, you should also inform the police, the town hall and the local consumer protection office. In the last office they will be able to explain you why there is no recourse.
If you have gas butano delivered in bottles, the installations must be revised every 5 years (on the orange tube you can read the replacement date for that part), and only by a company authorized by the Delegacion de Industria and a repair man with a card issued by the regional government to identify him as an authorized agent.
More information on http://www.repsol.com/es_en/productos_y_servicios/productos/glp_butano_y_propano/paises/espana/profesionales/seguridad/envasado/
Safety tips for bottled gas - repsol.com
The crisis this week:
A series of crisis meetings, discussing a revision of the European treaties to achieve what is called a ‘fiscal union’ and a possible softening of Germany’s strong opposition to the ECB purchasing sovereign bonds of financially unstable members of the Euro Zone, has created a lull in the markets
The country risk of Spain fell to 350 points, but the interest rate on bonds over 10 years remains at 5.7%. The Ibex has shot up as a result of the hopes created by the new proposals for saving the Euro. On Wednesday morning the Ibex stood at 8,712 points
At the moment of writing this, the European leaders are gathered in Marseilles to discuss the proposal for a change in EU treaties; Mariano Rajoy is taking part
British Prime Minister Cameron has warned he will not sign any agreements that do not protect the interests of UK and the City of London
The travelling troupe of European politicians are meeting in Brussels at the end of this week
AUN: Land grab continues
GREEDY DEVELOPERS are continuing to use Valencia’s controversial ‘land grab’ laws to appropriate property despite the collapse of the housing market. Campaigners warn that even in the gloom of the current economic crisis, plans for houses, hotels and golf courses were still being submitted to local authorities for approval.
Enrique Climent, President of Abusos Urbanisticos No! – the group fighting for the rights of property owners and protection of the environment – said developers were intent on building up stocks of valuable raw material, the actual land itself.
Speaking at the AUN’s annual general meeting in Benissa, he said people might believe the battle was won with the end of Spain’s property boom but warned “this is not the time to sit back.”
As the AUN celebrated its 10th anniversary, Enrique said everyone was now living in what the Chinese called “interesting times” and predictions had come true. “Everything has blown up.”
But he asked the meeting: “With so many empty houses, what builder would be interested in building? The actual construction is not the objective – that is the second step.
PERVERSE
“The first step, which comes under the perverse legislation, is to obtain the basic raw material, the land itself.”
Enrique said councils were happy with the situation because they would see money come into town hall coffers and while the projects remained on ice, property owners were not faced with physically losing their land and paying the costs of the infrastructure.
“And currently it does not cost the developers any money to keep the land on their books – the council does not charge rates as urban land – it is still classified as rural land,” he said.
The meeting was told of a project for thousands of new homes and golf courses in the beauty spot of Callosa d’En Sarria and other plans in Castellon utilising land grab laws.
“This is why the work of the AUN is not finished yet,” said Enrique – saying the group could offer advice as well as continuing to fight for the rights of victims of land grab, people whose homes were declared illegal retrospectively, owners affected by off-plan purchase problems, and the problems of the Law of the Costas. “The work remains the same.”
Enrique said Valencia had undertaken to “modernise” the LUV legislation, itself a replacement for the earlier LRAU land laws.
DISREGARD
“But there is every indication they will continue to disregard property owners and their rights,” he predicted.
And Enrique said Spain’s general election had brought about the worst possible result for the campaigners. “Not because we do not like the new party in government that is a matter of personal choice.
“But because it is the same ruling party in central government as the one in Valencia – it will not make things any better for us.”
Enrique said the AUN’s job remained to monitor new plans being submitted and insure they were compatible with the environment, underline errors in urban planning, and where necessary go to the Ombudsman, the government in Madrid and Valencia, town councils, the European Parliament and the European Court of Justice.
“So everyone can find out what is happening and have firsthand knowledge of what is happening,” he said. “To make sure they are no caught unaware and ignorant as has happened in the past.”
Crisis-hit EU countries becoming more corrupt
BRUSSELS - Denmark has lost its position as the least corrupt country in the world to New Zealand, while Greece, Italy, Bulgaria, and Romania are becoming increasingly problematic, according to Transparency International's latest Corruption Perception Index published on Thursday (1 December).
The annual report combines results from 17 different surveys that look at enforcement of anti-corruption laws, access to information and conflicts of interest.
"Eurozone countries suffering debt crises, partly because of public authorities' failure to tackle the bribery and tax evasion that are key drivers of debt crisis, are among the lowest-scoring EU countries," the watchdog said in its press release.
