Business over Tapas January 25 2018 Nº 242

25 Enero 2018  Sección; Especiales 715 votos

Opinion:

Corruption is a lively preoccupation in modern countries and, in Spain, it is practically considered as part of the woodwork. Perhaps it is so common as to be dismissed with nothing more than a slightly embarrassed shrug. We would all do the same if we were in power, we hint with a dismissive smile. Certainly, a friend in local office tells of a new councillor from another party sidling up to him the other day and asking ‘well, now I’m in, so how do I make money?’

 

In Madrid, and Valencia and Seville, various major bands of corruption are going through the courts. The Púnica, the Gürtel and the ERE etc. How seriously do we take them?

The press say we lose, between one thing and another, 90,000 million euros a year in corruption here in Spain.

El Huff Post, on the Gürtel Case, says of the Partido Popular ‘...the political formation, and this has already been admitted by nine businessmen to the court, was allegedly financed in an irregular way using false invoices to compete in electoral campaigns, under economic conditions more beneficial than the others. Is it enough to apologize when the rules of the democratic game are adulterated? Few questions should be so rhetorical, but the PP is immersed in other debates, and see this as a smoke screen, anxious to turn a page that weighs like a slab of stone...’. Pedro ‘Jota’ Ramírez (the director of El Español) says that there is no chance that Rajoy didn’t know about the party’s ‘black account’ and that the PP ‘was a “maquinaria de delinquir”’ (here). He gets even closer to the bone in his own newspaper here.

Carlos Floriano, a deputy for the Partido Popular, asks “Oigan, ¿nosotros robamos?” – see it on a video Tweet posted by Podemos (here). Apparently, some think you do...

But times change and this is all very old news says the PP, which ‘...is looking to the future rather than the past’.

But there is still one party that is intolerant of corruption. Perhaps it is their strongest suite: Podemos wants a motion of censure against the Government, but they’ll need the support of the PSOE. The socialists answer so far is ‘maybe...’. Lenox dixit

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Housing:

From The Corner: ‘The new upward cycle in the property sector seems to be consolidating. Positive proof of that is the fact that housing prices have been increasing for the last two years. In the last quarter of 2017, the National Statistics Institute’s Housing prices index showed a year-on-year rise of 6.7%, the biggest increase since the index started in 2007. And the trend appears to be continuing. According to the Spanish Property Evaluation Society, new home prices will rise by 5.5% in 2018. This increase will be supported by the good pace in demand, as there will also be a 14.1% increase in sales, according to the organisation. “The market will continue the recovery started two years ago, although it still has a relatively long stretch ahead to reach the desired cruising speed,” it says in a report on the outlook for the sector...’.

From VozPópuli: ‘Later this year, two major investment funds – Blackstone and Cerebus – are forecast to break the real estate market in two by quickly selling off around 40,000 million dollars of heavily discounted ‘toxic stock’.

Real estate companies are examined by Mark Stücklin’s Spanish Property Insight: ‘...According to the national business registry compiled by the Spanish Institute of Statistics (INE), in 2017 there were 67,812 companies involved in selling property, the lowest figure since the registry started in 2008 with 106,375 on its books. Since then, the number has not stopped falling. But if the property development business is protected from cowboy operations by financing considerations, the estate agency business is not. Anyone can set up as an estate agent in Spain, and the barriers to entry are low, which helps explain why the number of companies in the sector has risen from 149,000 in 2015 to 169,000 today, according to figures from the INE. Industry insiders fear that many of the new entrants lack professionalism and are chasing easy money, and could end up damaging the industry’s reputation, just like they did in the past...’.

Useful advice for borrowers: ‘If in financial distress, engage with your Spanish lender to protect your assets back home’. From Spanish Property Insight here.

From Lexology: ‘Spain has introduced a new tax reporting obligation applicable to intermediaries in the renting of houses for tourism purposes, which mainly affects collaborative online platforms. Until now, the Spanish Revenue had tried (in some cases, unsuccessfully) to gather information through individual requests to these intermediaries based on general reporting obligations set out in Spanish tax laws...’. More here.

A British couple are toasting a victory after they reversed a draconian demolition order on their stunning Spanish villa. Valerie and Patrick Jubb tell how they have ‘been through hell’ over the €20,000 legal battle to save their luxury B&B. It came after their €680,000 four-bed property in Jimena de la Frontera (Cádiz), was slapped with a demolition order in early 2015, just as they came to sell it...’. From The Olive Press here.

A wealthy woman in Ibiza has avoided a demolition order on her ‘illegal’ property – a large rental estate popular with personalities – since the paperwork was in Catalonian, a language the defendant claims she doesn’t understand. Público has the story here.

From Wolf Street: ‘The Barcelona Rental Market Is Out of Control. Rents are up 50% since 2013, wages go nowhere and a third of residents earn less than €1,000/month’.

