Certainly the most amusing headline this week comes from Quartz: ‘There are 70,000 British retirees living in Spain, but only 62 Spanish retirees in the UK’. While the numbers may be a little suspect, the truth is that, firstly, the Spanish may be working abroad, but their firm intention is to return ‘home’ when they can; and secondly, Spain is a great place to retire to.
It could be an even better place with a little common sense. The nearest thing to southern or eastern Spain as a retirement destination is Southern Florida, home for a huge number of New Yorkers and other northern Americans and Canadians, fed up with the winter weather that they’ve put up with through their working lives. Florida, with little industry and agriculture, is an ideal choice for the retirees (and those who come to work for them). It’s warm, balmy and well policed. The unemployment is very low at 4.8% and there’s plenty of room (even more so, for that matter, in Texas, Arizona and New Mexico). The European version of this, southern and eastern Spain (the islands are doing just fine), of course doesn’t work as well. The local politicians and the ecologists (as a negative force) have managed to scare away many potential retirees and their pocket books. Imagination is absent, foreign advice and participation is scarce. Unemployment in Andalucía in particular, partly as a result, stands at 28.5% (with under-25s at over 55%). Commercially structured retirement centres, with medical supervision, would make sense in the interior of the region, where there’s plenty of room and, if possible, even higher unemployment. Competent bilingual Spanish medical staff would, we can be sure, be glad to leave the UK for posts in extranjero Spain. After all, as we’ve seen, they won’t be retiring to the Lake District.
And here’s a quote in the Quartz article above from an official answering a question to the British parliament’s public accounts select committee regarding those 62 Spaniards: ‘...“We are not the retirement place of choice,” Wormald explained...’.
But Spain could be...
From Mark Stücklin’s Spanish Property Insight: ‘Local property rates will rise in many Spanish municipalities next year thanks to an update in cadastral values just approved by the Government. Cadastral values have just been updated in 2,452 municipalities all over Spain, and will rise in 1,895 of them, which will translate into higher taxes like IBI and the plusvalia that vendors have to pay...’.
‘While the property recovery is well underway in Spain a warning has been issued that another housing bubble could be on the horizon between 2018 and 2020. According to a leading economist the risk factor is that the real estate market could be seen as too good an investment and demand could push up prices. Some Spanish estate agents are also concerned about this kind of scenario...’. Story at Property Wire here.
‘The number of homes in Spain sold to British buyers has slumped since the Brexit vote and the fall in the value of the pound. Sales in the third quarter of this year declined 16% after steadily increasing since 2011. Last year the strong pound led British buyers to purchase almost 10,000 Spanish properties, up 42% on 2014, giving them a 21% share of the number of homes acquired by international buyers...’. The Guardian reports here. Although another report, from Property Wire, says that Almería property sales are doing well: ‘New data from the Spanish registrars suggests that Almeria on the south east coast of Spain is the country’s new property hotspot for British buyers as sales to all foreigners increase...’.
An interesting article at El Confidencial recommends renting over buying property in article written primarily for an American readership, but with relevance for Spain. Then, with an eye on the volatile Spanish Hacienda, there could be a few other reasons for foreign investors to think twice about buying a home here... An excerpt: ‘...The Legend: that someone can buy a house today and sell it in a few years (or decades) for a much higher price, or bequeath it to the children and that they could do the same. The Reality (according to the article): real estate holdings are much less re-valued than we suppose (0.2% a year during the last century) and, adding to this, we have been forced to spend a lot of money on taxes, insurance, reforms and other concepts beyond the mortgage itself...’.
Bloomberg notes a trend towards rentals in Spain: ‘Housing Crash Turns Spain’s Young into Generation Rent’. Here.
‘With foreign demand for homes in Spain once again on the rise, the international ratings agency Moody’s has warned that lending mortgages to foreign buyers carries a higher risk.
With mortgage interest rates at record lows, new mortgage lending surging, and foreign demand for property in Spain rising strongly (at least pre-Brexit), it stands to reason that mortgage loans to foreigners are on the rise... From Spanish Property Insight here.
‘Hard facts: The lack of systems and rules in Spain’s property game is ridiculous. In most other northern European countries, all sellers of properties have to provide factually correct information packs’. Headline from The Olive Press. An excerpt: ‘...Unfortunately, it’s a completely liberated system in Spain, where nobody takes responsibility for anything and even the buyer can renege, pleading ‘in good faith’ if they didn’t check anything themselves. Property descriptions by agents on the internet and in their details, can be at best ‘mistaken’, but sometimes, either through their or the seller’s ‘optimism’, appear to be deliberately misleading...’.
