Down in Almería, an area which has never had much of a train service (just the slow daily creak to Madrid via Linares) and with its second provincial line closed down in the eighties (through Albox and Zurgena and on towards Pulpí and Lorca) through lack of public interest, it’s a wonder that the Almerians should be so keen on having a high-speed train: an AVE. Is it for the kudos, the high demand from passengers, or perhaps just another link to be completed in a secondary route across the country? There’s the longest twin tunnel in Andalucía – currently bricked up as we debate whether to reduce the eventual service from Almería to Murcia to just one line of track (and when will they build the AVE the other way – Almería to Granada?). Now in the northern part of Almería, the Government is collecting up the tortoise population (a silly distraction, say the PSOE as the ecologists nod their heads wisely, thinking of their next European subsidy) and organising the local expropriations so they can build another bit, and slowly the whole behemoth struggles forward a bit more. By the time it will be finished and ready to use (with yet more tickets subsidised by the taxpayer), for goodness’ sake, we’ll all have personal fliers anyway.
But the AVE is about Modern Spain’s place in the world: its search for international respect. TV journalist Jordi Évole discussed this with Mariano Rajoy in a recent interview:
Rajoy: What country in the world has a railway infrastructure like ours? (…)
Évole: Sometimes the trains run a little empty (…).
Rajoy: Yes, yes OK. Empty maybe. But, we’ve got them!
The issues with the AVE are of course, its cost and its worth. The cost is astronomical – we read of 70,000 million euros so far (here) with another 27,000 million planned in the short term. Each kilometre of track costs an average of 11 million to build and 150,000€ per year to maintain. Of course, it’s only money spent – and the political value is high (see here).
Does it bring extra wealth to the cities it serves? An article here says ‘no’, noting that hotel stays have actually fallen in provincial cities thanks to the service – whereas the Nation’s airport service can be seen to improve local tourist income. Two articles from a year ago – one found at El País – both manage to say the same thing: ‘A study concludes that no Spanish AVE line is profitable – demand will never be enough to cover the investment’. The ABC is not any more cheerful: ‘Spain is the country with the most kilometres of AVE per inhabitant, but also with the least passengers’.
So why do the politicians fight each other to obtain ever more kilometres of track? Because of their promises to the electorate, or their high plans for their provincial capitals, or perhaps just for the opportunities such huge sums of money might suppose?
‘Spanish property prices have been plummeting since the 2008 global financial crisis struck, but market conditions appear to be improving, according to a new report. Sales of residential properties by real estate agency Lucas Fox International Properties increased by 33% during 2015, fresh figures show...’. FromProperty Investor Today.
‘Spain's banks move past crisis and ramp up lending to home builders’. A report from the Irish Independent: ‘Some Spanish banks are advancing more loans to home builders and cutting their borrowing costs, eight years after they froze credit for construction as the nation's property bubble burst...’.
‘Spain’s so-called Bad Bank, real name Sareb, has launched a pre-summer campaign to try and offload 2,337 homes on the Spanish coast. The campaign is called “Tu casa a toda costa” – a play on words in Spanish – in English it might work as “Your house at any cost” (coast). Geddit? All of the properties are bank repossessions, one way or another. People who have had their homes repossessed might see a different message in the play on words...’. From Mark Stücklin’s Spanish Property Insight.
‘An industry association of appraisal companies expects Spanish house prices to rise slowly in future, whilst pointing out reasons not to expect another boom anytime soon. The Spanish Association of Value Analysis (La Asociación Española de Análisis de Valor or AEV in Spanish), which represents valuation companies in Spain, forecasts a “slow but sustained increase in average house prices,” in its latest ‘Valuations Observatory’ report, based on a survey of experts in the business...’. Found at Mark Stücklin’s Spanish Property Insight.
‘Spanish sales rise a third in a year, says international agent. The uplift in the Spanish property market has seen residential sales by Lucas Fox International Properties rise by one-third in 2015. Sales by the Barcelona-based real estate agency rose by 33% thanks primarily to the re-activation of the local market and strong high-end sales to international buyers...’. From the commercial site OPP Today.
Changing two national laws is not enough....Various home owners associations, including AUAN Association, unite to form a nationwide platform to continue to campaign to protect existing home owners and those purchasing property in Spain. Those affected by demolitions unite at a national level against a 'problem of the State'. The ABCreports on the new association created in Santander last week-end. It says that there are some 500,000 ‘illegal homes’ in Spain and that around 10% of these have a demolition order against them. The new group, called ‘La Coordinadora de Asociaciones Projusticia en el Urbanismo’ or CAJU, has been created to coordinate the campaign against the nationwide problem of demolitions... The group will work on a legislative initiative to ensure that the Property Register records the existence of proceedings that could end in demolition in order to offer greater protection to those purchasing a property in Spain. More at 20 Minutoshere.