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Tourism:

Mariano Rajoy, welcoming the Latin-American ministers for tourism at the CIMET – the Spanish and South American business summit – said ‘“Last year more than 82 million international tourists visited Spain, which is an increase of 8.9% over 2016, according to the closing estimates”. This data leads Rajoy to affirm that "Spain is experiencing a magnificent situation in the area of tourism, consolidating itself as a reference in the world ranking, especially in terms of the number of arrivals of international visitors"...’. Nexotur reports here.

More good news comes from Agent Travel with ‘over nine million cruise passengers visited Spanish ports last year’.

And, of all the places to visit in Spain – Ibiza is now one of the ten most expensive resorts in the world, says Público...

Record’ FITUR figures here.

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Finance:

The Government will rescue the Nation’s toll motorways in February, assuming losses of at least 2,000 million euros*’. El Diario says that ‘the Government expects to recover between 700 million and 1,000 million of this sum with its rescheduling of the bankrupted routes at the end of the year, which in principle means that the same companies who ‘bust’ them would be eligible to take them on again’. With a clause in the contact that, if the autopistas were to go bust again, that the Government (well, the tax-payer) would bail them out a second time. Nice business if you can get it. (*or anything up to 4,500 million euros)

Preferente brings us Spain’s seven largest hotel chains, by income. The groups – in order of size – are Barceló, Iberostar, Riu, Meliá, NH, Grupo Piñero and Palladiun.

From El País in English: ‘The IMF reduces Spain’s growth forecast due to political uncertainty. Output for 2018 projected to grow by 2.4%; it is the only advanced economy not to get an upward revision’.

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Politics:

From El País: ‘For the first time in almost 15 years, there is no certainty within the PP that Mariano Rajoy will be the party's candidate in the next general election. Although the leader has expressed publicly and privately his willingness to run for the sixth time in the presidency, few ranking members of the formation are confident that he will be the candidate...’. In El Mundo, Rajoy is reported to be ‘more conditional’ in his plan to run again either in 2020 or (as may seem likely) before.

The story has been revealed of an offer by the ERC party to the PSOE last summer to support a motion of censure against President Rajoy, in exchange for the Catalonian anti-monarchist pro-independence far-left group not pushing for the referendum for Catalonian independence last autumn (!) but, the PSOE evidently dropped the ball.

Ciudadanos thinks that an un-stated two-party vision has been reignited within the PP and PSOE – to ‘keep the others out’. El Diario looks at the case.

Next up – ‘The Andalusian regional elections should occur in March 2019, but the political groups there are already preparing for an earlier date. They think Susana Díaz will call elections for this autumn or even earlier.’

A report from the European Commission says that ‘...in proportion to Spain's wealth, there is little aid to reduce poverty and inequality. While skilled workers improve their working conditions, those with less education are punished with lower wages each time, thanks to the high unemployment rate...’. More at El Plural here.

Can the Interior Minister Juan Ignacio Zoido hold on to his job? El Huff Post ruminates on his chances here.

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Corruption:

From the Gürtel trial – ‘Ricardo Costa confesses and points to Camps: "The PP was financed with black money". The former Secretary General of the Valencian PP states in the trial for party financing that "Francisco Camps made the decisions"...’. More at El Levante here. Francisco Camps was the president of the Valencian Community between 2003 and 2011 (Wiki). The Gürtel Case has been going since 2009.

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Catalonia:

From the Real Instituto El Cano (in English) ‘Catalonia’s independence bid: how did we get here? What is the European dimension? What next?’ A useful page for source material.

From The Guardian: ‘Spain’s supreme court has rejected a request from prosecutors to reactivate the international arrest warrant for Carles Puigdemont after the deposed Catalan president flew to Denmark from Belgium to speak at a conference on Monday. Puigdemont, who fled Spain at the end of October after being sacked by the Madrid government, is facing possible charges of rebellion, sedition and misuse of public funds over his role in the push to split Catalonia from Spain. He will be arrested the moment he sets foot on Spanish soil...’.

From the pro-independence Vilaweb in English: ‘Puigdemont, in Denmark: ‘We will not surrender to authoritarianism’. The Catalan president leaves Belgium after three months to participate in a University of Copenhagen debate on Catalan politics’.

The PP only has four seats in the Catalonia parliament – not enough to have a proper group voice (even after begging both the PSOE – the PSC in Catalonia – and Ciudadanos for a spare councillor). Thus, the PP must join the Grupo Mixto with another minority party – the far-left republican independentist (loony tunes) CUP. The ABC has the story here.

The Ministry of the Interior has placed a hundred extra Guardia Civiles in Gerona to stop and catch Carles Puigdemont if he sets foot in Spain. The minister says ‘we shall do our best to be sure that Puigdemont doesn’t enter Spain, even hidden in the boot of a car’.

They seek him here, they seek him there

Those Guardias seek him everywhere.

Where can he be and what does he want-

That Demmed elusive Puigdemont!

One of the jailed ex-councillors has decided to leave politics... if only they will free him.

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Courts:

From Público: ‘Hate crimes: the elixir of the new Inquisition. Jurists denounce an "interpretation" of hate crimes that is "absolutely incompatible with the Constitution," which is also being used to repress political rivals’. ‘Hate crimes’ are in vogue these days, says the article, but it is not against the law to hate.

