The moderate Catalan nationalists CiU have the third biggest group in Parliament, with 16 representatives, elected by a million votes, while leftist federation IU went from 1 representative in the present Parliament, to 11 in the incoming. The more than 1.6 million votes of the federation have certainly come, to some extent, from the groups of ‘indignated’.
Almost all provinces blue
Partido Popular won more votes than any other party in almost all provinces of Spain, the exceptions being in Guipuzcoa (Basque territory) where the new ETA-influenced party Aiamur received more than 34% of the vote; in another Basque province, Vizcaya, where the moderate nationalists in PNV won more than 32% of the votes; in the Catalan provinces of Tarragona, Lerida and Girona, where the moderate nationalists in CiU dominated; in Barcelona Province where the socialists were barely ahead of the nationalists; and finally in Seville, where the socialists managed to defend their southern stronghold.
Andalusia lost
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- 33 of the Andalusia seats went this time to the PP, with only 25 to the socialists, whilst IU won 2 representatives.
On the Balearic Islands PP won 5 deputies with 49.53% of the popular vote, against 3 for PSOE with only 28.86%.
In the Canaries, PP won 9 seats, PSOE only 4, with the last 2 seats going to a coalition of nationalist parties.
The Valencia Region gave Mariano Rajoy 20 seats in the Parliament, against only 10 for the socialists.
Murcia elected 8 deputies from PP with just 2 to the socialists.
For further information on the elections, see the article ‘Before the elections – after the elections’
Service sector down 41.8 points
The Markit index, of the marketing leaders, shows that turnover in the service sector fell 41.8 points in October compared with same month last year. This is the fourth consecutive month with reductions in the sector.
Andalusia downgraded
Rating Agency Standard & Poor’s has downgraded the debts of the Andalusia Region from AA- to A+, with negative perspective. The agency points to a budget deficit of 1.5% over that permitted by the national Government.
Wind energy sets new record
At 2 o’clock on Sunday 6th November the input from wind energy reached an historic record with a contribution of 59.6% of total demand. Even if this record is a momentary picture, it shows that the wind power is winning ground over gas (32% of total energy supply, and nuclear power, 26%). Wind now has the potential to generate 21,000 megawatts energy.
Inaki Urdangarin investigated for corruption
Famous handball player Inaki Urdangarin, married to the daughter of the King, Princess Cristina, is being investigated suspected of the embezzlement of public funds and falsification of documents in connection with the activities his Instituto Noos, a Foundation dedicated to the sport’s sector on Mallorca.
Bankinter: Property market in desert for another 2 years
In a resent study, Bankinter finds that the property market will continue its wanderings in the desert for another 2 years, due to ‘a weak demand, slow sale of existing stock, no increase in buying interest and the continuous fall in prices.’
The bank hopes the trend will change in 2013, so that the economy will be able to generate new jobs, and thus create demand for dwellings from 2014.
0% growth in third quarter confirmed
The National Office of Statistic has officially confirmed a 0% growth for Spain in the third quarter, but the office admitted in a foot note that the basis for their calculations has been changed!
National demand has fallen 1.9% over same quarter last year, employment fell 1.9% the construction sector over 2% and industrial sector over 0.8%.
Crisis, but more public employees
The politicians are not following their own recommendations for austerity. According to the Bank of Spain both the national government and the regional ones, as well as the Social Security System, have more employees than a year ago. In Central Administration there were 546,000 employees in the third sector, 11,000 more than at the same time last year. The 17 regional administrations had 1,808,000 employees, up from 1,769,000 last year. In Social Security there are 40,000 employed against 36,000 last year.
Only the municipalities have managed to reduce staff (no more money in the kitty) managing with only 671,000 employees, 12,000 less than last year, BUT, how many have been shifted over to one of the numerous municipal companies?
Association blocks 101 evictions
The Association of people affected by evictions from their dwellings in Catalonia, supported by the courageous ‘indignated’ has been able to block 101 evictions by means of ‘occupying’ the dwellings of owners in danger. Also, the Association has gained collaboration from certain town halls which have taken firm stands against the eviction of their citizens.
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- In Spain are a total of 3.4 million empty dwellings.
