By the look of things, the month of June should end in an interesting way. First we may see the end of the UK’s membership in the European Union, depending of course on a referendum to be held on Thursday June 23rd. Not many of the two million or so British expats that live in Europe (who might be expected to be the most affected by a ‘Brexit’) will be voting in this exercise. In Spain, we British expats are anything between 270,000 (the INE figure) and 800,000 (preferred by the British media). If there is a Brexit, and Britain exercises its sovereign rights to penalise in any way those EU foreigners who live or work or study there, withdrawing from them any of their privileges hitherto afforded a citizen from a fellow member-state, then we can be sure that the Spanish authorities will retaliate (especially if they accept the INE figure as gospel). We have no spokespeople; we have no representation; we have no champions. Will a ‘Brexit’ occur? Probably not – but our existence will have no sway on the reasoning behind the vote. Britain may have sent a fleet to save 2,900 Falkland Islanders, but it won’t lift a finger for its expats.
The second event pencilled in for June is a probable General Election in Spain. The PSOE and Ciudadanos have arrived at a deal which will be presented to Parliament on March 1st and 2nd. This deal does not have a majority backing and, in a second vote three days later, on March 5th, it will almost certainly not be accepted thanks to abstentions from the PP and Podemos – the two parties who (perhaps unrealistically) think that they stand to gain more support from a fresh election. The date for this would appear to be June 26th.
‘Cost of living in Spain: gulfs between cities revealed. New research has highlighted sharp differences in the prices of properties, goods and services in the country, which is home to 770,000 British expats...’. The Telegraph reports on the variable cost of living in different cities in Spain (most expats live away from the cities in small towns or villages).
‘According to a recent report published by Bankinter, the demand for housing in Spain will continue to grow, reaching up to 420,000 home sales in 2016 and up to 450,000 in 2017, and that the price increases shall not exceed 3% on average, or 5% for those in the best locations...’. More at Kyero.
The British pound is falling against the euro following the announcement of the Mayor of London that he will be supporting ‘Brexit’ in the referendum to be held on June 23rd. This will no doubt affect sales to British buyers in Spain.
Andalucía: again, those rules for renting out your spare room, or apartment. This time, the list comes from Andalucía.com blog. Is this new law designed to protect the tourists, or is it rather to protect the Big Players in tourism from small-scale competition? (I wish I knew). By the way, the full 6,200 word rule from the Junta de Andalucía (en castellano) is here.
Hacienda is pleased to report that they managed to recover an extra 15,600 million euros in 2015 in their efforts against tax-evasion: 27% up on 2014. The story at El País here.
One way to attract investment is for the authorities to boast of how cheap employment costs are. Wages are very low here in the Canaries, says a promotion for bringing industry to the region. Workers receive 2,104€ gross average against 2,580€ across Spain. The Canary Government should be working for better wages, not cheaper ones, says the local leader of Podemos with some justification. Story here.
While we don’t see many 500€ notes here at Business over Tapas, it appears that 75% of all money in circulation in Spain is with these bank-notes: or 34,000 million euros. A spokesperson for Hacienda says that around a quarter of all business in Spain is now ‘black’ and a small stack of 500€ bulls is just the ticket...
The PSOE leader, Pedro Sánchez, has come to an agreement with Ciudadanos to suggest a minority government in the Cortes (now rescheduled) on March 1st. The agreement must first get past the PSOE militants. The coalition would need a majority vote (impossible), or, the following day, a simple majority with abstentions from the other parties (unlikely). Sánchez is nevertheless looking for other party support to strengthen his hand. Reports from El Huff Post here and El Mundo here. Podemos says it won’t support any agreement with involves either Ciudadanos or the Partido Popular. If all fails, a whispered comment from Mariano Rajoy to Britain’s David Cameron suggests fresh elections for June 26th.
The other parties who have been negotiating with PSOE – of course Podemos, but also IU and Compromís – have all broken off talks with the socialists.
Juan Martínez Majo, the President of the Diputación de León, is one senior PP politician who thinks it is time for Mariano Rajoy to give way to a new leader within the party as candidate for president. ‘Rajoy is a great leader, but perhaps he should give way to allow a strong government with a broad consensus’, he says in a radio interview.
