Business Over Tapas

Editorial:

Spain doesn't spend much on justice. There are about 10 judges for every 100,000 inhabitants here, while the European average is over 21 per 100,000. The public purse spends about 1% of the GNP on justicia, against the European average of almost double this. There about around five million cases a year entering the Spanish books (proportionally, the highest in the world after the USA) – not because of criminality, but because it's just the system in Spain – workers tribunals, small claims, denuncias and so on.  All this means is that a court-case takes a long time to come to a resolution.

But fear not, we have way more notarios in Spain than the European average.

Meanwhile, in a farce worthy of Tele5, two judges from the Audiencia Nacional, Javier Gómez Bermúdez and Pablo Ruz, are fighting over who should lead the investigation in the Luis Bárcenas bribery inquiry.

Court Dates:

The ex-treasurer of the Partido Popular, Luis Bárcenas, has been called to declare in front of  Judge Pablo Ruz this Friday at 10.00am... and then in front of Judge Javier Gómez Bermúdez at midday. Apparently, if the Partido Popular could be said to prefer one judge over the other, it would be the second one...

Housing:

The European Union Court of Justice ruled last week that the legal process of evicting people from their homes in Spain is “incomplete and insufficient” because it results in the “definitive and irreversible loss of homes” without first taking into account bad mortgage practice.

Spanish legislation, says the ruling, goes against the norms established by the EU, where those who are threatened with eviction should be able to halt proceedings while an appeal is heard.

In Spain evicted citizens are only able to appeal the decision in a separate hearing once they have been removed from their homes. Then, at best, they are awarded damages, but they have already lost their property.

The sentence delivered by the Luxembourg court comes in response to a question posed by a mercantile court in Barcelona after an individual, who was evicted in 2011, took action against his ban, claiming an abusive clause in the mortgage contract. If the court declared this clause null and void, that would also make the eviction null and void. 

From Sur in English

More on this from El Confidencial: 'The Court of Justice of the European Union (CJEU) considers that the Spanish legislation governing eviction procedures violates European legislation for the protection of consumers.

The judgement of the European Court of Justice gives a green light to Spanish judges so that they can halt all those foreclosure proceedings in which they consider mortgages signed by the affected contain abusive clauses or conditions, such as extra interest on arrears or the premature payment of the loan. The ruling by the European Court will be directly applicable immediately.

What the Government failed to resolve so far with the 'code of good practice for banking' or with the suspension of evictions among the most vulnerable groups, can now be fixed with  justice from Europe'....

'Spain's Renta Corporacion filed for insolvency on Tuesday, the latest real estate company to struggle to make debt payments as a prolonged downturn hits business and prices.

Dozens of property companies have collapsed in Spain, where house prices have slumped around 40 percent from their peak, but until recently banks were willing to refinance corporate debt in hope of an economic upturn'...     From Reuters

The amount of information offered by the Community of Madrid in relation to Eurovegas is surprisingly scarce, according to the Public Ombudsman who has sent this conclusion to Ignacio González, President of Madrid and the hitherto quiet town of Alcorcón where the American casino operator Sheldon Adelson will invest 17 billion euros to build the biggest convention and leisure centre in the South of Europe. The Community of Madrid has always maintained that it cannot provide information on what is 'the mere expectation of a project of a private nature' and insists that the only one who can properly inform citizens is the promoter of the project: Las Vegas Sands.

The Ombudsman believes, however, that the Community of Madrid has given very incomplete answers when it has been questioned by various concerned citizen's groups, including the 'Plataforma Eurovegas No'. Indeed, as someone says: 'What happens in Alcorcón, stays in Alcorcón'...

Where to start with the Spanish property market? Millions of homes effectively repossessed by the banks, hundreds of ghost developments – half-built, filthy and awaiting the bulldozer – and buyers at the height at the middle of the decade nursing losses as high as 70 per cent. But there is another side to the Spanish market as Richard Way, editor of the Overseas Property Guide and a British expert on the Iberian market, explains.

