Weekly Report

Business over Tapas (Nº 274)

Business over Tapas (Nº 274)

  • A digest of this week's Spanish financial, political and social news aimed primarily at Foreign Property Owners: With Lenox Napier and Andrew Brociner. Consultant: José Antonio Sierra

viernes 19 de octubre de 2018, 19:49h

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Some exciting news this week – potentially – as the two main parties of the left agree over the details of next year’s budget. So far, the PNV regionalist party has agreed to support the plan. El País in English leads with ‘Spain’s PM and Podemos leader sign deal for biggest wage hike in 40 years’. Well, yes, that’s certainly a part of the deal. Spain’s minimum wage would go up from 736€ a month to 900€ (France, by contrast, is 1500€). A meme on Facebook says ‘900€? I’ll be able to realise my life’s ambition of eating an avocado’. Funny, because, avocados are a bit overrated, and funny too, because with 736 euros, or even 900 euros, one still isn’t exactly wealthy.

How many people working – at least in the orbit of us wealthy foreign residents (er, mostly) – earn 736€ a month for a full-time job? Not many, we hope. Fruit packers and some other agricultural jobs… cleaners perhaps…? It’s a slave wage certainly and we shouldn’t worry too much about the lowest paid sending their money off to Offshore Tax Paradises.

Not everyone agrees. The two main opposition parties think that raising the minimum wage is a bad idea. Albert Rivera from Ciudadanos (4,800€ a month) and Pablo Casado (5,700€ a month) are both against the idea (although Rivera was campaigning for 1,000€ per month not so long ago). El País again: ‘...The CEOE employers’ association has already talked about “the negative effects” of such a move on collective bargaining, wages and the economy in general. If implemented, it would be the biggest rise in 40 years...’.

There is much more in the budget that the raising of the minimum wage, and the availability of avocados.

However, and who knows – it could even make sense – as the figures are balanced here.

Top-earners, those who earn more than 130,000€ a year, can expect a rise in their income tax and ‘large fortunes’ would pay more tax as well. Rents would be controlled in certain cases. As El Huff Post says - ‘...While the Partido Popular, Ciudadanos and Vox are fighting for the same ground on the right, the PSOE and Podemos are laying the foundations of an agreement that behind the numbers hides the principle of a close and lasting collaboration in the medium and long term...’. From Valencia Plaza comes a note on another useful subject: ‘...under the heading "Health is a universal right and not a business", the signatories of the pact argue that "The excuse of the economic crisis has been used to weaken public health and encourage its progressive privatization, which is why it is still necessary to shield our health system against privatization flows and attacks by interested sectors.”...’. Furthermore, and again quoting Valencia Plaza, ‘...the Government and Unidos Podemos have also agreed to reform the ‘stamps’ system of self-employed workers to link it to their real income, guaranteeing that those with lower incomes pay a lower contribution...’. El Huff Post has a full list of the accords here.
But the success of the socially progressive budget plan depends on uncertain support from the Catalan separatists who understandably ‘...request the Prosecutor's Office to withdraw the charges against their imprisoned and exiled leaders to support the General Budget. The government view on this is that such a solution is impossible given the separation of powers in force in Spain’, and, secondly, on the approval of the EU. To thwart this second condition, the PP leader Pablo Casado has flown to Brussels to put his oar in the deal, much to the amazement of his fellow Spaniards...

If all goes according tp plan, the budgets should finally be approved in February or March.


From Mark Stücklin’s Spanish Property Insight: ‘The latest press releases indicate that prices in Spain have risen by more than 10% in a year for the first time since 2007. Is this a time for celebration or concern, both at the statistic and how it was calculated?’


‘When is a hotel not a hotel? When it's a bubble, a cave or a castle, naturally. Or perhaps a prison. Even though our priorities when picking a place to stay are usually along the themes of free wifi, central location, decent room service, and so on, a hotel doesn't have to be just a bed for the night, however luxurious. If you want to add a touch of quirkiness to your holiday that the usual chains can't offer, Spain has a whole catalogue of options ranging from 'just wow' to just plain weird...’. From Think Spain here.

Airbnb slashes its Andalucia properties by 18,000. Since October 1st, Airbnb has removed 18,000 unregistered holiday rental properties from it’s site. This is in line with the Law in Spain and follows the well publicised court hearing which subjected these rental portals to multi million fines if they broke the law. If you are the owner of an unregistered holiday property, it is now impossible to promote the property on any of the giants such as Booking,com or Airbnb or Spain-Holiday..’. Based on an article in the Diario Sur and taken from a commercial site called CP Spain (email here) which can help with registering.


‘The Government and Unidos Podemos have agreed to reform the system of monthly contributions by self-employed workers (autónomos) in 2019 to link it to their real income, guaranteeing those with lower incomes a lower contribution’. Item from El Confidencial here.

The new 3% tax on major cyber-business - Amazon, Google, Airbnb and so on - worth some 800 million to Hacienda, won’t include traditional companies with major online presence. Like Spanish banks, El Corte Inglés or Ortega’s Inditex and so on. El Páis has more here.

What’s the average income in your municipality – do you live in a poor or rich community? Find out at the interactive link at El País here.

Non-Resident Imputed Income Tax examined at Spanish Property Insight here.


‘Rajoy gives his first interview following his departure from politics, to a group of young people in Quito: "I was thrown out by the extreme left", he says. Rajoy was opening the school year of the university network in the capital of Ecuador last week where he spoke with a group of students’. Item from La Información here.

eldiario.es considers the rivalry (and forced partnership) between the Partido Popular and Ciudadanos here.