Mariano Rajoy has been declared as a ‘persona non-grata’ in his home city of Pontevedra. This embarrassment comes from Rajoy green-lighting the continuation of a smelly wood-pulp factory in the city, located on public ground, for another sixty years...
The group called Manos Limpias (Clean Hands) is an association that spends most of its time in litigation – against Podemos, the princess Cristina and anyone else that offends it. It is a far-right group that is now seeking to form a far-right political party along the lines of France’s Front National since ‘we can attract the support from the disenchanted conservatives and nationalists from the Partido Popular’. A suggestion is to call it ‘Federación Identitaria Española’, says Público here.
The Junta de Andalucía and the acting Madrid government are in agreement. After ten years of litigation and time-wasting, the Hotel Algarrobico (Carboneras, Almería) must come down. The costs will be seven million in demolition and the possible compensation to the owners of a further 70 million. Greenpeace says: ‘not one penny must go to the builders’. Here are some other algarrobicos sullying the Spanish coast, says El Diario...
From El País in English: ‘Unease grows among ranks of Popular Party over corruption cases. The continuing corruption cases affecting the Popular Party (PP), and the leadership’s response to them, are creating a climate of discouragement in traditional conservative bastions such as Madrid and Valencia. “How do you explain this to people?” said one high-placed member of the Valencian PP bitterly...’.
The acting Interior Minister, Jorge Fernández Díaz, wonders ‘with all due respect to the judiciary, why are just PP corruption cases being discovered and discussed by the media?’ Story and tape at La Razón. The reaction was swift: ‘Judges and police react against the accusation of partiality on the part of the acting minister’, says El Boletín.
The ABC (conscious of the corruption within the PP) has an article about the PSOE-Andalucía, where it bewails the 275 accused and none sentenced in the ERE Case. ‘The PSOE benefits from this long drawn-out and badly handled case’, says the newspaper.
‘An average of 5 people every single day were arrested last year on corruption charges. A whopping 7,140 were nicked during the last term of government for doing things they shouldn’t whilst in power. And the very way that fact was released today, with the current political situation in Spain, sort of shows that the mindset hasn’t changed. 2,442 of these were taken down to prison last year alone. As for organised crime, 69,000 have been investigated over the last four years of which 25,000 were arrested...’. More on this at David Jackson. A similar story in the ABC here. In another report, El País has a graphic of the cases of fraud within the social security system.
The previous vice-mayor of Valencia Alfonso Grau (and right-hand of Rita Barberá) was arrested on Monday by the Guardia Civil as part of the inquiry into the PP-Valencia for corruption and money-laundering.
China on Thursday urged Spain to "safeguard the legal rights and interests" of employees of Chinese megabank ICBC, following their arrest by Spanish authorities on suspicion of laundering tens of millions euros. Spanish police searched the Madrid branch of ICBC on Wednesday, arresting five of its directors as part of a probe into the suspected laundering of at least €40 million. "We hope that the Spanish side would deal with the relevant issue in accordance with the law and honestly safeguard the legal rights and interests of Chinese companies", foreign ministry spokesman Hong Lei said during a regular press briefing...’. Story at The Local.
The disgraced mayor of Alhaurín el Grande has finally stepped down after years of corruption. Juan Martín Serón finally accepted his days were numbered after a vote of no-confidence was tabled for this week by all rival parties, including the PP, PSOE and the IU. Story at The Olive Press. Another mayor to go this week is Rogelio Mena from Albox in Almería for procedural irregularities. .
‘The president of Catalonia, Carles Puigdemont, vowed to press onward with his government’s diplomatic efforts, stating that Raül Romeva will continue to serve as Catalonia’s minister for foreign affairs. Puigdemont’s statement comes after the Spanish constitutional court’s suspension of the Catalan foreign ministry following the court’s agreement to take up the challenge brought by the Spanish government...’. From Vilaweb.
An interesting article at El Confidencial asks why Andalucía is such a hopeless mess, with high unemployment and little chance of improving things – yet so stuck in its past. ‘...in Andalucía, if you don’t have a god-father, you don’t get ahead. It happened in the XII Century, it happens now...’.
The Supreme Court rules that the Hotel Algarrobico was built on non-urbanisable land. The story plus video at RTVE here.