Italy - the latest problem-child of the sovereign debt crisis - fell to 69th place from 67th in the world listing of 183 countries, putting it equal to Ghana, and behind Turkey, Georgia and South Africa.
Compared to two years ago, its score worsened from 4.3 to 3.9 on a scale where 10 is the least corrupt and one is the most.
Greece - the first country to be hit by the euro-crisis - also saw its corruption score worsen over the last two years, down from 3.8 in 2009 to 3.4 this year, the same score as Colombia.
Neighbouring Bulgaria followed the same trend, down to 3.3 compared to 3.8 two years ago. It scored worst among EU member states, ranking 86th in the world, behind Morocco, Peru and Thailand. Staying in south-east Europe, Romania saw its score slide by 0.2 points over the past two years, down to 75th position compared to last year when it was 69th.
Croatia, whose government is to sign the EU membership treaty next week and to join EU leaders for the first time at a Brussels summit, ranked slightly better than Italy, with a score of 4.0, down 0.1 points compared to last year. It shared the same score as Slovakia, whose grade has also worsened over the last two years by 0.5 points.
The same trend was seen with other EU countries further up the ladder: Latvia, the Czech Republic, Hungary and Lithuania.
Three notable exceptions to the downward revisions saw the scores of France, the UK and Germany improve over the last year: Paris and London climbed 0.2 points compared to 2010, while Berlin was lifted from 7.9 to 8.0.
Denmark and Finland share the second-best score in the world: 9.4.
Somalia and North Korea share the worst score in the world: One.
Letter from
BANK GUARANTEES IN SPAIN ACTION GROUP
To Viviane Reding
European Commission Vice-President in charge of Justice, Fundamental Rights and Citizenship
Dear Viviane Reding
Re: BANK GUARANTEES IN SPAIN FOR OFF-PLAN PROPERTY PURCHASES
We write to you as citizens of the EU who have paid deposits in advance for off-plan property in Spain. Unfortunately our deposits are now at serious risk due to Spain’s systemic failure to enforce its own laws, in particular LEY 57/68 which relates to Bank Guarantees for Off- Plan property purchases. Our cases are further compromised by the inadequate nature of the Spanish legal system and the subsequent lack of judicial enforcement. We would be most grateful if you could clarify the situation relating to member state competence, in particular in relation to systemic failure to enforce legislation (as appears the case in Spain). Have we understood correctly that the EU can act on citizen’s behalf if this is the case, and if so what powers do they have at their disposal? Could the Auken report's suggestion to withhold contributions to Spain, redirected to a compensation fund be enforced, and if so what realistic timescale would be attached to this process? Does the EU have powers to protect its citizens in this regard? Please see attachment entitled “Extracts from the Auken Report”. We were most interested in the speech given by Mr A Walker QC at the Property Rights Seminar on June 14th 2011 in relation to establishing solutions to this problem, and wondered if you intend to draw upon his expertise in this regard in the immediate future? (http://www.alde.eu/event-seminar/events-details/article/eu-property-rights-and-wrongs-37447/ )
Perhaps your legal colleague Michael Shotter is in a position to advise? Do you consider there is a realistic means of ensuring consumer protection via the EU, with regard to systemic failure to enforce legislation in Spain, and is there any infringement process that can be applied in this case? We are led to believe that Spain currently provides statistical data to the CEPEJ (The European Commission for the Efficiency of Justice) who analyse results and then make evaluations of the efficiency of their judicial system. May we enquire therefore if the CEPEJ's statistical data relating to Spain confirms the problems that we are witnessing first hand, relating to this systemic lack of judicial enforcement, and what options are at our disposal to act upon this evidence? Can this evidence act as proof to effect either budgetary controls on Spain or apply an infringement? Could you please explain what is meant by this description of CEPEJ’s tasks as “to propose to the competent instances of the Council of Europe the fields where it would be desirable to elaborate a new legal instrument”? “The establishment of CEPEJ, which is ensured by the Directorate General of Human Rights and Legal Affairs, shows the intention of the Council of Europe not only to elaborate international legal instruments but also to promote a precise knowledge of the judicial systems in Europe and of the different existing tools which enables it to identify any difficulties and facilitate their solution.” Is there any legal instrument that could effectively assist our cause? Can a solution to these genuine and compromising problems that so many are encountering be facilitated?
