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Business Over Tapas (24th Enero-14)

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] - Note: Underlined words or phrases are links to the Internet. Right click and press 'Control' on your keyboard to access.

Editorial:

This week we have several statistical notes hitting the headlines. The first one says that the richest 20 Spaniards have as much income as the poorest 20 million of their countrymen. An international version of this jaw-dropper says that the wealthiest eighty five people in the world are worth the same (financially speaking) as the poorer half of the entire planet. Disraeli once talked of lies, damned lies and statistics, and he could have been talking about the Spanish property market where figures are available to suit every opinion, every taste.

But back to finance. Here in Spain we have a statistics institute which likes to be accurate, if occasionally improbably so, down to the last decimal point. The INE will from November be recalibrating the Spanish GNP upwards to add prostitution, drugs and any other black-market activity which they can come up with to swell the size of the economy (third item in 'Finance', below). Well, yes, in a sense...
Housing:

'After successfully selling 9,000 properties worth 700 million euros last year, Sareb, the company in charge of disposing of the real estate assets of the rescued banks, expects to complete the construction of about 3,000 homes this year.

The company’s president, Belén Romana, has identified about 130 developments, comprising a total of around 3,000 homes, which would be easier to sell and at a better price, if they were finished...' More on this from Kyero.

'With average house prices across Spain now close to the same level they were a decade ago, the jury is still out on whether the property market is still suffering or slowly recovering.

According to Spain’s Ministry of Public Works, house prices nationwide have fallen by 29% from their all-time high, making today’s average per-square-metre price for homes, currently around 1.500€/m2, about the same as back in 2004. Other sources estimate the drop to be as much as 50% since the bubble burst in 2008, leading many to wonder how much lower they can go...' From The Olive Press in the article 'Is the Bottom Behind Us?'.

El Mundo is more sanguine: 'As has been pointed out in recent months in several national statistics, something is beginning to move in the housing market. The National Institute of statistics (INE) and the Ministry of Public Works, among others, have spoken of timid rises in house prices. These increases have also been noted in Europe. According to the Community Statistical Office, Eurostat, The price of Spanish housing recorded in the third quarter of 2013 an increase of 0.8% compared to the previous three months. This slight increase is the first rise of the indicator since the second quarter of 2010'... The article backs off rather from this jubilation with some other news, '… the inter-annual adjustment in house-prices (September figures) was -6.4%, the third largest fall across the EU'. 

El Mundo kindly lists some remarkably cheap bank-owned homes on offer in various dormitory towns across Spain (example: Dolores in Alicante, near Elche. New apartments belonging to the BBVA, lift and swimming pool, one beds and two beds, between 27,000 and 43,000€. Gulp!). An article? Not quite.

For those who can still (?) get the BBC One on their TVs, 'Inside Out East' on 27 January:

'David Whiteley travels to Andalucia to find out why homes owned by people from the East lie in ruins. One Suffolk couple tell the story of how they have lost thousands. David finds out from the Spanish authorities if there is an end in sight to the legal battle that has dragged on for years' (To feature Barranco de los Pinos, Zurgena).

Tourism:

From The Local: 'Spain announced on Tuesday it has retaken the number three spot in world tourism in 2013, overtaking China by luring a record 60.6 million international visitors. Foreign tourist arrivals surged by 5.6 percent in the year, the government said, boosting the euro-zone's fourth largest economy after a long, job-wrecking recession.

"The new figures for 2013 allow our country to retake the number three position in this indicator after having overtaken China," Prime Minister Mariano Rajoy boasted...'.

FITUR, the international tourism show in Madrid, started on Wednesday and will run through Sunday (the weekend only, is open to the public). Think of almost 9,000 companies, resorts, cities and agencies all under 54,000m2 of roof. The fair will bring (say the organisers) 180 million euros and 200,000 visitors to Madrid.

Finance:

Following his recent trip to America, Mariano Rajoy returned home with the commitment from two large international companies to be setting up in Spain in the coming months. The Secretary of State for Trade, Jaime Garcia-Legaz, announced at the Spain Investors Day Forum, that a large technology company and one of the commercial distribution giant have invested for the first time in Spain in 2014. The two companies who are investing heavily in the Spanish economy are Costco distribution company and the technological giant UST Global...'.

Costco will be setting up twelve giant megastores in Spain, beginning with one in Seville and another in Madrid. UST Global, meanwhile, 'specialises in Healthcare, Retail & Consumer Goods, Banking & Financial Services, Media & Entertainment, Insurance, Transportation & Logistics and Manufacturing & Utilities'. The article, appearing in the AECOC Journal, ends with:  'A recent study by Deloitte estimates that this year 40 billion euros of direct foreign investment will arrive in this country, an unprecedented amount which consolidates the attraction of Spain'.