How to stop the lawyer and accuser of Princess Cristina from asking questions in court in Palma? Why, you could accuse the lawyer in question, Virginia López-Negrete, on the same day, at the same hour, in another court in far-off Madrid. The sorry story at El Español. Indeed, the only thing that would be worse would be a recent picture of the chief prosecutor sharing a glass of wine with the lawyers for the defence. But, wait, what is this?
The ex-President of the Caja Castilla La Mancha (and ex-deputy for the PSOE)Juan Pedro Hernández Moltó has been sent down for two years for improper banking practices.
‘British expats in Europe have stepped up their campaign to stay in the EU amid fears that a Brexit would see them lose key rights and benefits overnight. There are thought to be more than two million UK nationals living across the EU. As long as Britain remains in the union, they have their pension and health care rights protected. They also have the right to live, work and own property in Europe, and claim social security benefits. However, in the event of a Brexit, these advantages would be up for renegotiation – possibly on a country by country basis – leading to months of uncertainty...’. From The Telegraph. The referendum will be held on June 23rd.
‘What will happen to the estimated 2.2 million Brits who live in the EU, and the further one million who own holiday homes there?’, asks A Place in the Sun (interesting conclusions).
The BBC asks: ‘UK and the EU: Better off out or in?’ In a rare nod towards the expats, there is even a small section titled: ‘What would happen to Britons working in Europe, and EU citizens working in the UK?’.
‘Withdrawal from the European Union’ – a useful post at Wikipedia on the rules here.
Breaking News: Summary of the Overseas Voters Bill 2015-16. ‘A Bill to make provision to facilitate an increase in the registration of voters resident overseas who are eligible to participate in United Kingdom Parliamentary elections; to extend the criteria for eligibility to register as an overseas voter; to enable those registered as overseas voters to cast their votes through use of the internet; and for connected purposes’.This Bill is expected to have its second reading debate on Friday 26 February 2016. From Parliament.UK
Finally (at the risk of over-reporting this subject), here is a rare article from the expat press about what might happen to the British living in Europe. It comes from the French freebie called Connexion.
Spain is the European country that has seen the highest increase in CO2 production – up 4% over 2014 – says El Ventano, and lists the names of the biggest polluters, starting with Endesa, followed by Gas Natural Fenosa, EDP España, Repsol, ArcelorMittal, Cepsa, Viesgo, Iberdrola, Cemex, Petronor (a branch of Repsol) and Cementos Portland.
The British Spanish Society in London celebrates its centenary today (Thursday).
The unused airport at Ciudad Real is for sale. It cost 450 million to build, and it could be yours for just fifty million. Story at El Mundo here.
The Catholic Church in Spain has had enough: the cranes that make their nests on church towers are threatening the state of these sometimes delicate attachments and the Church wants them gone. Unfortunately, the Law is with the birdies, and it is far from easy to have their nests removed.
An interesting new magazine and website has started in Spain, aimed at the elderly. Twelve million Spaniards are over sixty years old. Welcome to Senioradvisor.club.
Oops: the Matrera castle in Villamartín (Cádiz) has got a remarkably poor repair (picture).
Benidorm, evidently worried about its British and Irish visitors looking the wrong way when crossing a street, has painted ‘Look Left’ on its zebra crossings. ‘...Council chiefs in the Spanish city said the idea is to reduce the number of accidents, especially at night-time when holidaymakers who have had too many drinks look the wrong way before crossing...’. The story comes from The Daily Mail.
Spain...? or Portugal. ‘The Portuguese Non-Habitual Residency status enables those who become tax resident in Portugal, and are accepted as NHR, the opportunity to receive qualifying income tax free both in Portugal and in the country of source of the income.
The NHR regime represents a major step forward in making Portugal a tax free jurisdiction for individuals in receipt of qualifying non-resident income. Qualifying income includes pension, dividend, royalty and interest income...’. From Non-Habitual Residents here.
The insider's guide to the best wine bars in Barcelona: from The Local, here.
‘Spain has its fair share of Mediterranean passion, spice and beauty — not to mention some of the most gorgeous sunsets, natural parks and villages on the planet. I should know: I met and fell in love with a Spaniard on the dimly lit streets of Seville, elbow-to-elbow as he ordered me new foods or we zigzagged the country in his car...’. Five romantic holiday spots in Spain, from Sunshine and Siestas.