Swedish school in Orihuela ‘illegal’
The Swedish school in Orihuela (Alicante) has been declared illegal by the town hall because it has no opening licence and does not comply with security and hygiene regulations. The school with 70 pupils aged between 6 and 12 years has been open since 2001 in the urbanisation Luna II El Horizonte.
The crisis this week:
The leader of the Greek conservative party, Antonis Samaras, has refused to sign the agreement between Greece and the EU, ECB and IMF. The EU has on its side has refused to pay the next instalment on the first rescue package without the signature
Private bondholders are refusing to accept the ‘hair cut’ of 50%, as they have taken out insurance in the form of Credit Default Swaps
Moody’s have published a stern report on the French economy, which may lead to a downgrading of the country
Thursday last week, Spain sold 3,563 million euros worth of 10 years bonds, but had to pay a record interest rate of 7%, that is 30% more than the last sale of this type. Spain is now paying higher interest on their three-month bills than Greece and Italy
ECB (European Central Bank) last week massively bought Italian and Spanish bonds, but did not manage to stop the increases in Country risk and interest payments. Spain reached a record country risk of 460 points, with interest on their bonds of 6.41%
The International Monetary Fund (FMI) has created a new credit line to combat the debt crisis, where Spain can call on 117,477 million euros, at 4% interest
The victory of PP in the elections on Sunday did not calm the markets. On Monday the country risk went up to 470 points, the interest on bonds rose to 6.6% and the IBEX fell 3.48% on Monday and fell again on Tuesday, bringing the index below the psychological 8,000 point barrier
Hungary has asked for financial assistance from the International Monetary Fund (IMF) and EU. There are fears that the crisis in the Southern countries, hitting the banks in the North, may affect the economies of the Eastern EU member states
Vice Premier Minister Wang Qishan of China, now the world’s second largest economic power after USA, has predicted that the world recession may become chronic. The economy of China expanded 9.1% in the third quarter
Willem Buiter, chief economist Citigroup, has warned that Europe has only days or weeks to avoid a default by Spain or Italy
Nouriel Roubini, Professor at New York University and the man called ‘Guru’ due to foreseeing the present crisis, has declared that Italy is doomed
Prime Minister (until Rajoy is sworn in) Rodriguez Zapatero, at the end of last week, asked the EU that the European Central Bank be asked to help relieving the pressure on the market. EU answered that most important is that Spain helps itself
Before the elections – after the elections
By Per Svensson
Partido Popular, led by Mariano Rajoy, has won a clear and resounding victory in last Sunday’s national elections, conquering an absolute majority in both the upper and lower chambers, the Senate and Congress. In addition, it controls 11 of the 17 regional governments and three-fifths of the town halls.
PP did not win the elections because they had a better program than the governing socialist party PSOE, or even a different one. The programs of the two main parties are 95% interchangeable. It was the leader of the socialist government, Rodriguez Zapatero, who won the elections for Rajoy. Remember his merits:
After winning the national elections in 2004 backed by 42.5% of the votes (11 million voters, last Sunday he got less than 7 million) he embarked upon his first legislature throwing all gates open for an untrammelled property speculation. He gave tax advantages to the buyers of dwellings, he encouraged the immigration of millions of unskilled workers for the construction industry, he did not intervene against the banks financing the speculation with limited guarantees, nor against the town halls and regional governments approving more and more building projects. Neither did he or his Administration intervene against the extensive illegal construction, and he persistently ignored the reports on property abuses presented by the European Parliament, based on documentation from the association Abusos Urbanisticos NO. He felt proud of the many new jobs created on the building sites and the increased tax income to town halls, regional governments and his own central administration, and insisted that Spain be included in the G-7, the group of the seven most industrialised and economically developed countries.
He ignored all warnings (from us and others) that a property bubble was building up and that the foreign buyers would not buy any property at any price, relying exclusively on his hand-picked economic advisors, especially the Minister of Finance and Professor in Economics, Solbes
The bubble bursting
At the beginning of 2008, it became more and more clear that the enormous property bubble was about to burst, but the Zapatero Government continued to refuse to acknowledge it. In June, he still asked in Parliament the rhetorical and ironic question: Crisis, what crisis?