Iberian Partners, which exclusively manufacture Coca Cola products in Spain, are to close down four bottling plants with the loss of 750 jobs, according to El Economista.

'The Spanish economy will officially be some 20,000 million euros larger this autumn. This increase will not however be motivated by any economic recovery and reforms imposed by the troika. Its origin will be a change in the statistical methodology that is applied to measure the gross national product and which from October will take two unique changes.

The most shocking is, without doubt, the incorporation of the 'illegal economy' as part of the economic activity. The National Institute of Statistics will begin to estimate how much money is being spent on economic transactions of activities such as prostitution, drug trafficking and smuggling...'. The second change will be a reappraisal in the value of scientific research. Remarkable accounting techniques found in an article in El Diario. 

From a left-wing blog called South of Watford: 'Spain is in a dire economic situation. If you look at the economic data and especially at the unemployment figures you would think such a conclusion is beyond doubt. All of which makes it so strange to read frequent media reports, from inside and outside the country, which present a radically different picture. These reports talk of a country which has turned the corner and faces a bright future following a difficult period of implementing much needed structural reforms. It's bullshit. Bullshit based on highly selective cherry picking of data and misrepresenting the history of the crisis...'. 

Corruption:

The UGT-A, the leading Andalucia workers' union, has been in heavy weather recently for passing dodgy facturas to the Junta de Andalucía, which has paid them more or less without trouble, until investigative journalists at El Mundo became interested. The latest headline:  'UGT spent 421 euros in material and invoiced the Junta with 91,102 euros'.

Tax:

'All the major US technology groups continue to dodge the Spanish tax-man. The fiscal engineering tactics developed by their advisers allow them to pay hardly any tax on their business operations in Spain. Financial data for the main Spanish affiliates of Google, Apple, Amazon, Facebook, Yahoo, eBay and Microsoft show that their joint provisions for tax on profits in 2012 — the last year for which figures are available — was just 1,251,608 euros. That’s to say: 1.2 million in taxes among seven giants of the industry...' From El País.

'The new rise in social contributions by the self-employed and companies approved by the Government last month has reopened the debate on the high taxation for workers in Spain, despite having one of the highest unemployment rates in the world. Despite having a current level of contribution which is just about the highest in industrial nations – equivalent to more than 30% of gross salary, this new increase means a minimum of 1% more, thereby further increasing labour costs...' . From Libre Mercado. There's a comparison of tax-rates in a graph within the article.

'Hacienda is considering raising the IVA from 21% to 23% which, if nothing else, should do wonders for the sale of calculators (I can do it in my head). I remember when it was 15% not so long ago, but that was before our high speed trains and other trappings of modernity. The European IVA average is apparently a cool 21.3%: in the USA, the average 'sales tax' is 9.6%'. From The Entertainer Online. 

'In a communication issued a month ago by Hacienda to the self-employed, 'autónomos' are notified that from the 1st January 2014, IVA returns must not be submitted on printed paper, but rather by using the Internet, with the sole exception of Modelo 390, where one can still issue a 'Pre-declaracion by SMS'. Fines of up to 1,500 euros for those who do not declare their IVA by internet...'. From No Estamos Parados. The site tells you how to declare over the Internet.

Politics:

The Catalonian Parlament has agreed to formally ask the Spanish Government for the right to hold a referendum on independence on November 9th. They were supported by three maverick votes from the PSC (Catalonian PSOE). They will be told 'no'. See El Mundo.

In a rare interview, Mariano Rajoy spoke on Antena 3 radio on various topics earlier this week. Highlights: he may consider watering down the severe abortion law to be introduced soon; Catalonia will never be independent; in the Spanish economy the 'worst is now over'; 'things will be fine 'for the Princess Cristina (due to make a court appearance in early February); and finally, Rajoy is not considering any changes in his ministers.

Mariano Rajoy and his Government don't like the line taken by the right-wing El Mundo. According to El Diario, the institutional advertising (which keeps so many titles afloat) has been repeatedly cut and the Government is actively plotting the departure of the newspaper's editor, the colourful Pedro J. Ramírez.

Reuters reports PSOE primaries for November: 'Spain's opposition Socialist party announced on Saturday that it would select a leader in November to run against the ruling centre-right People's Party in 2015 parliamentary elections.

The contest will be Spain's first open-door primary by a major party, meaning that any citizen will be able to vote. That marks a shift from the past when the Socialist party alone chose its leader. "We are opening a new chapter in Spanish politics," said Socialist leader Alfredo Perez Rubalcaba, 62, at a party event on Saturday. "We will celebrate an open primary where all citizens can choose our candidate for the 2015 elections."...'

Fines:

Fines from the traffic department are posted in a regional ‘bulletin’, and the official traffic department website can be used to search for your number plate here (clicking Acceso a TESTRA sin Certificado Digital). I have also found a general site called ¿Tienes Multas? Which provides information about traffic fines in the system. The site will even provide an automatic alert for future traffic fines!