Conclusion received 20.03.2009 : In the absence of an infringement of EC law, the European Commission has no competence to intervene. The petitioner should continue to seek redress through the competent judicial authorities in Spain invoking the non respect of Article 6 of the ECHR At present the Spanish Judicial Authorities are far from competent and there has been inconsistency in their rulings and many outstanding appeals, embargoes and enforcements remain unresolved for years. We are therefore being denied the ability to act upon the EU Commission's conclusions to this petition. Ruth Genda subsequently compiled a second petition: The European Commission made the following conclusion to a petition submitted by Ruth Genda : http://www.europarl.europa.eu/meetdocs/2009_2014/documents/peti/cm/777/777511/777511en.pdf http://www.gopetition.com/petitions/stop-the-spanish-property-roadshow-open-letter-to-davi.html This has at present in the region of 1400 petitioners. The petitioners’ comments provide an insight into the many continuing problems associated with property purchase in Spain. The impact of delays is clearly a major problem resulting in systemic failure to enforce existing legislation. We also wish to bring to your attention Suzanne Wyatt's petition: http://www.europarl.europa.eu/meetdocs/2009_2014/documents/peti/cm/802/802732/802732en.pdf
The European Commissions conclusions were received on 22 January 2010: In response to the European Parliament's request for information as regards the issue of bank guarantees and their reimbursement, and the links between this issue and other possible EU Directives, the Commission would like to note the following. EC legislation does not currently include provisions concerning guarantees which are paid to banks in relation to an acquisition of immovable property or the release of such guarantees. Member States are, therefore, free to introduce or not in their legislation rules governing such bank guarantees. The Commission therefore suggests that the petitioner contact the appropriate Spanish authorities. We wish to point out that LEY 57/68 - the law governing Bank Guarantees for off-plan property purchases in Spain was introduced in 1968. As you will see from Keith Rule's detailed petition text and all sections within this petition website, LEY 57/68 has not been enforced. http://www.bankguaranteesinspain.com/
We will expand a little on the detail, which hopefully will act as assistance in this regard, and apologise in advance for this lengthy correspondence but trust that you will understand our need to do so. The slowness of the legal system and the subsequent lack of law enforcement forms part of the whole topic of Bank Guarantees. Many purchasers should not have to go to court according to LEY 57/68, but due to the attitude of the Banks they are being forced into taking legal action. They are then at the mercy of the Spanish court system. The EU/EC repeatedly refers petitioners back to the competent legal system in the member state – but the slowness and incompetence of the Spanish court system is of great advantage to the guilty party (banks/developers) and totally to the detriment of the consumer, leaving petitioners unable to act upon the European Commission's conclusions "to seek redress through the competent judicial authorities in Spain".
It is grossly unfair to continue directing EU citizens towards a "competent" system of justice, when no such system exists in Spain! Innocent EU citizens are continually compromised by this lack of enforcement of successful first instance rulings relating to developer breach of contract, the first step on the legal ladder to recompense.
Developer appeals are submitted as standard practice and left for indefinite periods without judicial resolution. In the interim developers have been asset stripping, an illegal act once an enforcement has been petitioned. Petitions/preliminary enforcements/embargoes etc have also been significantly compromised as purchasers denied of timely judicial enforcement then find themselves at significant risk as developers declare insolvency or go into administration. At this point those who have won their first instance cases are left at the bottom of the pile as ordinary creditors. And who is at the top of the pile? Yes the Banks that have been negligent in the first place! The impact of this lack of efficient judicial enforcement results in purchasers being unable to obtain financial redress, other than to follow yet more costly legal routes to recompense which become subjected to yet further indefinite delays.
This catch 22 scenario has become a downward spiral by which the purchaser is subjected to continual incompetence. As for the complaints procedure, the CGPJ in Spain are not responding appropriately to complaints re lack of enforcement, for example we have recently been advised, after waiting 3 and a half years for a judicial resolution: "regarding the Appeal proceeding I inform you that we have received an answer from the Costumers Service of Consejo General del Poder Judicial (CGPJ). However it is not satisfactory because they state that all the stages have been completed properly according to their internal organization and the general rules consequently there is not a "real delay". It is also very frustrating for us that Lawyers, Procurators and plaintiffs seem not to have "any suitable weapon" to put pressure on Courts decisions although the CGPJ offers this kind of service. All answers we have received regarding many of our proceedings are the same more or less." So the complaints procedure is worthless. It is of great concern that these statistics relating to lack of resolution to cases are probably being hidden from view since they appear to be falsely categorised as being completed when in fact they are anything but completed in terms of enforcement.
