Business Over Tapas 16 February 2017 Nº 196

16 Febrero 2017  Sección; Especiales 705 votos

Editorial:

The Instituto Cervantes, Spain’s cultural agency abroad, ‘...is the institution created by Spain in 1991 to promote, teach Spanish and spread the culture of Spain and Spanish-speaking countries. The headquarters of the institution is now in Madrid, although it began in Alcalá de Henares: the hometown of the writer Miguel de Cervantes...’. In fact, some branches of the Instituto Cervantes offer courses in all of Spain’s official languages – castellano, catalán, galego and euzkera – to foreign students out of its total of seventy five offices worldwide. The first to offer these languages to students was the Dublin office (then known as the Instituto Cultural Español) here back in 1975. Curiously, it is almost impossible to study regional languages in other parts of Spain, whether in language institutes or universities. In November 2015, José Antonio Sierra at La Opinión de Málaga asked this very question – ‘why can’t we take classes of Catalán?’ Now, two years later, things are beginning to change, and the schools themselves are asking whether there is enough demand. Perhaps a better understanding of the different languages and cultures shared by Spain would contribute to easing regional tensions.

Just this week, the PSOE has proposed a new (and perhaps a trifle silly) law to push for translators of the co-official languages in Spain in all public departments and for citizens to be able to ask for Officialdom to deal with them in any of the aforementioned languages.

To return to our subject, the Instituto Cervantes is worth visiting if one is nearby, as no one enthuses more about his subject – here Spain – than an expert – and where better to find one than in a cultural centre? Each office holds a useful library and offers meetings, congresses, film, concerts, exhibitions and other entertainments, although its main thrust has always been to promote the Spanish language. Unfortunately, two years ago this week, the local Gibraltar branch was abruptly closed by the previous Minister for Foreign Affairs, José Manuel García Margallo, since ‘everyone except the apes speak Spanish in Gibraltar’. Of course, if Gibraltar were to become Spanish territory, then English would no doubt become another co-official language of Spain (heh!)...

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Housing:

As always – mixed signals in the property world.

From The Local, ‘Why now is the right time to buy a property in Spain’. Spain, says the article ‘...is the second-best country (after the United Arab Emirates) for first-time buyers, according to a new report’.

Brits are selling Málaga homes in record numbers since Brexit. Málaga province has seen a 16.5% increase is Brits selling up. The data was collated from estate agents by the Colegio de Administradores de Fincas de Málaga y Melilla, a government owned corporation that represents property professionals...’. From The Olive Press here.

In Almería, the Brits remain as the largest foreign house-buying market, with 20% of all foreign buyers, and showing a modest 2.5% growth over 2015 (with 400 homes bought), says La Voz de Almería. In all, 9,276 homes were sold in 2016 – 1,855 to foreigners.

The costs of buying a property in Spain have been well documented (but it’s typically 11 to 14 per cent, for the record). What many people fail to consider in the excitement of buying their dream home in the sun are the costs of being a property owner. The key to avoiding surprises is to make sure that your independent Spanish lawyer advises you of the estimated running costs before you commit to purchasing a property...’. From A Place in the Sun.

From Mark Stücklin’s Spanish Property Insight, ‘House prices rose the most the end of last year in regions popular with tourists, reports the Spanish daily El País. The Canaries, the Balearics, and the Valencian Community were the regions where property prices increased fastest in last quarter of 2016, according to a study by a real estate listings aggregator...’. More here.

City prices for second-hand homes fell slightly by 0.7% in 2016, says Idealista here. A map shows that there is a great variation according to the region involved, with Catalonia and Andalucía generally up, and Madrid and Galicia down.

Spain has the dubious honour of being fourth in the world in the number of vacant homes. Malta leads with 18% of all the houses on the island empty; Mexico and Greece follow, and Spain is next, with 13.66%. The figures: 25,208,623 homes in Spain, with 3,443,365 empty.

Lawyer Raymundo Larraín Nesbitt takes us step-by-step through the legal procedure to buy property in Spain from a private vendor, also known as For Sale by Owner (FSBO)’. A useful article provided by Mark Stücklin here.