White Elephants:

The Huesca airport has beat its own record, says the ABC, with a daily average of less than one passenger. This ludicrous airport (which cost 40 million euros to build in 2006) had only 273 passengers in 2013. Albacete was not much better, with 1,211 passengers last year.

Various:

'Spain’s conservative Popular Party, led by Prime Minister Mariano Rajoy, is pushing a bill that would restrict reproductive rights so severely that many women would be forced to travel abroad to seek abortions or turn to illegal and risky procedures. The bill would allow abortion only in the case of rape or grave danger to the health of the mother as determined by two independent medical professionals. Minors who seek abortions would need parental approval. Foetal abnormalities would no longer qualify as a reason to terminate a pregnancy. If the bill is passed, Spain will become the first member of the European Union to retreat from a decades-long trend toward safe and legal abortion...'. Part of a recent editorial from The New York Times.

Getting sick, best to stay away from the UK, says The Telegraph: 'Increasingly, expatriates are happy to have medical treatment in their adopted countries rather than return to Britain. International medical insurance companies confirm the trend, despite the appeal of having loved-ones nearby and not having any language issues.

This is hardly surprising given the recent bleak record of medicine in Britain, particularly within the state sector. With the horrors of the Mid Staffordshire "care void", reportedly killing thousands of patients, still fresh in the mind, it's easy to overlook a raft of similar scandals'...

From The European Union: A practical guide on the 'Habitual Residence Test' to help Member States apply EU rules on the coordination of social security for EU citizens that have moved to another Member State has been published by the European Commission.

The guide, drafted in cooperation with Member States, clarifies the separate concepts of ‘habitual residence’ and ‘temporary residence’ or ‘stay’. These definitions, laid down in EU law (Regulation EC/883/2004 as last amended by Regulation EU/465/2012), are necessary to establish which Member State is responsible for the provision of social security benefits to EU citizens moving between Member States.

'Spain lost nearly 200,000 registered foreign residents in 2012 as the country's economic crisis continued to bite, official figures released on Friday show. The new figures from Spain's National Statistics Institute (INE) highlight the continuing fall in the number of registered foreign residents in Spain. According to the data, there were 190,020 fewer foreigners registered with Spain's local town halls on January 1st 2013 than on the same date a year earlier.

While these figures fail to take into account the huge number of foreigners in Spain who fail to register on their local civil register (padrón), the decline suggests many people are leaving because of the country's economic crisis'... From The Local.

POLL: Have you decided to spend less time in Spain because of the new tax declaration of overseas assets? (With many and interesting comments). Found at Eye on Spain.

On the other hand, Expatica shows how to apply for Spanish Citizenship here.

A map showing the 272 regions of the European Union is just one of twelve maps 'to better understand the EU'. Here at Geografía Infinita.

A new book available from Amazon on Kindle seems interesting: it's called 'Eternal Spain: Corruption and Crisis' and is written by Dr Trish Watson. The blurb begins: 'This is a book about the shadow of Franco’s dictatorship lingering over democratic Spain, fostering a climate of rampant corruption and sleaze, particularly in politics and the public sector'...

So, what happened to the family of Francisco Franco? David Jackson tells all.

Spain's future copyright laws are criticised by The Hollywood Reporter as not being strong enough. - 'Despite desperate pleas from the content rights holders for a new legislative framework to fight Spain's unbridled piracy, no one from the sector is pleased with the proposed legislation'... Later in the one-sided arguments offered in the article, we read: 'The rights holders have a strong ally in the U.S. Ambassador to Spain, James Costos, whose role as an HBO executive has made him particularly outspoken on piracy in Spain...'.

For those who like to know about Spain's flora and fauna, Iberianature is the leading English-language online source of information on the nature, geography and history of Spain. Here

Here's a good blog post about Spanish customs: 'The aperitivo is more than just a warm-up for lunch in Spain'. Found at Vaya Madrid. Indeed, '...It’s not a food or a drink… it’s a happening, a concept, and I don’t know any other country that practices it. That’s what makes it so elusive to the translator and yet so alluring to the foodie...'.

Finally:

Amazing photographs with something to say about Southern European stereotypes: 'The more Spanish photographer Carlos Spottorno saw in the business media about the plight of Portugal, Italy, Greece, and Spain, known as “the PIGS,” the more frustrated he became. Facing financial crisis, those countries, he felt, were being treated as second-class citizens within the European Union. Spottorno decided to begin a photography project that had a documentary style but was really more interpretive, a way of illustrating the stereotypes—laziness, corruption, the inability to keep up with their more sophisticated northern neighbours, among others—he read in the press, translated through his images...'. See Slate.

 

 

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