‘Shamed CAM Bank failed in its legal duty to protect people’s cash as they invested in a luxury off-plan development, a judge has ruled in the second case brought by victims. The victory for the Finca Parcs Action Group at the First instance Court in Hellin has again given the bank a bloody nose and upheld the rights of people investing in property in Spain.
The Caja de Ahorros del Mediterraneos (CAM) – now Sabadell CAM bank – was responsible for the deposits under Spanish law LEY 57/1968, known as a bank guarantee.
The project, Las Higuericas Finca Parcs, close to the village of Agramon in Albacete, was abandoned in 2009 when the bank withdrew funding and the developers ran out of cash...’. Story at Round Town News. The Finca Parks Action Group website is here.
‘Europe's tallest skyscraper among six planned for Madrid. The city's skyline could change forever with the construction of six new skyscrapers, including the EU's tallest building. The skyscraper will have 70 floors and will be built by Distrito Castellana Norte (DCN) as part of a project that will include another five towers along Madrid’s Castellana...’. FromThe Local.
The Chinese group Wanda, owner of the Edificio España in Madrid, has now agreed to the conditions placed by the Mayoress for refurbishment of the emblematic building.
An old and amusing article from the late Barbara Napier about buying an old farmhouse or chunk of land in the middle of nowhere (this, before the added issue of the ‘illegal homes’).
‘Spain’s acting government has increased its forecast for the country’s public deficit for 2016 from 2.8% to 3.6% of gross domestic product (GDP), setting the figure for 2017 at 2.9%, up from 1.4%. The new figures were announced on Tuesday by acting Economy Minister Luis de Guindos ahead of an appearance before Congress to outline a “Stability Program” that will be sent to Brussels detailing these forecasts...’. FromEl País in English. De Guindos also expects to create 900,000 jobs in the next two years.
The Government must cut 2,000 million euros in public spending this year (equivalent to 0.2% of the GDP), following pressure to do so from Brussels, says the acting tax-minister Cristóbal Montoro. This (with a year’s period of grace) to bring Spain by 2017 to within 3% of its deficit. El País reports here.
Hacienda has received a list of Spanish names and bank accounts from 2006 to 2008 provided by a whistleblower in Switzerland, says Públicohere. The amount is claimed to reach around 8,000 million euros.
‘Acting government boycotts Congress to avoid criticism from other parties. Popular Party administration argues that it is not accountable to congressional oversight since inconclusive elections’. Headline at El País in English.
The acting Minister for Energy, Industry and Tourism, the Canary politician José Manuel Soria, announced that he felt obliged to stand down from his position last Thursday after the publication of his appearance in the list of the ‘Panama Papers’. El Confidencialreports. The acting Minister for the Economy, Luis de Guindos, has taken on the extra work-load.
Following publication of the ‘Panama Papers (with more interesting names appearing every day), The Guardiansays that ‘UK and European allies plan to deal ‘hammer blow’ to tax evasion. George Osborne agrees to cooperate with France, Germany, Spain and Italy on exposing shell firms and overseas trusts’. We read that ‘Britain and its European allies have announced new rules designed to be a “hammer blow” against tax evasion in direct response to the Panama Papers leak that exposed how the world’s richest and most powerful people hide their wealth from tax authorities...’.
To help keep everything tidy, the Partido Popular has published a complete list of all PSOE politicians accused of corruption. The total is 320 ex- or current politicians (162 of these in Andalucía) include 76 tried and found guilty. La Gaceta has the story.
One politician that no one in Spain likes at all is Analdo Otegi, the Basque leader (also known in some circles as ‘Spain’s last political prisoner’) who has just been released from prison after six and a half years. He was interviewed by Jordi Évole on LaSexta and made some alarming remarks (see them here), including ‘I know that there are some people in the Administration that would like to see ETA return to killing’. The full interview and other material and reactions at LaSexta’s page here.
An article about the Galician leader with the unpronounceable name, Alberto Núñez Feijóo, appears in El Diario. The article says that Galicia, under its President, has lost considerable income (18,000 million annually) and, at the same time, has tripled its debt. Where, it asks, has the money gone?
The United States Government noted last week the "systematic corruption of government officials" as one of the three most "significant" human rights problems suffered by Spain. The State Department mentioned those problems in its annual report on human rights in the world corresponding to 2015, released in Washington. Story at RTVE. The original ‘Country Reports on Human Rights Practices for 2015’ section on Spain (which is generally positive) is here.
‘Manos Limpias’ and ‘Ausbank’ – two well-known agencies in Spain, are now closed down with their leaders in Jail. Story in ‘Courts’ below.