"Most people think of Spain in terms of the lower end of the market where there was massive over-development and price collapse in parts. But at the top end, I am being told, things are now more buoyant with international buyers including the Russians and Chinese coming to market and stabilising prices at least," Mr Way says...    From 'Luxury rally could bring sunny days back to property in Spain' in The Independent. 

Business:

A straw poll on Monday in the left-wing Público asked '1. should you take all your money out of the bank, or 2. send it to Switzerland or 3. leave it alone (we are not Cyprus)', received the following vote:  1. 78%, 2. 14% and 3. 8%.

The Foreign Minister José Manuel García-Margallo met a group of senior executives from German companies with a presence in Spain last Friday 15th March to engage a new promotion for the 'Marca España' to be known as 'Friends of Spain' (who thinks these things up?). The idea is a 'virtual think-tank' made up of Germans and other foreigners involved with Spain, together with Spaniards, to strengthen the image of Spain abroad as a modern, vibrant and economically viable country and to promote confidence in Spain and her companies.     More at Cronicas de la Emigración

Politics:

José Luis Rodriguez Zapatero, Spain's previous president, has kept quiet since his departure from the Moncloa and the leadership of the PSOE. Now, as Alfredo Pérez Rubalcaba is under fierce pressure to either do something, or let someone else do it (to paraphrase a well known Spanish saying), Zapatero has come to his rescue by asking supporters to continue to stand behind the apparently inept party leader.

One of Spain's more colourful ministers is José Ignacio Wert, at the helm over at Education, Culture and Sports. The latest comments from Wert have once again attracted media attention. Spain is not a corrupt society, he said on Monday, and the perception to the contrary is very exaggerated. We must be as much or even more worried not by the continued reports of corruption which surface from time to time, as by the public perception that these cases are only the tip of the iceberg. 

Tax:

'FURIOUS EXPATS are mounting a rearguard action at the new law requiring the declaration of offshore assets describing the directive as the new Spanish Inquisition.

Harsh penalties await anyone failing to declare overseas holdings worth more than 50,000€ to the tax authorities – but even those who attempt to comply with the law by the deadline of 30th April could be hit with fines for unintentional errors in a complex reporting system. Fears are growing that the Hacienda is looking to milk a new ‘cash cow’ and Madrid is paving the way to increase taxes. After the problems of the notorious ‘land grab’ laws, the change has already been branded a ‘money grab’. A petition to the European Parliament is being prepared by groups questioning whether Spain’s new law – passed last November by Royal Decree – is in breach of the EU Charter of Fundamental Human Rights and the European Savings Directive by the possibility of paying additional taxes on income already taxed at source. And it is thought likely the Spanish law could face a court challenge for breaching bilateral treaties to avoid double taxation'...  More at The Round Town News

The Cyprus Bailout:

The 10 billion euro Cyprus bailout by the EU had supposed, in immediate terms for the public, the retention, or rather confiscation, of people's savings from their bank accounts. Last Saturday, the Government ordered the banks to hold back 10% of the money from major savers (and 6.75% from those with less than 100,000€ in their banks), thus taking in around 5,8 billion euros. This was later changed to 12.5% on savings over 100,000€ and a reduced 3% for smaller savers.

 Cypriot bank officials said depositors could access all their money except the amount set by the levy. The Finance Minister defended the decision to accept the levy, saying it was either that or a complete economic meltdown.

'This was the least worst option', he told state broadcaster CyBC. 'We battled to prevent the country from completely going bankrupt' he added.

Of course, the question of a 'corralito' happening in Spain is on everyone's mind here.       

'The Spanish Government considers that the European rescue of Cyprus is a 'good solution' that 'is not transferable to any other country', sources of the Ministry of Economy reported. 'It is a good agreement because it solves the problem in Cyprus', said the same sources, adding that it is 'a very clear demonstration of the stability and sustainability of the euro...' El Mundo reported on Sunday.

From a statement by the Eurogroup President Jeroen Dijsselbloem: '...I reiterate that the stability levy on deposits is a one-off measure. This measure will - together with the international financial support - be used to restore the viability of the Cypriot banking system and hence, safeguard financial stability in Cyprus'...

