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Weekly Report

Business over Tapas (nº 280)

Business over Tapas (nº 280)

  • 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 30 de noviembre de 2018, 22:24h

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Editorial:

Theresa May says that Spain didn't get what it was after in Gibraltar, but, in sense, maybe it did. Spain wanted a new arrangement with the UK over the territory and specific mention of a bilateral agreement over its future status. The mid-term goal is for shared sovereignty (how that would work with a non-EU state is hard to fathom). It is of no matter that Spain’s claims were partially set aside, as evidently an independent UK, outside of the EU, won't have the same voice in EU affairs as hitherto, and a full border closure or other intemperate action by Spain (it's hard enough to cross already with just a Schengen immigration rule to negotiate) could expect full backing from the EU-27. Indeed, we see that Germany has already expressed its support for Spain over the Gibraltar issue.

Now, Madrid might not want to upset the surrounding towns and cities (La Línea, Algeciras, San Roque, Sotogrande and so on) and their working-folk, but that would be a political call rather than a pragmatic one. Meanwhile the British Government will not do much simply to save the 35,000 Gibraltarians (here) although it has acknowledged that things have become more difficult (here). Westminster has time and again shown that it doesn't care anything for its far-flung citizens like the large diaspora of expatriate Brits in the EU-27 – after all, no one appears to even know how many we are, give or take a few 100,000s here and there (contrast Adam Boulton on Sky News with his two million Brits in Europe here, The BBC quoting the UN with 1,200,000 here and the HMGov itself saying there are 784,900 Brits in the rest of the EU, for some reason less Ireland, here). All said, an article here makes an important point: ‘Spain has no legal, moral, historic or political rights over Gibraltar, whose rights to self-determination are paramount’. Well, historic, perhaps...

However, if it wasn’t for the inevitable bad press, it seems pretty clear that it is just the business, the military base and the real-estate that the British Establishment doesn't want to lose.

Oddly, Pedro Sánchez, who has evidently scored some points among the Spanish electorate, doesn’t have the support of the Partido Popular (usually so keen on grabbing Gibraltar) or Ciudadanos (famous for their defence of a Spanish Catalonia), but that of course is the grubby face of politics. As Matthew Bennett says in The Local, ‘...we effectively have London, Gibraltar and the Partido Popular versus the socialist government in Madrid, Berlin and the EU...’.

Logic aside (and what true statesman cares about the tranquil home-lives of a mere 35,000 people?), Gibraltar is no more crooked than Andorra, and it’s no more of a geopolitical oddity than Ceuta or Melilla, but those are battles for another day.

Housing:

Why do so many foreigners buy homes in Spain, asks El Boletín here. Apparently, because property is cheap. Well, that and the fact that there is plenty of room: ‘Empty Spain: three out of five municipalities are at risk of extinction’, says Público here. ‘More than 60% of the country’s municipalities have less than a thousand inhabitants and together they only account for 3.2% of the population’.

From The Times (Paywall) here: ‘Gangs are exploiting Spain’s high rents by breaking into empty properties in Madrid and Barcelona, changing the locks and selling the keys to squatters for €1,400, police have said. As the price of renting or buying flats has risen across the country, organised criminals have stepped in to take over empty properties and offer them at cut price. Homeowners who try to reclaim them are threatened with violence...’.

Press Release: ‘Members of the homeowner’s association, AUAN, who recently announced their intention to expand their activities across all of Andalucía, recently had a private meeting in Fines (Almería) with Pablo Casado, the leader of the Partido Popular, prior to an election rally in that town, to brief him on the issues affecting victims of the ‘illegal homes’ scandal in Spain.

The associations president, Maura Hillen, said “We are grateful to the PP for the opportunity to meet with such a senior political figure and we are grateful for the support of both the PP and Ciudadanos, at a regional level, for our cause but we are aware that there is still much work to be done”.

This is why we are expanding the association to a regional level. In the last decade, with a small base of supporters in the Almanzora Valley, we have helped to introduce national laws to offer increased protection to purchasers in good faith as well as regional legislation to provide a form of legal recognition to irregular properties via an AFO, a document that has allowed thousands of houses across Andalusia to be properly registered at the Land Registry and connected to services. Not to mention saving a few from the prospect of demolition. However, we are aware that many homeowners across Andalucía still remain trapped in a legal limbo whilst they wait for town plans to be approved and executed and we aim to unite the affected homeowners to do something about that”.

For more information on AUAN and its activities please contact info@almanzora-au.org or visit their website.

Tourism:

‘The new Murcia Region International Airport at Corvera will link up with twelve destinations in three European Union countries, the United Kingdom, Ireland and Belgium, from 15 January’, says La Verdad here. ‘The airport will connect with nine destinations in the United Kingdom, two in Belgium and one in Ireland, operated by airlines Ryanair, easyJet and TUIfly...’.

Seniors:

While Spain now claims a high life expectancy, health problems will start rather earlier, according to El Boletín here. ‘It's one thing to live long, it's another to live well. The latest report 'Health at a Glance: Europe' by the Organisation for Economic Co-operation and Development (OECD) reveals that Spaniards live free from limitations due to health problems for nearly 66 years. Far from the 83 years of life expectancy’.