The mayor of Granada, José Torres Hurtado (PP) has now resigned following revelations of improper town-planning (‘corrupción urbanística’). His councillor for planning has also resigned from public office. The resignations followed pressure from the Partido Popular. The story at El Paíshere.
‘The jailed former Guatemalan President Otto Perez was accused on Friday of negotiating and receiving part of a $25 million bribe in exchange for granting a port concession to a Spanish company, the attorney general's office said on Friday...’. Found at Reuters.
‘The head of an obscure far-right organization involved in several high-profile court cases in Spain over recent years has been arrested in Madrid on extortion charges. Miguel Bernad, head of Manos Limpias was detained on Friday morning along with Luis Pineda, the president of Ausbanc, a financial consumer association. Both men have been involved with shadowy neo-fascist groups dating back to the 1980s. They are thought to have been lodging complaints against a number of individuals, institutions and businesses and then demanding money in return for withdrawing legal action, say judicial sources...’. El País in English has the story. Manos Limpias is a sort of far-right association that is often in court suing those it doesn't approve of (often bringing silly and time-wasting cases, but also part of the complaint against Urdangarín and Princess Cristina). Last Friday, they were closed down by the anti-fraud police and their director was arrested for 'extortion and operating a criminal organisation'. More about this extraordinary story at CadenaSerhere. One case leads the police to suppose extortion by Manos Limpias from the Unicaja Bank for a million euros here. Finally – it seems they were ‘caught’ due to a sting operation revolving around the Princess Cristina and an alleged 1.5 million euro claim to ‘drop the case’. El Español has the story. The two, Bernard and Pineda, are now in jail without bail.
To most people’s surprise, the ex-president of the diputacion de Castellón and once-head of the PP for that province Carlos Fabra, banged up in prison for sundry crimes in December 2014, is now in ‘third grade’ – which means he can now be preparing for ‘his return to society’. El Mundo has the story.
Miguel Blesa: he might be disgraced, but he’s still free. The ex-President of Caja Madrid (famous for his ‘tarjetas black’) was briefly jailed – on two occasions – by a judge back in 2013. In all, for fifteen days. The judge, Elpidio Silva, lost his job over the affair and now Blesa is suing him for 500,000€ for his time behind bars. The story at El Diario.
The Spanish media still prefers to call us expats ‘residential tourists’. An item in La Opinión de Málaga called ‘Residential Tourism on the Coast, Confident in Resisting the Brexit Effect’ deals with the tricky subject of what might come to pass locally if the UK were to leave the EU. Apparently, very little, although there will be ‘more paperwork’ for the Britons resident in Spain to deal with as ‘extracomunitarios’ (‘foreigners’). An expert, Ricardo Bocanegra from the ‘Federación de Asociaciones de Extranjeros de la Costa del Sol’, thinks that there would be bilateral agreements signed between Spain and the UK to keep things in place. Ricardo Arranz, president of the ‘Federación Andaluza de Urbanizadores y Turismo Residencial’, is similarly sanguine: ‘the British will know how to resolve these potential issues’, he thinks. The issue of health coverage might however be dealt a serious blow for the British residents, as the UK removes itself from EU accords.
The days of ‘print’ newspapers must be slowly winding down, thanks to high print-costs, commercial and political influence and, above all, Internet-based competitors. The latest results from the EGM, which tests readership (as opposed to copy-runs with the OJD), shows a fall in the first quarter of 2016 for the El Mundo readership of eleven per cent (to 852,000 readers) and of El País of 7.5% (with 1.4 million). The biggest readership held in Spain is for La Marca – a sports paper – with a healthy 2.3 million readers. More on this at PRNoticiashere.
El País continues to manipulate the facts with regards to Podemos, according to an article at El Ventano. Tuesday’s editorial in the long-respected newspaper, is a fine example. Podemos, says El País, had asked their supporters whether to go ahead with a PSOE/Ciudadanos/Podemos coalition. ‘...More than a referendum to settle between different positions, the Podemos vote was a plebiscite to ratify the already given decision to not form a pact with the PSOE and Ciudadanos. Or maybe an excuse to suggest that they did all they could to avoid another election: and thus they make their own ad hoc argument for the pre-campaign itself. They sought to legitimize the strategy of their leadership, and that of its leader Pablo Iglesias, rather than consulting the opinion of its supporters’. Around 90% had voted against the coalition option (a similar vote was held earlier by the PSOE militants...).
Twenty-two photographs which show how wonderful Spain is (for every wretch, there are hundreds of heroes) FromBuzzfeed.
‘A new report reveals that Spain is among the worst developed countries for childhood inequality, with more than a third of children at risk of poverty. Spain was ranked the sixth worst developed country for childhood income inequality, according to a "report card" by Unicef released on Thursday last week...’. FromThe Local.