From El País in English: ‘US developer planning mega-resort outside Madrid. The Cordish Companies says €2.2bn project will create 56,000 jobs and attract millions of visitors. The Cordish Companies, a US real estate developer and entertainment operator, is planning to invest at least €2.2 billion on a Madrid resort. The complex will create more than 56,000 jobs for the regional economy, the company claimed in a presentation. The project includes hotels, restaurants, stores, theatres, cinemas, gaming areas and even a circus...’. More on this at Calvin Ayre, which notes that ‘...the scale of the plan has resurrected uneasy memories of EuroVegas, the aborted plan by Las Vegas Sands to build a Spanish integrated resort complex. EuroVegas came to nothing after Sands boss Sheldon Adelson demanded significant concessions, including major tax breaks and an exemption from Spain’s indoor smoking ban...’.
‘Expat campaign groups have hit out at a court ruling after British buyers were told they would not be compensated for millions worth of investment lost in an illegal development.
This comes despite Zurgena (Almería) planning boss Carlos Berbel being suspended from public office for three years for allowing 94 houses to be built on protected land...’. The story at The Olive Press here.
‘Spain is on track for a record year of overseas tourists, with official forecasts predicting 74 million foreigners will have visited the country by the end of 2016, but 90% of them will be thrifty Europeans looking for a low-cost stay in the sun. Spain is still not making much of an effort to attract more visitors from Asia and the Middle East, nor has it been successful in selling itself as a desirable destination for wealthier visitors from the United States and Europe...’. A cheap and cheerful story from El País in English.
From El Mundo: ‘"The Spanish economy has continued with its impressive recovery and vigorous generation of employment." Thus begins the presentation of the preliminary conclusions in the annual review of the Spanish economy by the International Monetary Fund (IMF) – a document that has been published Tuesday (13 Dec) and which also highlights that "...the reforms undertaken and the measures adopted to Boosting confidence have worked, and, along with external tailwinds and fiscal easing, have boosted the strong recovery of the past two years."...’.
Taxes are up (who would have guessed?). The prime targets are an increase on sugary soft drinks, tobacco and hard alcohol. With an increase also in company taxes and a better fight against fraud, the Government hopes to raise an extra 7,000 million euros in 2017. Meanwhile, cash payments will be limited to just 1,000 euros. More here. Another report, here, says that small business pymes and autónomos will no longer be able to fraction their quarterly IVA payments after January.
The Internet market in Spain is now worth 20,000 million euros in 2016, says Media-tics.
‘Improved funding and support systems help cutting-edge projects get off the ground. Spain’s technology entrepreneurs are striving to cross the divide that separates those who generate ideas from those who merely clone and adapt them for new markets. A new generation of Spanish founders is working to turn fresh ideas into commercially-viable businesses, often in partnership with technology institutes, academia and potential customers. While many start-ups still target consumers or businesses, others are working at the frontier between the private and public sectors, often seeking to “do well by doing good”...’. An article from The Financial Times reproduced here.
Poverty in Spain: the sad reality for 28.6% of the population who live under the poverty line. Fifteen distressing figures revealed at Diario 16 here.
Wolf Street is a useful place for gloomy banking news. Here it takes the Banco Popular to pieces: ‘Things have gotten so serious at Spain’s sixth biggest bank, Banco Popular, that The Wall Street Journal just christened it “Spain’s most Italian bank.” It wasn’t meant as a compliment...’. A few days after this report, a new president was chosen to replace the doddering Ángel Ron called Emilio Saracho, who is now facing possible buyouts from both the Santander and the BBVA.
‘The Minister of Energy and Tourism, Álvaro Nadal, says he will not exclude producers of energy self-consumption from the fixed costs of the electrical system and has warned that the current government will not allow that "strong consumers", like those that have "2,000 square meters of garden with a wide level of roof" to transfer their load to the rest of users.
He said this during his speech in the plenary session of the Senate to answer a question from the senator of Podemos Vicenta Jiménez who had asked the minister to eliminate the so-called 'sun tax' for being "an administrative, legal and economic barrier" which was in place simply "in solidarity with the big electric companies"...’. El Periódico de la Energía reports here.
Iñigo de la Serna, the Minister for Development, says that the Government will take over eight bankrupted toll motorways (the list here includes several radial roads outside Madrid as well as the Vera-Cartagena toll route). El Diario has the story here. The rescue of the bankrupt autovías will cost the State some 5,500 million euros says Nueva Tribuna.