From Bloomberg here: ‘These are the economies with the most (and least) efficient health care’. Spain is third (behind Hong Kong and Singapore). Norway is 11th, Ireland 13th, the Netherlands is 28th, the UK is 36th and Germany is 46th. The USA is 54th.

Finance:

‘The Bank of Spain has written off 42,017 million euros (so far) of the bank rescue carried out in 2009, noting that to date, just 4,477 million have been recovered’. Item from El País.

From Wolf Street comes a tale of greed: ‘Wall Street Mega-Landlord Blackstone Turns Screw on Spanish Government & Property Market. A lot of money is at stake’. The site notes that ‘...Blackstone alone has over 100,000 real estate assets in Spain that are controlled via dozens of companies. Those assets include a huge portfolio of impaired real estate assets, including defaulted mortgages and real estate-owned assets (REOs)...’.

China invests in Spain. From The Corner comes ‘Xi Jinping arrives in Spain with “major investment projects and trade agreements” under his arm. This week the President of China, Xi Jinping, was on an official visit to Spain. It is the first visit to Spain by a President of China for 13 years. According to the Ministry of Foreign Affairs, both countries will seek to advance the bilateral relationship in multiple areas, from bilateral political relations, geopolitics, economics and the educational-linguistic area to science, among others...’.

Politics:

The Tribune looks at Spain’s far-right here. ‘...“I’m not a racist or a fascist,” said the 62-year-old housewife who lives in a neighbourhood in the southern Spanish city of Murcia that has seen a significant community of migrants move in. “I’m just here to listen to what Vox has to say about how to make our city safer. No other politicians take an interest in how to defend our home”. Neglected, working-class suburbs and rural areas with high unemployment are where the euro-sceptic, anti-feminist and staunchly patriotic party is trying to enlist support that could lift it out of the shadows in a country that has been slow to embrace the extreme right...’. Ah, where have we read that before?

There could be a lot fewer voters in some towns in Spain following Brexit. The worry is that local town halls will think that, ‘if they can’t vote, we won’t spend any effort on them’. An article in La Opinión de Málaga looks at Alcaucín (with a Belgian mayor from the Ciudadanos party) and notes that fewer residents could mean less councillors for the municipality: ‘Alcaucín fears losing two councillors with the entry into force of the Brexit’.

Andalucía:

The Andalusian regional elections will be held this Sunday December 2nd, with the

PSOE-A as the undoubted winner. The likelihood is that Susana Díaz will need to pact with another party – either the left-wing Adelante Andalucía or the centre-right Ciudadanos. Meanwhile, the leader of the PP for Andalucía helpfully (and a trifle wistfully) says “it’s either going to be a Government for ‘Change’, or a ‘social-communist’ one” (El Mundo, here).

What is the so-called 'parallel administration' of the Regional Government of Andalucía, made up of an extensive network of public companies, foundations, agencies and bodies of all kinds, how many does it employ and how much does it cost? A partial answer comes from the ABC which says ‘The parallel administration of the Regional Government of Andalucía had a workforce of 23,899 employees in 2017. An unguarded report within the 2018 Budget has been the indiscreet source that has revealed what until now was reserved information, data impossible to collect that were hidden from unions (who have been asking for years), public opinion and even the PSOE partner, Ciudadanos, which made Susana Diaz president with the commitment that this chapter would be substantially slimmed down during the Legislature...’.

Corruption:

ElDiario.es says that the Government has accused Endesa and Naturgy of shutting down various power stations for spurious reasons to raise the price of electricity during the January 2017 cold snap. ‘The two companies had "stopped" a "striking" number of plants, which "caused prices to rise far beyond the usual," according to the Secretary of Energy’.

The foreign Minister Josep Borrell has been fined 30,000€ by the CNMV watchdog for selling some shares in Abengoa in November 2015, at a time just before the company fell, using ‘privileged information’ available to him as a board-member. The PP and Podemos are both calling for his resignation. 20 Minutos has the story here.

Courts:

The Bankia case. ‘The alleged manipulation of Bankia's accounts for its flotation on the Madrid stock market in 2011 has finally arrived at the high court – la Audiencia Nacional. After more than five years of instruction, about thirty directors and advisors are glumly sitting in the dock for alleged fraud of investors and false accounts, including the bank itself as a legal entity and, of course, its former president, Rodrigo Rato, who has been released for a few hours from his prison cell at Soto del Real where he was sentenced to drtve four and a half years for the 'black cards' from the Caja Madrid. Rato is facing another five years in this court hearing. El Confidencial has the story here.

Brexit:

There now seems to be three alternatives. One article on each:

‘Why Theresa May's Brexit Deal is terrible for the UK. The UK’s Prime Minister, Theresa May, has succeeded in what she set out to do. She has brought the country together. Politicians of all colours, along with their supporters, are at last in full agreement. They are united in their hatred of Mrs. May’s Brexit deal. And with reason. It is a terrible deal...’. More from Forbes here.