The ‘ghost airport’ at Ciudad Real has finally found a buyer after years of failed bids and rock bottom prices. The white elephant that stood as testament to pre-crisis overspending has been sold to a group called ‘Ciudad Real International Airport SL’ for a total of €56.2 million...’. The story at The Olive Press.
Following the sudden departure of the Minister for Energy, José Manuel Soria, the national association for clean energy Anpierwants all of his decisions and rules about energy production and use to be revised. A useful article about his destruction of the alternative energy sector can be found here.
Don’t be homesick in London – advice for Spanish residents there (places to go, people to see...). Story (en castellano) at Condé Nast Traveler. It’s a useful guide to Spanish bars, shops and restaurants in London.
Twenty truly horrible words beginning with the letter ‘B’ for those who thought they had good Spanish...
The insurance company Liberty Seguros has started paying its staff who cycle to work a small extra. ‘We want to encourage and motivate people working at Liberty to leave their parked cars and to climb onto a bicycle’, says the company with three main offices in Madrid, Barcelona and Bilbao. Cadena Ser has the story.
The Benissa town council has passed a motion (initiated by a new group "Reiniciem Benissa- loosely aligned with Podemos, which did not present candidates in the last election) which urges that non Spanish EU citizens who are permanent residents in the town be given full voting rights, at all levels of government. It was passed unanimously at the March plenum- i.e. all parties including the PP which holds the mayor's office. It is to be hoped that other towns will take up this issue in a similar way. (uncredited)
The European Union is trying to ban the use of phthalates, a poisonous carcinogenic substance used in certain cosmetics, clothing, furniture and elsewhere. They have nevertheless come up with the determined opposition of the Spanish Minister for Health, Alfonso Alonso who, as Diagonal unkindly reports ‘has blocked various proposals to limit its use’. ‘Thus’, says the article ‘the close relations between big business and the Spanish Government have once again been seen in evidence’.
‘3,166 people in Catalonia left with gastroenteritis from bottled water. Health officials say a norovirus was found in patients who got sick from a product made in nearby Andorra...’. The story at El País in English.
If you don’t like the ailanthus tree, it appears you are not alone. Here’s a petition to halt its ‘biological invasion’ in Madrid. There seems to be a growing awareness of the ‘dangers’ of ‘invasive plants’. Take the agave for example, only here for five hundred years and now the ecologists want to pull them up (perhaps with some European funding to ease the pain).
More on Population
by Andrew Brociner
We have seen how the decrease in population affects the demand for houses. We have also seen how the decline in population lowers the long-run potential path for growth.
Another effect of this decrease in the population is on pensions. The old-age dependency ratio has been increasing recently. This ratio is the number of persons who are 65 years or older and the number of people between 15 and 64 expressed per 100 people of working age (15-64). It therefore measures the number of retired people dependent on 100 working-age people. So, as the number rises, more and more pensioners will be dependent on the same number of working-age people.
In 1990, there were twenty retired persons for every 100 people of working age or five working-age people supporting every pensioner. But more recently, there are twenty-five retirees dependent on 100 working-age people, or four people of working age supporting one retired person.
But the greatest change is yet to come, given the rising life expectancy, on the one hand, and the shrinking working-age pool on the other – due to low fertility and emigration, leading to a declining population.
In the next few decades, the old-age dependency ratio, after having gone from five people of working age supporting every retired person to the current four, is expected to go to three people, to two people and even to less than two people supporting every retired person.
We have already seen in previous issues that these problems concerning pensions are clearly on an unsustainable path and that successive governments just avoid the question for the unpopularity of the issue and therefore postpone the problem. As we continue into the future, the parameters for pensions will become more restrictive and as the population ages, a greater percentage of GDP will be allocated to these issues, such as healthcare and pensions. But, on the other hand, as funds are finite, this also implies that funds will be diverted from other areas, such as social services. Moreover, budgets will be strained and this will place a greater burden on debt.
Hi Lenox - once again many thanks!
Re the "Tourist go home" thing, I imagine they're against the all-inclusive lot who at the very most will have a coffee or a caña. On our recent Imserso trip to Ibiza we saw this at first hand. We got full board, with wine and beer free with all meals (except breakfast). So we spent next to nothing the whole time. And thus not too popular with the local bars.
Enrique Morente & Lagartija Nick perform "Omega" – the first fusion of Flamenco and Rock – now twenty years old. Here at YouTube. Based on a poem by Lorca. The full story behind the song, here at El Asombrario & Co.
Business Over Tapas April 21 2016 Nº 157
A digest of this week's Spanish financial, political and social news aimed primarily at Foreign Property Owners:
with Lenox Napier and Andrew Brociner
For subscriptions and other information about this site, go to businessovertapas.com
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