So, who is going to pay for the ‘saved’ autovías? Well, gosh, //medium.com/@gemmarj/a-qui%C3%A9n-vamos-a-pagar-con-nuestros-impuestos-por-las-autopistas-en-quiebra-e1d844cf0bb2#.5yicd1qw8">we are... (opinion). ‘we take the risk, they take the profit’, says El Diario in an article called ‘Autopistas Piratas’.
With clever accountants, one can save a fortune on taxes. Take Inditex, who evidently have the best help in this field as a story reports here that the company saved 585 million euros in taxes, with ‘aggressive techniques of fiscal engineering’ between 2011 and 2014.
‘The Spanish Government to extend the 50€ flat rate for self-employed social security contributions to 12 months. With the beginning of the new legislative term, the minister of Economy has announced new measures for helping self-employed people in Spain. These measures include extending to one year the period of paying the social security flat rate of 50€, which was until now 6 months, and milder delay charges...’. Found here at a site called Legal and Tax Help. Better still, the autónomos can now claim against entertainment – or, at least, meals. Story here.
From the Spanish think tank Real Instituto ElCano: ‘Spain: A new opportunity to play a more central role in the EU’. Interesting stuff. An excerpt: ‘...the still-solid foundations of Spanish Europeanism both across the political spectrum and throughout Spanish society, the country’s strong economic recovery, the fresh leadership in the Ministry of Foreign Affairs and the potentially constructive role the Parliament can play, give hope to a country that faces a new opportunity to regain centrality in the European project’.
‘Spain’s idiosyncratic and gruelling working day, an 11-hour stretch punctuated by coffee breaks, yawns and long lunches, could be abandoned as the government seeks to bring the country into line with the rest of Europe. On Monday, the employment minister, Fátima Báñez, announced a push to let Spaniards knock off at 6pm, rather than the current 8pm. The government has also said it is willing to consider, as part of a series of measures designed to improve work-life balance, reversing the Franco-era decision that put Spain in the wrong time zone...’. From The Guardian here. How can we follow the project of the Ministry of Employment and Social Security to limit working hours to end at 6.00pm, when Spain’s service industry is the largest employer of jobs, with around 80% of all companies working, in some way, in this sector – including in the evenings? The numbers are crunched at El Confidencial here. Certainly, Spaniards work longer hours than other Europeans, with several comparisons with other countries offered by Europa Press, here.
‘Spanish Prime Minister Mariano Rajoy confirmed that on Monday he had finally spoken to the US president-elect Donald Trump 34 days after Trump's election. According to Spanish media reports, Trump called Rajoy on Monday afternoon in reply to the Spanish prime minister's attempts to contact him in the days following his election...’. From Global Times.
‘Suddenly, Spain does not seem such a bad place after all. For much of the past decade, the country made headlines for its tottering banks and free-falling economy, for its corrupt politicians and the ever-expanding army of unemployed. Many of these challenges loom large even today. ... “Spain has a very big advantage now: we are off the radar screen in terms of political uncertainty,” says Luis de Guindos, the economy minister...’. From an article in The Financial Times reproduced here.
‘Dissident rank-and-file members of the Socialist party (PSOE) are organizing to combat the national party leadership candidacy of Andalucian president Susana Díaz, having grouped themselves into 30 platforms across nine of Spain’s 17 autonomous regions and naming a 25-year party veteran and UGT labour lawyer from Díaz’s own region of Andalucía, Nieves Hernández, as the movement’s national coordinator...’. Item found at Progressive Spain.
Podemos is in trouble too... ‘More than 300 leaders of Spain’s anti-austerity party Podemos have been joined by several thousand party activists in signing an online petition against a proposal by party leader Pablo Iglesias to modify voting procedures at the upcoming February party conference that Iglesias critics say would rig the vote on the party’s direction and unfairly stack the odds in favour of Iglesias’ push to move the party further leftwards at the upcoming conference. The petition, titled Recuperar la Ilusión (‘Recover Hope’), was launched Friday and signed immediately by 300 local, regional and national party leaders, most notably including the party’s number-two national leader, Íñigo Errejón — marking the first time the party’s Secretary for Policy, Strategy and Campaigning has directly opposed Iglesias in the run-up to the party conference...’. Article from Progressive Spain. Elsewhere, Vozpópuli says that the bulk of Podemos supports Pablo Iglesias in an article titled ‘The radical wing and the leadership are digging a grave for Errejón’.
From La Región Internacional comes news of a major study by the Junta Electoral Central (Election Board) on the lack of democratic rights for Spanish emigrants.