A number of British families in Almería have now been able to obtain escrituras on their hitherto ‘illegal’ homes, following changes in the LOUA, the Andalucía planning laws. A report at El Almería features three British families who had to wait ten (anguished) years to get their paperwork.

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Tourism:

The offer of aircraft seats to the province of Málaga from airports in the UK points to a 15 percent growth in 2017 compared to the previous year despite any effects from the Brexit. So says the provincial diputación, adding ‘around 3.5 million places to the Costa del Sol are on offer this year, a third of which will depart from the capital, London...’. The story comes from 20 Minutos.

The British Ambassador expects no decrease in Costa del Sol tourism post Brexit, agrees the Spanish News Today here.

News from Germany: vacations to Mallorca and the Canaries are running out. Apparently, everything’s been sold for the season!

The cost of package holidays to Spain have increased by 9% as more and more holidaymakers avoid rival destinations amid terror attack fears. Travel group Thomas Cook says a fall in demand for holidays to Turkey and Egypt due to safety concerns means a focus on selling ‘quality over cheap’ holidays has led to a price surge...’. The Olive Press reports.

The Consell de Ibiza is studying a plan to charge tourists (visitors) a canon to use the roads on the island, says Preferente here. Evidently, the roads are full and not enough for the enormous strain put on them by the millions of visitors to the islands. Whether this would include those large groups of cyclists that winter on the islands is not clear...

The Russian Tourism Industry (RTIU), warns of the chaos in the processing of visas for entry to Spain for Russian tourists, on the eve of the summer holidays. In a letter addressed to the Spanish Ministry of Foreign Affairs, the agency shows its concern – which originates from the granting of these formalities to the Indian company BLS International. The management of entry permits to Spain has become chaos since this service was taken over by the Indians...’. From Preferente. Cancelations of holidays have already begun.

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Seniors:

A useful article at Jubilación explains how to get a pension no contributiva, a basic pension in Spain.

A useful travel tip for the over-sixties, in English, from Renfe: ‘If you are 60 years old, make the most of the advantages and convenience of travelling by train and apply for a Tarjeta Dorada card. This card will entitle you to purchase tickets for any train and class. On Mondays, Tuesdays, Wednesdays and Thursdays you will receive a 40% discount. On Fridays, Saturdays and Sundays the discount will be 25%...’.

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Finance:

Spain’s three biggest banks, Banco Santander, BBVA and Caixa Bank, have got off to a flying start this year having issued €8.6 billion in new debt, seven times the amount they sold during the same period of last year. The last time they rolled out so much debt so quickly was in 2007, the year that Spain’s spectacular real estate bubble reached its climactic peak...’. From Wolf Street here.

El Mundo titles an article: ‘Donald Trump and Brexit – the two biggest challenges for Spanish markets’.

Spain’s stevedores have warned of more strikes if the reform of the ports sector is approved without agreement. Strike dates have been set for 20, 22 and 24 of February and if the Cabinet passes the reform in their meeting on Friday they will set more dates for a longer stoppage, according to Antolín Goya, the main coordinator between the main unions in the sector, the Coordinator of Sea Workers. If all the ports in Spain were closed it would cost 50 million € every day’. From Typically Spanish here. At the last minute, the Government is rethinking its planned reforms says El País late on Wednesday afternoon...

The Spanish Congress is almost certain to approve the creation of a special committee to investigate the banking crisis and the bailout of Spain’s struggling savings banks. In January, the Audit Court released a report showing that up until December 2015, the cost of restructuring Spain’s bankrupt savings banks had totalled €60,000 million, of which nearly €41,800 million was paid for by taxpayers...’. From El País in English.