In September the same year the bubble burst so loud that even Zapatero heard it. Then started a period of assurances that the crisis was only temporary and would soon pass. ‘The Spanish economy is solid and the property industry sound!’
Based on such assurances PSOE and Zapatero also won the national elections in 2008. But the overhang of unsold properties increased, the property buyers disappeared, the loans by the banks to the promoters started to go foul and threatened also the banks, ten thousands property companies and supporting industries folded, millions of workers lost their jobs, almost half of the young people never found employment, large numbers of families could not pay the mortgages on their dwellings and were evicted or are in the process of being so, regional governments are not able to pay their bill, town halls are not paying their employees……..
The grave failures of Zapatero were the best election support for Rajoy.
Promises of Rajoy
Spain’s Prime Minister-elect, Mariano Rajoy, is a careful person. He realised that he would not have to make inflated promises to win the elections. However, he has made some:
That he will use the savings knife on everything, except on pensions, education and health. That is already a big promise and it will be very interesting to see how he will achieve it.
Moreover he has promised to lower income tax for families, savers, and buyers of a permanent dwelling (!); restrict the company taxes for small firms to 20% and a maximum of 25% for the rest; simplify labour contracts, reform the collective agreements between trade unions and employers and give a premium of 3,000 euros to entrepreneurs hiring their first employee. Further: Only legal immigration will be accepted, linked to employment; introduction of an electronic health card with the health record of the carrier; no introduction of a ‘copago’ in the health services (meaning that patients pay part of the bill); free small companies from paying taxes on bills before they are really paid; not negotiate with the ETA terrorists; and eliminate all unnecessary public bodies and costs, rationalise the administrative structures and reduce the number of high charges and temporary personnel.
A promising program, but how much of it will Rajoy be permitted to realize by the real powers, the markets, the rating agencies, the EU and the IMF?
The new parliament will be constituted on 13th December and the new Prime Minister appointed on the 19th. Then decisions can be taken and a budget for 2012 presented and approved. We shall study it with great attention to see what will be expected in taxes from foreign property owners and residents.
Grave diggers not being paid
By Harriet Alexander, Moia
Nestling in the pine-clad hills above Barcelona, the ancient terracotta-tiled town of Moia could be straight out of a fairy tale. Narrow cobbled streets wind up towards the honey-coloured church in the centre, where the main plaza is decked with streamers and flags from the recent fiesta.
But for all its Disney-esque charm, Moia is rotten to the core.
"We are broke," said Dionís Guiteras, the town's newly-elected mayor in August. "We managed to pay the council staff on July 31, but I don't know if we will be able to on August 31. We haven't got any money to pay the electricity company, so maybe the street lights will go out. All of our buildings could be for sale."
In a bleak warning to residents, Mr Guiteras even prophesied that, unless Moia's residents rapidly adopted money-saving measures, the town would not be able to bury their dead. "We cannot keep our heads in the sand," he said.
This apocalyptic vision of the Spanish economic meltdown may seem pessimistic - but the near-bankruptcy of Moia town council is far from unique.
Several hundred miles south, near Murcia, police in Moratalla have been told to walk rather than use their patrol cars. The vehicles would not be much use, anyway, as the town's two petrol stations are owed €120,000 in town hall fuel bills and refuse to fill up municipal cars. The 120 council workers were finally paid last week, after a three month delay, but Moratalla's list of angry creditors goes on and on - the council owes local businesses €9 million in unpaid bills.
In Barbate, near Cadiz, 180 tonnes of rubbish are accumulating on the hot streets after the council's workers went on strike, having not been paid since June.
Back in Catalonia, the wider region around Barcelona, ten further councils are thought to be on the verge of financial collapse.
Indeed, the Federation for Municipalities and Provinces estimates that 40 per cent of Spain's local governments are in serious economic trouble.
The impact of Spain's crippling €639 billion debt, and the need to make huge cuts in local and national government budgets, is beginning to be felt among ordinary Spaniards.
Backed by seemingly limitless credit, town councils, or ayuntamientos, embarked on lavish spending sprees before the 2008 financial crisis, buying voters' affections by building brand new theatres, dance schools, and astro-turf football pitches in even the smallest of villages.
