Bad predictions
Over the past three years the Government and Bank of Spain have made a series of bad predictions on the likely economic development of Spain, to the point that few people are taking their new predictions seriously. In spring 2008, the Government denied a crisis was coming: “Crisis, what crisis?” In March that year the Bank of Spain predicted a 2.1% increase in the Spanish economy for 2009, and predicted maximum unemployment of 9.8%. However, the economy fell instead by 11.1% and unemployment reached 18%. Year on year the Government and the Bank have predicted the end of the crisis, an economic upswing and higher employment. Each year they have been wrong.
Easter Tourism income up 10%
This year tourists spent 10% more over Easter than last, with the most being spent in areas where traditional celebrations were performed. The Ministry of Tourism stressed that many foreign tourists were diverted to Spain by the unrest in Arab countries, and that the trend was particularly apparent with those from Germany, Italy, France and the Nordic countries.
Deficit down 20%
The State Deficit fell 20% to 6,900 million euros during the first quarter of the year, the result of increased tax payments and 24.2% lower expenditure. Income from IVA rose 5.4% and from income tax 2.4%, mainly on labour income. The new rules for the financing of the regional administrations also played an important role.
Spain is aiming to reach its goal of only a 6% deficit by the end of this year.
Spanish emigrating
14,108 Spaniards left the country during the 3 first months of the year, whilst 7,875 returned, a net emigration of 6,234 who were seeking work and a better future abroad. Over the same period, 101,610 immigrant workers came to Spain and 121,818 left.
Randstad, an employment agency, reports that 62% of unemployed Spaniards are prepared to emigrate to find work and that seventy three percent of Spanish architects are considering abandoning Spain, 66% of whom do not have a time limit for returning.
Non-payment increases
At the end of February, the percentage of non-payment of loans in the financial sector increased to 6.226% from 6.013 the previous month. 6.356% of loans advanced by banks were in default. The total unpaid sum rose from 110,072 million in January to 111,842 million in February. With the increase in the Euribor index and further increases anticipated during the year, we can expect another increase in non-payments.
Borrowing, borrowing…..
The Government has managed to find buyers for 3,537 million euros worth of bonds over 10 and 13 years, however, the interest rate offered was 5.483% for bonds over 10 years and 5.695% over 13 years; an increase on the rate offered in the last sale and dangerously close to the 6%, at which it is reckoned a country is ripe for a rescue package.
CAM downgraded
The rating agency Moody’s has reduced by two steps the long term debts of the Alicante saving bank CAM to Ba1 (considered as rubbish). The qualification is given under a “negative perspective” which can lead to further downgrades.
Building activity up in Europe, down in Spain
Activity in the building industry in Europe rose 3.5 in February, whilst it continued to fall in Spain, 31.3% down from one year ago. Germany noted an increase of 56.3% from last year and Poland was up 26.3%.
58.92% of companies not paying on time
An investigation shows that during the first quarter of this year 58.92% of Spanish companies did not pay their suppliers within the agreed time limit. The average delay in payments was 29 days, worse than the same period last year, when the delay amounted to 21 days. The worst sector is the public administration, with a delay of 40 days.
A SCANDAL THAT WONT GO AWAY
ROGER HELMER MEP has written the following on his blog www.rogerhelmer.com .
So often I come across problems in Europe which (as I like to say) “No one can explain; no one can justify; and no one can resolve”. Things like the “Travelling Circus” between Brux & Straz, or the Common Fisheries Policy, spring to mind.
But on Thursday in the Petitions Committee I came face-to-face with a problem which has been with us for a great number of years, and which causes far more personal anguish than the Travelling Circus or the CFP. It is the Spanish property issue, and it has brought me over the years many hundreds of letters and e-mails from people who have lost their homes in Spain, and frequently had to find more money to cover site clearance, rubble removal, or even the provision of utilities to the site for subsequent building projects. It sounds too bad to be true, but it is.
To be fair, we occasionally get similar stories from Portugal, or Cyprus, or Romania, or Croatia (this last not an EU member but an accession candidate). But the vast majority come from Spain. And though most of my correspondence comes from Brits, the same problems affect citizens from Germany, France, Scandinavia — and indeed Spanish nationals too.
A word of advice to anyone thinking of buying a property in Spain: don’t. And never, never, never buy off-plan (that is, a property not yet built). Don’t put down a deposit. Don’t even think about it.
There are two strands to the problem. One is the Spanish Coastal Law (the Ley des Costas), most notably affecting the development at Empuriabrava, where literally miles of water frontage and moorings in a marine property development are to be confiscated by the state, and then the owners offered an opportunity to rent back their own moorings at extortionate prices. The other is a more general problem, which seems to arise from collusion between corrupt developers, lawyers and local officials who manage to alter planning permission retrospectively, and require existing properties to be destroyed. Sometimes this is to make way for new, lucrative high-rise developments. Sometimes it seems to be done out of sheer devilment.
The English lady above is Helen Prior. She and her husband sold up in the UK and emigrated to Spain just days after they retired, buying a rather beautiful house in the Spanish style. I didn’t enquire, but I suspect that they invested the bulk of their assets in their retirement home. They started to enjoy their new life in the sun, until one day they received notice that their property rights were being reviewed by the court. Their house was ruled illegal and they were told it would have to come down. This was despite the fact that they had done everything by the book, they had employed local lawyers and due diligence, and believed they had a rock-solid claim to ownership. So far as the authorities were concerned, they were “foreigners living illegally”.
Mrs. Prior had brought a video which was shown in committee as she spoke. We saw their lovely two-storey home in the Spanish sunshine. Then we saw the bulldozers arrive and commence the demolition. We saw stacks of window frames removed by the demolition men. We saw the family leaving the house, and family members clinging to each other in tears as their dreams and their assets fell around them. This was one of the most moving and disturbing things I have seen in twelve years in the parliament. Mr. & Mrs. Prior now live in the garage of the former house: they have nowhere else to go.
When I came to speak, I said “Madame President: This is Groundhog Day. We have sat in this committee again and again, on many occasions, though none as moving as this, and we have heard grave discussions of the problem. We have asked questions and written to the Commission. We have heard the Commission wringing their hands and telling us there is nothing the can do about it. But the rule of law, the rights of property and enforceable contracts are at the heart of a free society and a free economy. Spain is not a country under the rule of law: this is bandit behaviour”. And more in the same vein.
The Commission insists that the “Charter of Fundamental Rights” within the Lisbon Treaty applies only to the operation of EU law, not national law, so there is nothing they can do. The Spanish behaviour is in breach of the Universal Declaration of Human Rights and the European Convention of Human Rights. In theory the plaintiffs could go to the European Court of Human Rights. They would probably win. But the cost is prohibitive, and pensioners might not live to see the day when a verdict was reached, given the years of delay.
We have discussed the possibility of setting up some kind of colloquium in Spain to try to resolve the problem, and I would back any measure with any hope of success. But I’m not optimistic. And meantime, Mrs. Prior goes back to her garage.
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