Our conclusion: Despite many empty words by Spanish Government officials, there still remains little evidence of any effective ‘ongoing policy reforms’. Lawyers and Banks have been negligent, the court system is overloaded, judges are inconsistent and real justice is still an expensive dream for many victims. There remains a basic lack of understanding of LEY 57/68 (the existing law relating to Bank Guarantees, in place to protect consumers of off-plan purchase), and in many cases the law is not applied properly nor consistently enforced. The Supervisor of the Spanish Banking System – the Banco de España - is totally ineffective and has no real power. The result is that the Banks have been allowed to ignore their obligations according to LEY 57/68 and work together with corrupt developers to blatantly steal purchaser’s off-plan deposit funds. It is stated within http://ec.europa.eu/justice/civil/index_en.htm "In a genuine European area of justice, individuals should not be prevented or discouraged from exercising their rights. The incompatibility and complexity of legal or administrative systems in EU countries should not be a barrier." So where does systemic failure to enforce member state law fall into this European remit? We suggest that this constitutes a disproportionate and intolerable interference, impairing the very substance of the rights guaranteed by community law.
How are we currently protected from this barrier that prevents so many innocent citizens from achieving justice in Spain? We note from the conference on European Contract Law in Poland a few days ago your commitment to maintain a high level of consumer protection and the need for consumers to have confidence that their core rights are guaranteed. From the outset LEY 57/68 was intended to provide consumer protection for off-plan purchasers in Spain, and many would never have committed to this form of purchase if these core rights had not already been established by Law in Spain in the form of Bank Guarantee provision. We trust that you will recognise how consumers' confidence is now shattered by the systemic failure of Spain to consistently enforce this law and how this has impacted on so many innocent people's lives. We therefore now beg your immediate assistance in establishing an effective route to justice, for the thousands of innocent EU citizens subjected to this Spanish Bank Guarantee abuse, and we look forward to your response on this matter. For your information we can provide a CD, containing a detailed file, entitled "Enforce the Law", that relates to LEY 57/68 in Spain. It has taken some considerable time to formulate this knowledge and evidence, but we trust that it would act as an effective supplementary educative document to assist in this process, should you require.
Yours sincerely, Anne Simpson - [email protected] Ruth Genda - [email protected]
Keith Rule BANK GUARANTEES IN SPAIN ACTION GROUP [email protected] www.bankguaranteesinspain.com
The rallies of this week
Seeking Alpha
Published this
The two major rallies this week came on the back of strong Black Friday sales and massive coordinated Central Bank intervention, shocking investors who were going into the Thanksgiving holiday thinking that the world was on the verge of another collapse. Truth be told, they may be right.
Over the last few weeks, credit markets in Europe locked up, due the Greek debt restructuring. It all started when public investors in Greek bonds were told that they would be forced to take a 50% writedown while the private holders remained whole. To top it off, ISDA did not consider this a credit event, and the entire CDS market was torn apart.
If you were one of the private holders, how would you feel about European sovereign debt? Exactly. That touched off a stampede to the exits, with buyers going on strike as bond auctions in Latvia and Germany failed.
Simply put, while the EU thought it was putting the issue to rest, it inadvertently unleashed a cascade of selling as sovereign debt got re-rated to reflect the new risk profile in Europe.
The EU then went on a Roadshow for the EFSF, taking its idea to China and Russia in hopes of support. But without a finalized plan of action, neither one was interested in helping leverage the EFSF. Then, to top it off, the Greeks made the untimely decision to ask for an even greater write-down of 75%. The unmitigated gall of the Greeks touched off a buyers' strike and forced the Federal Reserve and five other Central Banks to lower swap rates in order to temporarily rescue the European debt markets.
The problem is that this move is only temporary and will not solve the inherent problems in Europe which stem from an inability of Italy and Greece to get their spending under control. Now the Federal Reserve has been forced to bail out the European debt markets in order to save the US banking system. How could this become systemic, and where are the major risks in the US banking system?
Take a close look at the stock price of Bank of America (BAC), which has lost close to 60% of its value this year. That is your first canary in the coal mine. The second canary in the coal mine? Greek bond yields, where the yield on one-year Greek debt crossed 300% last week.
The only safe place right now is in the arms of gold (GLD) (DGP) and silver (SLV) (AGQ), as the massive burst of liquidity will raise the prices back to highs made earlier this year. Any move like this by global Central Banks should throw up tons of red flags with investors, and everyone should be wary.
The bulk of the gains this week were in the overnight markets, with very little left for investors. While a Santa Claus rally may be starting, investors should watch out for the coal that may be appearing in investors' stockings next year.
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