But now the party is over, the debts must be paid, and Spain's 8,115 municipalities are waking up with a colossal post-boom hangover.
"We are indeed the Greece of Spain," said 40-year-old Mr Guiteras, an independent mayor who was one of the first to openly admit his administration was in financial crisis. "The simple fact is that we have no money left."
Clad in jeans and canvas Catalonian espadrilles, and running his hands through his shock of grey-streaked hair, he told how, on taking over the town hall, he uncovered a mountain of debt.
"We knew it was bad," he said with a wry smile. "But we didn't realise quite how bad."
Local elections in May saw many of the ruling administrations swept from power, as public anger at the financial crisis mounted. And with fresh governors in many municipalities came a new – and deeply worrying – assessment of the country's finances.
The finger has been pointed mainly at councils under the control of prime minister Jose Rodriguez Zapatero's socialist PSOE party, although in Catalonia, regional pro-Catalan parties have also been blamed.
Moia, with a population of 5,800, owes €25 million – almost 400 per cent of its annual budget.
The money is owed to everyone from banks to office suppliers, local businesses and even musicians for the fiestas – some of whom have been waiting for payment since 2005.
The town is unable to refinance its debt, owing to the scale of the problem, nor can it raise taxes as these are already at national limits. Mr Guiteras fears the crisis could even spell the end of ayuntamiento itself, with consequences for democracy in rural Spain.
"That's what I meant about not being able to bury the dead," he said. "We need to change our way of thinking and acting, or else the consequences really will be the bankruptcy of the ayuntamiento.
"Do we really need a dance school, a music school? Is it essential? Can we share facilities?
"We have cut our politician's salaries by 65 per cent, and turned off the lights illuminating the church. We are going through everything, shaving off costs."
Police will be soon driving around in smaller, cheaper cars, Mr Guiteras added, while even the chair upon which he sits in his office could be sold. The stunning town hall itself - an early 18th century mansion, built on top of the hill by a wealthy local businessman – could also go under the hammer.
"Why not? In the past, people used to sweep their own doorsteps when it snowed. But now, they wait for 'Papa Ayuntamiento' to come along and do it for them. We need to change this mentality."
Despite Mr Guiteras's crusading zeal, not all of Moia's problems can be solved with a change in mentality.
Indeed, a few minutes walk away lies a €6 million reminder of the scale of the problem. Behind locked steel barriers is a brand new town medical centre, gathering dust since completion over a year ago. Piles of sand are left on the terrace, and broken glass scatters the forecourt.
The previous mayor built the centre, plus a three-storey underground car park, but upon completion the financial problems remained, and the property has remained locked up ever since.
"It is bad management, pure and simple," said Rosa Soler, 63, sitting in a nearby park. "They spent like mad, but without the money to pay for it."
At the bottom of the street, the town's two ambulance drivers told The Sunday Telegraph that they were on strike.
The regional government had reduced their salaries by 16.5 per cent, and so they – like their colleagues across Catalonia – were officially downing tools, even though they continued to provide emergency cover.
"We have to keep working, as we provide an essential service. But it is terrible how we have been treated," one explained.
And yet, for all the malaise simmering in the town, some resigned residents have taken heed of the mayor's words. Last week's annual town fiesta was organised at a fraction of its usual cost, with performances mainly by local volunteers rather than expensive outside acts.
Meanwhile Bernat García de Mendoza, 43, the leader of a local parent-teachers association, was sweeping the school playground after it had been hired by a group of French students.
"Before, we would have contracted cleaners to come in," he said. "Now we do it ourselves.
"The problem is that Spain in many ways is still a Third World country – we joke that Africa begins when you cross the Pyrenees. We should have been living within our means, renting houses, driving old cars, developing slowly and securely. But we went crazy."
Back in the town hall, Mr Guiteras now has just days left to negotiate with the regional authorities to find a way to pay his staff.
He has staked his reputation on being frank with the public about the crisis, but so far his only consolation is the certainty that he is not the only mayor suffering sleepless nights.
"Many politicians are embarrassed to admit the scale of the problem, or are afraid of losing voters. But Moia is a reflection of what is happening across the country.
"It's a real moment of crisis, and all of Spain needs to wake up to that."
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