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Politics:

Pablo Iglesias, leader of Podemos, on Sunday reasserted his control over the Spanish protest party with an easy victory in a vote to choose the secretary general. With 89% of the vote, Iglesias comfortably defeated his rival for the post, Juan Moreno Yagüe, a little-known deputy from Andalucía. Just as importantly, Iglesias will maintain a 60% hold on the leadership council with 37 representatives of his leftist views now sitting on it. The outcome deals a serious blow to his more moderate deputy Íñigo Errejón, who only managed to put 23 of his own people on the council...’. From El País in English here. ‘Podemos leader tightens grip on Spanish party after landslide re-election’ – headline at The Guardian.

Detectives working under the orders of the retired Second in Command of the Police Eugenio Pino, creating a false trail against Pablo Iglesias called the ‘Informe PISA’ (“Pablo Iglesias Sociedad Anónima”), remain working for the Ministry of the Interior, says Público.

The PSOE remains rudderless and divided until their Congress slated for the 17th and 18th of June. Three candidates, Pedro Sánchez, Paxti López and Susana Díaz. Susana, president of the Junta de Andalucía, is the hungriest, and ‘el susanísmo’ is now a massive mobilization to attract supporters in general and, at the moment, socialist mayors – ‘this hasn’t even started yet’, enthuses Abel Caballero, the mayor of Vigo. A report at El Independiente here.

The Minister of the Interior says his ministry has lost various crucial archives – including the one over the 11-M, the March 2004 train bombing in Madrid where 192 people died. What else might be missing asks El Ventano.

A study at the Real Instituto El Cano proves of interest: ‘The Spanish Exception: Unemployment, inequality and immigration, but no right-wing populist parties’. It’s presented in English.

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Corruption:

From El País in English: ‘Rodrigo Rato, a veteran Spanish politician who served as an International Monetary Fund (IMF) chief and senior government official with the governing Popular Party (PP), evaded €6.8 million in taxes between 2004 and 2015, according to a report by the Tax Agency’s fraud investigation unit to which EL PAÍS has had access. In a 634-page report filed in court on January 23, the National Fraud Investigation Office (ONIF) details the alleged unlawful activities by the network of companies owned by Rato in Spain and abroad...’.

Spain’s central high court, the Audiencia Nacional, on Monday issued orders to summon former Bank of Spain governor Miguel Ángel Fernández Ordóñez (Wiki) and other financial watchdog figures for questioning over their role in the Bankia flotation fiasco of July 2011. The court sees “multiple, sufficient and concurrent evidence of criminality” in the way the lender was managed following the merger of seven struggling savings banks, chief of them Caja Madrid, into BFA-Bankia...’. From El País in English here. Another take on the Bankia mess is over at The Corner: ‘Ex-Bank of Spain governor will testify in Bankia case despite successor’s attempts to justify’ here. Three senior Bank of Spain directives have already resigned over the direction of the investigation (here), while, in politics, the PSOE is understandably not keen to see the Bankia case prosper at all, and is searching for a political way of stalling the investigation, says VozPópuli here.

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Catalonia:

‘“An impending train crash.” Those are the words increasingly being used to describe Madrid’s seemingly intractable conflict with Spain’s separatist north-eastern region of Catalonia. The latest flashpoint in tensions is the political show trial of Catalonia’s former president, Artur Mas, and two other Catalan politicians for their role in organizing a purely symbolic, non-binding referendum on national independence in November, 2014...’. The story is at Wolf Street here.

From The Local: ‘Spain's Constitutional Court quashed on Tuesday a resolution by Catalonia's regional parliament calling for a referendum on independence this year, a ruling that will further stoke tensions with Madrid. The parliament of Spain's wealthy, northeastern region, which has a majority of separatist lawmakers, had adopted the resolution in October, pledging to hold a vote in September 2017. But after suspending it in December, the Constitutional Court in Madrid said Tuesday that it had cancelled it altogether, ruling it "unconstitutional"...’.

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Gibraltar:

From La Voz de Galicia: ‘The time of threats against Gibraltar is now over. The Government is convinced that Brexit is a golden opportunity to convince the colony to accept, once and for all, Spanish co-sovereignty over the Rock. The Ministry of Foreign Affairs has a very advanced plan to gather the support of Gibraltarians on the basis of persuasion. A very detailed road map mixes the traditional promises of self-government if Gibraltar accepts the Spanish flag, with the guarantee that the government would make millionaire investments in infrastructure to turn the colony and its surroundings into one of the biggest development areas of the Spanish Peninsula...’.