A new British ambassador for Spain, says HMGov here. ‘Hugh Elliott has been named the new ambassador of His Majesty the Queen in Spain and non-resident ambassador to Andorra, a position he will assume during the summer of 2019 replacing Simon Manley...’.


From El Español here: ‘Prosecutors are inclined to request 25 years in prison for Oriol Junqueras and more than 15 for five other counsellors. The preliminary draft plans to accuse them of aggravated rebellion for the use of public funds. They do not contemplate including sedition as an alternative. "It would be to open ourselves to political pressures," they say..’.

‘Revealed: The Run on Banks in Catalonia after the Independence Vote was Fomented by Madrid. The clandestine role of the Spanish government in a run on deposits that drained €29 billion from Catalan banks’. The story at Wolf Street here.


According to ABC Sevilla, certain other departments of the Junta de Andalucía have been found to have improperly distributed more than 3,500 million euros using the "ERE method". ‘Judge Pilar Ordóñez has given the Andalusian Government just 45 days to send all information on all transfers to the IDEA agency for the twelve year period under investigation. The Seville judge has promoted a criminal case for alleged corruption in the Junta de Andalucía with an economic dimension that may be even greater than the figures currently quoted in the ERE case (855 million euros). The judge is investigating if other departments of the socialist government used for twelve years (2000-2011) the same fraudulent system of the ERE case between the years 2000 – 2011 to feed funds to the agency IFA / IDEA and to elude the proper controls at the time of spending...’. The Andalusian elections are, a trifle inconveniently, also coming up on December 2nd.


Four hundred dossiers of Commissioner Villarejo threaten the political, business and judicial elite’, says eldiario.es here. ‘The National Institute of Cybersecurity has been ordered to decrypt the files baptized by the commissioner with allusions to his clients. The National Court has opened a separate piece for each dossier with indications of the crime to which it has been able to access until now’. The juicy files include such names as ‘King, Iron, Land, Pit, Carol, Painter and Big’. A bit more on the Comisario at El Confidencial here: ‘Gold ingots, 300,000€ in cash and blank passports: Villarejo's hidden attic safe. The Internal Affairs unit found a whole booty hidden in one of the jewels of the supposed real estate empire run by the commissioner in Estepona’.

"Visas de oro": the countries of the European Union that sell residences and passports to criminals’, says El Clarín (Argentina). ‘It is a business worth about 25,000 million euros’.

‘The foreign minister, Josep Borrell, had ordered to sell shares of Abengoa, held by his wife, at the critical moment of the company and with privileged information. The National Securities Market Commission (CNMV) confirmed on Wednesday last week that it has fined the minister for ordering the sale of 9,030 euros in titles "of a person from his immediate surroundings" in November 2015 "with relevant information that had not yet been published" . Abengoa filed for bankruptcy on the 25th of that month and during that period the shares fell by 65%. Borrell has been on the verge of getting rid of his sanction becoming public thanks to an urgent legal reform from the Government in force since the beginning of this month based on a European directive of 2014 allows the CNMV to hide cases when the damage to the person is going to be "disproportionate"...’ According to El Confidencial, Borrell ‘received 300,000 euros per year for his place on the board of Abengoa, which he joined in 2009’.

The Minister for Hacienda María Jesús Montero – a powerful figure from the PSOE-A (Andalucía) - also appears to have enjoyed a meteoric rise to power. Here at El Español she is charged with nepotism. Maybe we need a new system…


‘An historic victory over a timeshare firm in Spain as British couple win €365,000 against La Pinta Beach Club in Tenerife after having to remortgage their home in the UK and losing most of their life savings through dodgy contracts’, says The Olive Press here.


The weather forecasters warn of the worst gota fría in the past ten years from today, Thursday. The episode, with up to 180 litres per square meter in 12 hours, will affect Catalonia, Aragon, Valencia, Andalucía, the Balearic Islands and Murcia through Sunday.


‘One of Spain's most famous paintings, the dramatic and bleak artwork known as 'Guernica' and painted by Pablo Picasso, has an interesting history. For one thing, it was painted two months before the attack on the Basque city of Guernica by the Condor Squadron in April 1937...’. From Spanish Shilling here.

From The Atlantic here: ‘The Politics of a Long-Dead Dictator Still Haunt Spain. The debate over exhuming Francisco Franco reveals a country still divided over his legacy—and what Spain’s bloody civil war means today’.

‘Spanish Congress to debate euthanasia bill. The government wants to make it legal for terminally ill patients to end their lives but faces opposition from conservatives’. Item found at El País in English here.

The vet’s bill should be a little cheaper now, as his IVA has fallen from 21 to 10%.

‘The hotel Barceló Renacimiento Sevilla has fired all of its room-cleaning staff who were only being paid €1.50 per cleaned room after a Government Labour Inspection requested by them confirmed poor working conditions and labour exploitation - Now they ask to be rehired with Proper Working Conditions’. Item at La Voz del Sur via Reddit here.

See Spain:

From Atlas Obscura comes ‘Carrascal del Río, Segovia. The Hermitage of Saint Fructus. Medieval ruins nestled within a breathtaking swath of Spanish nature’.

‘Six Andalusian villages officially among Spain’s prettiest: how many have you visited?

These beauty spots are included for their history, architecture and culture and show that Andalucía really does have it all’, says The Olive Press here.


Britain, why don’t you stay? Silly song on YouTube here.

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