Corruption is part of the Spanish political system, says a historian called Jaume Muñoz Jofre as quoted in Cadena Ser. He’s even written a book, called ‘La España corrupta. Breve historia de la corrupción (de la Restauración a nuestros días, 1875-2016)’.
How has the Pujol clan managed to avoid any inconvenience from the Government, the tax inspectors or indeed from the police? Jordi Pujol (ex-president of Catalonia), his wife and their staggeringly wealthy family seem to enjoy complete protection from the authorities. Why? Could it be thanks to the threat made by Jordi himself a few years back, ‘if you shake the tree, more than one branch will fall...’. (Paraphrasing an article in El Mundo here).
‘The Spanish authorities have seized 265,000 items of fake clothing and other products in an operation against intellectual property (IP) crime and money laundering. The Europol-supported operation by the Spanish National Police and Spanish tax authorities was able to dismantle an international criminal organisation involved in the distribution of counterfeit textiles, footwear, watches, sunglasses, leather goods, jewellery and more. Around €8m-worth of illicit goods was seized in the operation on November 29. The criminal group also used a sophisticated network of fictitious companies and front-men to launder the proceeds of their criminal activities, which are thought to have exceeded €9m...’. Securing Industry has more here.
This story has been going around for a while, but, could it be true? We certainly hope so! 'EU negotiators will offer Brits an individual opt-in to remain EU citizens, chief negotiator confirms. Exclusive: Guy Verhofstadt has fast-tracked the plan and will include it in his mandate...'. From The Independent here. But then, sadly, there’s this: ‘Contrary to what you might have read, associate citizenship is not on the European Parliament's table. Despite several reports in the weekend press that the European Union is considering granting Britons "associate citizenship status", the real story behind the headlines is quite different...’. From The European Parliament Information Office here.
‘Spain would reject any attempt by Nicola Sturgeon for Scotland to stay in the EU single market if the rest of the UK comes out, one of the country’s most powerful MEPs warned last night. Esteban Gonzalez Pons, who leads the Spanish delegation of MEPs in the European Parliament’s largest political grouping, told the Telegraph that Ms Sturgeon’s proposals for a special Scottish deal are “impossible.” He said the Spanish government would oppose any plan by SNP ministers to stay in the EU single market if the rest of the UK leaves for fear of encouraging its own separatist movements in areas like Catalonia and the Basque Country. Found at The Telegraph (Nov 24).
‘Gibraltar wants a special deal with the European Union when Britain leaves the bloc, Chief Minister Fabian Picardo said Sunday. Picardo told the BBC’s Nick Robinson that the British overseas territory will seek to preserve freedom of movement and access to the single market in negotiations about the U.K.’s future relationship with the remaining 27 countries in the EU, even if the rest of Britain severs these ties with the Continent...’. While remaining staunchly British. The report at Politico here.
‘...Britons retiring to Spain are attracted not only by a warm climate and Mediterranean lifestyle but also by free access to a well-regarded health system, with London ultimately picking up the bill by refunding Madrid for their health costs. It is unclear if that EU-mandated arrangement will continue as the issue is likely to become tangled in divorce negotiations set to begin by March. Pensioners meanwhile worry they may have to return to Britain's stretched health system, another example of unintended Brexit consequences rippling across Europe...’. Excerpt from an article from Reuters.
Which EU Country Has the Most Citizens Living Abroad? Metrocosm (July 2016) says the UK with 4.6m citizens living elsewhere...
Brexit, the US, Europe, and the Populist Model
by Andrew Brociner
There are many important comparisons one can make between the UK referendum vote and the US elections. Both winning campaigns involved leaders who portrayed themselves as underdogs against the establishment, in the UK against the EU, and in the US against the political elite; and both were populist. This approach transcends conventional societal or political categories, such as class or ideology. This is what the people today wanted to hear, leaders who challenge convention, and, as was evident, they did just that, sometimes in objectionable ways. But the point is that it had to be anti-establishment. This is why someone like Clinton could not win – she was too cosy with the politicians, the bankers and the journalists. She represented the establishment and all its corrupt ways. She could not fight against anything because she was the thing itself. But if we consider Bernie Sanders, he checked all the right (sic) boxes: he was an underdog against the system, anti-establishment, and populist too. If he had got the nomination, he likely would have won.