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Courts:

With some understandable relish, the Cadena Ser reports on ‘The PP, the first party to sit on the accused bench in the history of Democratic Spain’. The case is about the Gürtel Inquiry (below). In another report from the same source, the prosecution has ‘...told the jury to assume that the Partido Popular profited from the Gürtel’. The PP has refused to answer the charge.

Six businessmen have admitted to the Anti-corruption Prosecutor that they illegally financed the PP in Valencia in 2007 and 2008, joining three others who had previously admitted their participation. They hope to reach a reduction in their sentences with these admissions.

Three leading figures in the Gürtel case, a major political corruption scheme affecting Spain’s ruling Popular Party (PP), have been sentenced to 13 years in prison each by the Valencia region’s High Court. Francisco Correa, considered the mastermind behind the bribes-for-contracts network, and his aides Pablo Crespo and Álvaro Pérez, aka El Bigotes (the Moustache), were found guilty in connection with a section of the Gürtel case known as Fitur, involving embezzlement, influence peddling, bribery of public officials and conspiracy in the Valencia region...’. From El País in English.

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Brexit:

...Theresa May is facing renewed protests over her handling of Britain’s withdrawal from the EU after a leaked document warned that British nationals living on the continent could now expect a backlash as a consequence of the government’s treatment of foreigners since the Brexit referendum. The prime minister was accused of creating needless anxiety for British expats as an EU assessment of the legal impact of Britain’s withdrawal, obtained by the Guardian, revealed that the 1.2 million Britons living in the EU could pay the penalty for the prime minister’s failure to offer a secure future for EU nationals in the UK. From a report from The Guardian titledBritons living in the EU face Brexit backlash, leaked paper warns’. This one is all over Facebook today. In reality, Spain (for example) is not going to treat the ex-pat Brits who live here any worse than they do any other non-EU nationals. That may mean visas, work-permits and 'sufficient funds', but it won't mean deportation as an institutional instrument. We may, however, have to worry about what the Spanish voters (our vecinos) think – and, yes, it could become ugly...

The Local reports of efforts by British ex-pats to improve their image with Spaniards here.

From The Olive Press: ‘...Labour leader Jeremy Corbyn insisted that the aggressive approach of the Tory Party is putting ‘families, jobs and homes in the balance’ and showing the ‘human cost’ of Brexit. He urged the government to act swiftly to end migrants’ and expats’ uncertainty and guarantee their rights to remain in their countries post-Brexit. “There must be an end to this Hunger Games approach to Brexit negotiations, which gives no consideration to EU nationals in our country or British nationals living abroad,” Corbyn said....’.

From The Independent: ‘The European Commission is being asked to consider issuing EU passports to British people in danger of losing their right to free movement after Brexit. The Commission will be forced to consider the proposal if a million EU citizens from across the bloc put their names to an EU citizens’ initiative backing the proposal. European Union citizens’ initiatives were introduced by the Lisbon Treaty in 2012 to allow EU citizens to help shape the union’s policies through direct democracy...’. The petition is here. The same source prints another article on the fears of the British ex-pats in Europe: ‘Four out of five British expats fear they will have their automatic right to live abroad stripped from them after Brexit, a survey shows. The UK Government has consistently said it will not act unilaterally to guarantee the rights of three million EU citizens to remain in the UK until it has agreement that the EU 27 will do the same for the estimated 1.2 million Britons living elsewhere in Europe...’.

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Media:

Público notices that, following the two congresses held this past weekend, the mainstream Spanish press is saying that ‘Rajoy is elected’, while, over at Podemos, Pablo Iglesias ‘takes control’, with ‘purges’, ‘radical politics’ and ‘hard-line’ solutions. A subtle difference in approach and vocabulary: a manipulation, no less.

Travelling in the EU will soon not be a problem for Netflix, Spotify and other audio or audiovisual services users as new European rules will stop ‘geo-blocking’ of services for short-term visits from 1 January next year. Story at Media-Tics here.