‘The European Commission has defended Tuesday before the Court of Justice of the European Union (CJEU) that a hypothetical revocation of the Brexit adventure would require the approval of all Member States and a unilateral will on the part of the United Kingdom would not be enough. On Tuesday, the CJEU held a hearing to analyse the preliminary ruling by the Scottish High Court on the possible reversibility of Article 50 of the EU Treaty. Under this article, the UK will leave the EU on 29 March 2019, two years after it formally requested it. The Treaty provides for the possibility of extending the exit date, but only as a result of a unanimous agreement from the member states, and the team of lawyers from the European Commission argued on Tuesday before the CJEU that any change in the present undertaking must have the approval of the other 27 member states of the EU bloc...’. From El Huff Post here. (That’s torn it!).

‘What to expect from a no-deal Brexit. The terrifying consequences if nothing is sorted’. An excerpt: ‘...The greatest worry in the medium term is that the rights that ex-pats in Britain and the rest of the EU would enjoy under the deal would be whittled away. France says that, legally speaking, all Britons living there after a no-deal Brexit would need work permits, and that employers with Britons lacking such permits on the payroll would be criminally liable. Its draft law covering a no-deal Brexit recalls the legal requirement for retirees and others to apply for long-stay visas. There are 190,000 Britons living in the EU who get the same access to health care as locals thanks to agreements a no-deal Brexit could end. Some, poor and elderly, would move back to Britain rather than pay for new insurance...' From a powerful article in The Economist here.

Media:

‘The tax on technology companies prepared by the government of Pedro Sánchez is a cause for concern in the media sector. The tax will be applied to "large international companies" that exceed 750 million euros in turnover worldwide and 3 million in Spain. The owner of El Mundo and Marca, Unidad Editorial, officially acknowledges its concern about the impact that the tax would have on its accounts, since, in principle, it would tax the part of their activity that is linked to the Internet...’. The owners of El País would also be affected by this tax, says VozPópuli here.

Cases of ‘manipulation and censorship’ have fallen precipitously at the RTVE, says VerTele here, following the departure of the PP from the control over the public broadcaster.

The Olive Press is rapidly zooming up the rankings. The paper says: ‘Our unique, original and in-depth reporting of life and news in Spain has sent us into the stratosphere. After a month where we had nearly 1 million hits and over 600,000 visitors, we have shot into the top 10,000 most popular websites in Spain. According to Amazon’s Alexa.com, the site is ranked at an incredible 9,079th place out of more than 2 million websites in Spain...’. It adds, ‘We have leapfrogged all our rivals such as The Local and Sur in English...’.

From Público here: ‘Can the centre of Madrid be compared to the infamous Warsaw ghetto in a newspaper column in a national newspaper? It would seem so. This is the question asked by a tweeter after reading the article written by journalist Carmen Rigalt and published by El Mundo this Wednesday in which the closing of traffic in the centre of Madrid is contrasted with the Warsaw ghetto’. ¡Ay, the right-wing press!

Ecology:

The PP are proposing in their election bid in Andalucía to build a motorway across the Parque de Doñana to connect Huelva to Cádiz.

Various:

Following news that the High Court has annulled the statutes of the Sex Workers Union. The president of the Union of Prostitutes says: "The same politicians who want to veto us are going whoring in their spare time.". LibreMercado has the story here.

‘Local councils on the Costa del Sol are well aware that large numbers of foreign residents still haven't found their way to their local Oficina de Empadronamiento to join the population census or Padrón. Some citizens, especially from EU countries, suspect that the local council might submit their data to the Spanish taxman, and therefore prefer not to register officially at their Spanish residence...’. A useful article from Sur in English here.

‘Curious yellow: An ultra-light pavilion set to promote Spain at the next world EXPO’. Item from The Olive Press here.

From The Local here: ‘The quirky habits you can't help picking up living in Spain’.

See Spain:

There’s a tiny village with just twenty-four inhabitants called Daroca de Rioja. It’s about twenty kilometres from Logroño. The village is quite famous though, because there’s a one-star Michelin restaurant called the Venta Moncalvillo. The story at La Vanguardia here.

Letters:

Dear Lenox, Your recent piece from Property Investor Today says: ‘The number of British expats living in Spain has dropped by 40%, according to Spanish newspaper El País. What’s more, between 2012 and 2017, the number of Britons leaving Spain outstripped those who arrived. This exodus is being blamed on the uncertainty caused by Brexit, and worries over what will happen once the UK has officially left the European Union, as well as the price of sterling falling against the euro, which has made living overseas more expensive than ever...’.

Back in 2012 nobody spoke of Brexit. This exodus, as reported, was/is almost certainly directly linked to the infamous 720 asset declaration form. According to our 1800+ mailing list, we observe more Germans leaving during the last two or three years than Brits.

JD

Many thanks to all of you who wrote to me with those birthday wishes (although, oddly, I never got one from the EWN).

Un abrazo,

Lenox

Finally:

A video examines Spanish names that came originally from the Arabic on YouTube here.

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