By Tuesday, the whole sorry story had collapsed into farce, with a vote on the plan in the Cypriot Parliament recording 36 against, 19 abstentions and none in favour. After an aborted attempt to borrow money from Russia, the Cypriot banking system was, by Wednesday, bordering on collapse.

The last chapter to date, had the Cypriot banks closed for public business until next Tuesday 26th March (Easter Week!), and freezing all savings, less some small amounts allowable from cash-points. Meanwhile, the 10 billion euro 'rescue' remains in the air. Perhaps the Russians will help.

One final point from Cyprus – according to Expansión, over 40% of money deposited in the banks is in accounts of over 500,000€ - often, apparently, held by Russians.

'...What would you do now if you had savings in a Greek, Spanish or Portuguese bank? Or an Italian bank? Or even a French bank? It's not as though you're getting any interest anyway. And now it turns out that, despite all the promises, your savings are vulnerable to arbitrary confiscation. In theory, the European Central Bank is ready to step in in the event of a panic by depositors. But its funds have already been heavily tapped. Italian banks now hold €281 billion in ECB loans, Spanish banks €278 billion. Huge as these numbers are, they are only a tiny proportion of the total banking sectors of those two countries: less than 8 per cent'... Daniel Hannan at The Telegraph

Various:

Standard and Poor's sees a high risk for countries such as Spain, Italy, Portugal or France to continue with necessary reforms since the unemployed are now less willing to accept austerity. So says the head of the Agency in Germany, Torsten Hinrichs, in an interview with the Neue Osnabrücker Zeitung newspaper.

'The high unemployment in Spain, Italy and France is socially explosive,' said Hinrichs. There has to be a consensus for solutions to the current crisis. High unemployment and a strong imbalance between the rich and the poor doesn't help'. In his opinion, the citizens of Spain and Portugal have shown to be willing to withstand the cuts for long enough, but this 'cannot continue forever'.  From Cinco Días.

Almost 100 bankers (listed here) from nine banks - Bankia, CAM, NCG Banco, Caja Madrid, Caixa Penedès, CCM, Banca Cívica, Caja Navarra and the Banco de Valencia are under currently under scrutiny by the courts for 'irregularities'. An article in Expansión says that the list could grow in the months to come.

'Método 3, the now-defunct private detective agency whose owner is facing his own investigation by a Barcelona judge, spied on dozens of government agencies, political parties, politicians, businessmen, media outlets and lawyers over the past 10 years, court records show. The private detectives used various methods to collect information for their clients, including newspaper clippings, data searches for work records and telephone numbers, even tailing people on certain occasions'... From El País in English

Electricity costs for domestic use are set to be reduced by 7% from April. A fall in demand, plus the growth of energy production from alternative sources especially wind and solar), have helped the fall in prices.

Medical tourism – They say that Spain's the place for that operation...   'A world-class health system, prices below the European average and temperatures above it: Spain has all the ingredients to establish itself as a leading international healthcare and medical tourism destination. But it has taken an unprecedented recession to finally prompt the country's private clinics to begin trying to attract wealthy foreign patients either willing to pay for cosmetic surgery out of their own pockets, or have medical insurance that covers treatment in other countries.

Medical tourism is worth around 75 billion euros worldwide, according to the Organisation for Economic Co-operation and Development (OECD), which describes the sector as one with 'further economic potential'. Tour operators, business leaders, private hospitals, and state health authorities all agree that Spain has what it takes to be a leading player'... 

Around 110,000 Spaniards moved abroad last year, according to an estimate from the Statistics Office (INE) – although it is not compulsory for expatriate Spaniards to register with their consulate. There are now around 1.9 million Spaniards living in foreign countries, says the INE.  Around 5.7 million foreigners live in Spain.

El Hierro, a small island in the Canaries, became the world's first 'Smart Island' on Monday with the installation of an island-wide free WiFi service.

Our favourite wine-tasting site is, without doubt, Catavino. As they say: 'Catavino’s well-researched and lively posts about Iberian wine regions make essential reading for any wine lover, especially those planning a wine tour to Spain or Portugal'.