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Economics:

The Housing Sector: the Stock of New Houses

by Andrew Brociner

The stock of new houses has been of much concern since the boom was over. Not only were there far too many houses constructed to meet the prevailing demand, but also that stock has stretched out for so many years since then, given the frenzied pace of construction, that it did not by any means meet future demand either.

The last figure is of 513,848 new houses, which is only slightly less than the year before. It is clear that to roll back the stock of so many new constructions is painfully slow and does not seem to be changing lately either. Accumulating this stock at an astonishing rate during the boom took place in a very short amount of time, whereas reducing it is done incrementally and takes many years.

Indeed, if we look at the change in this stock, we find that there is no increase in the rate at which the stock is being absorbed. Last year, the stock decreased by 4%, while the year before it was 5%, which means it has even slowed down recently. The year before that it was closer to 3%. It is just evidence of the incredibly slow pace at which the stock of new houses is being reduced.

The massive stock of new houses built during the boom showed zero foresight. Not only was the stock built so large that it is taking so long to reduce it, but indeed, as can also be seen, construction kept on going, accumulating new stock until well after the boom was over. They were still adding to this stock as late as 2009, in the sense that there were still more constructions than sales of new houses. It should be pointed out that construction of new houses still goes on, at a rate of about 40,000 a year, but at least it is offset by sales, which does not lead to positive accumulation; it is just that so many of them were built before, that it is taking a long time to reduce the outstanding stock.

There are regional differences here too. The recent demand in Barcelona and Madrid has reduced their stock, along with the ones in Marbella and Palma de Mallorca. At the same time, however, the stock continues to be large and without any significant reduction in places like Seville, and the coast of Valencia and Almería. Therefore, the reduction of the stock of new houses is heterogeneous across Spain, just as we have seen with sales and prices.

It is clear that one must take into account this huge amount of accumulated stock of new houses when assessing the situation of the housing market, since this directly affects the supply of houses, which impinges on prices. This is one piece in the explanation as to why we have been in this state of affairs for so long.

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Various:

Oh Goody – the Hooters chain of ‘brestaurants’ is returning to Spain. The first one will open in Barcelona and another fourteen are planned for Spain in the next few years. El País here.

The Ministry of the Environment is sending inspectors to the ‘Pirate Isle’ (Wiki) which is located two nautical miles off Benidorm, just 27 years after a complaint was originally made against an illegal beach-bar set up on the island, which is also part of the Parque Natural de Serra Gelada. Story here.

Six out of ten women will give up their professional careers to become mothers, according to El País here.

A peculiar (and apparently ‘fake’) page on Facebook is called ‘Britain First – Spain Battalion’. It’s based on the far-right Britain First anti-immigrant group, but in Spain. Funny? – Not really.

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See Spain:

Viajes Público has some alarmingly-named pueblos to show us. Well, Villapene and Los Infiernos are a couple of examples...

Alarming sounding names is one thing, how about an alarming looking way to cross a river? The 1893 gondola hanging Vizkaya Bridge at Eos Mail Box here!

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Letters:

(Commenting on the Tarjerta Dorada) The 'Tarjeta Andalucía Junta sesentaycinco' is very good too, with lot of discounts... optical, hearing aids, legal assistance and more... You need to be 65 and, on the padrón where you live. The card is free. There is also a gold card for those on a low income. This is the form which can be filled in on line or posted. Jill

Hi Lenox,

I see that fruit-tree fungus is spread by mosquitoes...I suggest hanging up nesting boxes for insectivorous birds and not poking down the nests of swallows, martins and swifts as I've seen done here. And few folk won't be coming back to the costas and islas for a while - due to those mozzies. And fumigation kills off the bees...estamos apañados... Jake

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Finally:

We’re not Mexicans’. Spain’s version of the ‘We Come Second’ joke at Donald Trump’s expense... Or would you rather see the candidate for the Eurovision video?

 

Business Over Tapas 16 February 2017 Nº 196

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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