The National Audience has annulled a fine for twenty million euros levied against Repsol for price-fixing back in 2015. El Plural tells us the why and wherefore.

The unete, a virtual currency created by a Valencian called José Manuel Ramírez, has found 22,000 victims in up to 78 countries, says El País, making a tidy sum for the financier of around 48 million euros. Punters are said to have lost considerably more than this in tinkering with the virtual currency, and Ramírez’ activities are now under investigation in Madrid at the National Audience. Ramírez is currently a free man.

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Brexit:

European Union special negotiator Michel Barnier arrived in Madrid on Tuesday for a jam-packed schedule of meetings all aimed at calming concerns over the impact of the United Kingdom’s exit from the union – a process commonly known as Brexit. Barnier met with the Spanish government and with business leaders, sharing two key messages: the process has been complicated but it should be fast; and the United Kingdom will be worse off than the EU after it leaves, but both will be weakened. On the thorny issue of Gibraltar, the contested UK overseas territory located in southern Spain, Barnier expressed his support for the position of the Spanish government...’. From El País in English here.

Tourism concerns regarding Brexit voiced at the FITUR. Hosteltur has the details here.

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Media:

OKDiario is Spain’s leading right-wing site, a sort of Breitbart. The director is Eduardo Inda. One sees him on a lot of TV chat shows (for no very good reason). Back in 2016, the site was ‘lent’ 300,000€ by the Ministry of Economy without guarantees or any collateral. The story at El Salto here.

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Ecology:

The European Parliament last week approved the European Renewables Directive, which proposes that by 2030, 35% of the EU's energy consumption should come from' green' technologies. The text also devotes a paragraph to self-consumption in which it specifies that consumers have the right to use the electricity they themselves produce and store "without having to pay any charge, tariff or tax". It therefore requires the Member States not to charge any kind of charge for self-consumption, as is currently the case with the ‘Impuesto al sol’ in Spain. The Government approved in 2015, with José Manuel Soria at the head of the Ministry of Energy, a royal decree that obliges self-consumption installations with installed power of more than 10kW to pay an immediate charge on self-produced electricity...’. From El Boletín here. This did not go smoothly, with the Spanish Populares – to the surprise of other euro-conservatives – voting against the measure (here and here).

A planned ‘macro-urbanisation’ on salt-flats next to Roquetas de Mar (Almería) has attracted local criticism from both vecinos, the ecologists and the Acuíferos Vivos platform, which says that there simply isn’t enough water available to maintain the planned community.

More than 100 farmers have signed a petition to stop the destruction of healthy olive and almond trees in Alicante. This is in response to Valencian officials from the Ministry of Agriculture enacting EU plans to eradicate the plant virus, Xylella fastidiosa, which has damaged a massive amount of olive and almond trees across Europe. Under current plans more trees than are infected have to be cut down...’. From The Olive Press here.

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Various:

From El Huff Post comes a strong article about ‘poverty, low salaries and a strong inequality’ in Spain.

What happened to the ‘most important private cancer hospital’ in Europe? Simple, it was never completed. The sad story here.

Spain has won its bid to host the Galileo sat-nav monitoring system after the EU decided to relocate the centre from the UK following Brexit. The UK had won the contract, in 2010, to provide the centre for EU’s advanced GPS satellite system but the European Commission decided the centre must be relocated to remain in the EU once Britain leaves...’. Found at The Local here.

The S-80 submarine that wouldn’t float. The massive investment in four new submarines for the Spanish navy has hit a number of snags (including the problem that the first sub to be built, would sink but not rise). The cost of all this, says El Español, is going to be at least 4,000 million euros.

The inaugural ride of the AVE from Valencia to Castellón last week, with Rajoy on board, suffered a twenty-minute wait halfway along the route. Indeed, during the unwelcome pause, it was overtaken by the local train.

Los Chichos: "The Top 40 playlist vetoed us for denouncing in our rumbas what belonged to the politicians". The legendary trio Los Chichos have bid farewell to the stage in Madrid, after 45 years and 22 million albums sold without press campaigns, without the support of the radio stations and without appearing on the top-selling charts with their songs about marginalization...’. From El Salto Diario here.

Some service stations have taken to charging customers to inflate their tires. It was hard enough getting them to do it for free, says Diario Motor in an opinion piece here.

The Guardia Civil motorcycle cops in the Canaries are peeved after their new motorbikes were blessed with holy water by a priest.

The Sunday Times wrote a jolly (if apparently offensive) article about Spain called ‘How To Be Spanish’. (Here, pay-wall etc). The article is fiercely criticised by Caso Aislado here.

There’s always another one... from Lenox’ blog here.

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Self Promotion:

Business over Tapas on Facebook: 750 readers as of Wednesday night.

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Finally:

Paco de Lucia - Entre dos aguas (1976) full video YouTube here.

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Business over Tapas January 25 2018 Nº 242

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

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