Based on this logic, the underdog represents the people, but it could represent any number of sub-groups: the poor, the working-class, the middle-class, or some combination thereof. They fight against a power, which also can be made up of many things: bankers, politicians, the two-party political system, etc. And they fight for some cause, which can be anything: immigration, poverty, abandoning the European Union, etc. Mix these ingredients together and add a pinch of inflammatory rhetoric, according to taste, and violà: you too can construct a fool-proof winning campaign. Note as well that political ideology does not enter the picture. This type of approach goes across and even divides parties, as was evident both in the UK, with Tories taking either side, and in the US, with Republicans, many of whom did not support their party's candidate.
This is the politics of today: it is like taking the old Marxist class struggle, pitting the proletariat against capitalism, and going beyond it, to encompass different classes, different powers, and different causes. This is what gives it its broad-based appeal. When you think about it, Sander's campaign remarkably got it right – he read the times. But, the Democratic Party went with the status quo instead and lost the elections.
If we extend this comparison to politics in Spain, we can note that the Podemos party is in fact acting as an underdog against the political and financial elite, and using anti-austerity as its cause; in much the same way as the Syriza party did in Greece. They are fighting for the people undergoing unnecessary hardships against an established elite, namely, the Troika. Anti-austerity is the cause of the day, which could be changed as conditions change. These more radical left-wing parties too challenge a political power, the conventional duopoly of a two-party system, either slightly left of or right of centre, offering “a third way.” Being new and radical left, they challenge the neoliberal capitalist approach that centrist parties have espoused, and in this context, acquiescing to the demands of austerity.
There are, of course, populist far right wing parties across Europe trying to do the same thing: unify a heterogeneous body of people against some perceived elite and fighting for some cause. The FN does just that in France, using anti-immigration and anti-European causes. In the same way as in the US elections, putting America first, the FN wants to put the French first, as do all of these far right parties. In other countries, such as the Netherlands, they are trying the same thing too. It is regrettable that the plight of the migrants and the asylum seekers has played into the hands of the far right, using anti-immigration as one of its causes. The causes they are fighting for change, the power they are fighting against changes too, but the political populist model is the winning ticket.
An article in The New York Times about the scars from the Spanish Civil War: ‘“In Spain,” wrote the poet Federico García Lorca, “the dead are more alive than the dead of any other country in the world.”...’. Some interesting comments here.
‘The New Atlético de Madrid stadium to be christened ‘Wanda Metropolitano’. The Chinese company will provide name for new ground after signing deal with soccer club’. Headline at El País in English.
There was heavy flooding on the Costa del Sol earlier this month: ‘The central government has declared a civil emergency in the Andalusian provinces of Málaga, Cádiz, and Huelva following last week's heavy rainfall. In Málaga province alone, some 6,000 people across 20 municipalities have been affected by the flooding. Government spokesman Íñigo Méndez de Vigo stated following the declaration that it is now down to the provinces to make their own assessment of the damage "to speed up procedures and get assistance out in a fast and effective manner."...’. From Sur in English. There’s more heavy rain in the Med this week!
IVA on digital books, magazines and newspapers is to fall to the super-low rate of 4% from January, joining their traditional print versions, says the Minister for the Economy here.
‘Charge the 'rich' to feed the poor: Madrid's Robin Hood homeless cafe. Charity restaurant makes money from customers by day to offer homeless people a dignified dining experience by night.’. Headline from The Guardian about an initiative by the wonderful Padre Ángel to feed the homeless.
‘Spain’s R&D Ranks in an Unpretentious Second Division’. Headline at The Corner. The article notes: ‘...Spain has lost 11,000 researchers in the last six years, according to the National Statistics Institute. The Spanish Scientific Research Council, the biggest scientific organisation in the country, has lost 4,000 employees since 2011, a large part of them young researchers...’.
‘Spain joins a relatively exclusive list of 22 countries where it is possible to buy a Tesla electric car. Through the company’s website – it says it plans to open showrooms next year in Madrid and Barcelona – it will be possible to arrange a test drive and order an upscale Model X, starting at €103,000, along with the more economically priced Model S, which comes in at €80,100, with delivery taking around three months...’. From El País in English.
Spain is to maintain its ‘Terror Alert’ at ‘four’ over the Christmas period, reports El Mundo here.
‘Spain has hundreds of towns that ooze charm from their medieval walls to their wooden balconies bedecked in brightly coloured geraniums. But only a few are credited with being quaint enough to win a coveted spot in the Association of the Most Beautiful Towns in Spain...’ Well, 57 towns to be exact (including 13 newcomers). The list is at The Local here.
The Spanish TV condom joke... YouTube, here.
Business Over Tapas 15 December 2016 Nº 187
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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