The Housing Sector: Sales
by Andrew Brociner
We have been looking at the housing sector and have seen that as far as prices are concerned, although there are significant regional differences, we are still, on a national level, consolidating. This week, we begin to look at some of the factors behind the prices and we begin by house sales.
If we look at the total of houses sold, both old and new, for the nation as a whole, we can see that house sales are perhaps beginning to pick up slightly, but are still generally quite low. If we compare this to the boom period, in 2007 an average of over 64,000 houses were sold a month, with a peak in one month of over 83,000 units. In 2008, this was already down to 46,000 units a month and by 2009, to 34,000.
Demand continued to decrease after that. The years 2012, 2013 and 2014 showed a remarkable steadiness at about 26,000 units sold on average per month, but at this point, sales were about one third of what they were during the boom. In 2015, 29,500 units were sold on average a month. It appears that, as with prices, we have bottomed out and are possibly at the very beginning of an increase. But also as with prices, we are a long way away from where we were. In addition, in the last three months of 2015, sales tapered off again. Of course, at this stage, we need to see more data to assess whether there is really an increase taking place.
We could look at a few regions as we did when we considered housing prices to examine the issue further. Looking at Andalucía, we see that we are still inside a range that we have been witnessing for the last five years. This is similar to the nation as a whole. We definitely need to wait for the 2016 numbers to see if we break out of this range and to assess whether sales are showing any trend.
If we look at the regions of Cataluña and Madrid, we find that sales are picking up somewhat, although as we have seen, the prices in these two regions plummeted so far that people seem to be capitalising on low prices.
Here we can see that there are some signs of an increase in house sales, especially in Cataluña. However, while the number of house sales for the two regions are quite similar, houses sold in Madrid are at one half of what they were during the boom, whereas in Cataluña, they are still at one third.
Looking at data for the Baleares, we note an increase in house sales taking place and, as we have seen, in prices as well.
While this region does show signs of an increase, at 3% of the total sales, it is too small to make any impact on the nation as a whole. Again, it would be better to see if this increase will be sustained.
House sales are reflecting the movement in house prices to a certain extent: the national average is still flat and so are the prices. Andalucía is representative of this national average with both sales and prices more or less on par with the nation as a whole. In Madrid and Cataluña, some more sales are taking place and it is in those two regions where the price increases are above the national average, but again, their decreases after the boom were greater. The Baleares are also showing signs of an increase in sales, but the region represents only 3% of total national sales.
The data on sales confirms what we have seen on the price of housing, that we seem to have bottomed out in 2014 and are starting to pick up slightly in some areas, but as the housing market in Spain is heterogeneous, with some areas showing growth while others continue to decline, we are still in a phase of consolidation overall.
Death knell rings for unregistered tourist properties in Spain. In reality it's another death knell against tourism - do these "not very clever people" know the effect of withdrawing 400,000 beds from the (already declining) (up) market tourist business, as their owners take fright?
Do they not understand that the issue is about collecting taxes and not about shutting down tourist accommodation facilities? Doubtless as a result of some of these stupidities some of us around the Marina Alta are now suffering the worst (fully legalised) holiday bookings for 20 years. But all these non-tax-paying rental properties in Andalucía are on websites (Hello! Do they know that this is where the business is generated?). All that is needed is to set up small offices and use the web to start calling and/or e-mailing their owners.
This would produce immediate reactions (producing volumes of work greater than the monoglot, and "not very clever", Hacienda could possibly cope with!) - but, more importantly, not a single tourist would be stopped coming to Spain.
If tourists cannot find villas they do not go to hotels with their families (far too expensive) - they go to another country!! Will these people ever understand?
Hassled for unnecessary repetition of cedulas (every 5 years and at a scandalous price) - the doubling of basura taxes in under 5 years - crooked activities by the public services (we all know who they are) .... I, too, will leave Spain when I can.
There's always something stupid being done - but no surprises here, as there are a lot of not very clever people around..... and do we not read that Andalucía is No.2 in the Spanish corruption stakes (after Murcia) ? And they are getting caught, so clearly they ain't very clever ..... Q.E.D.
Now that the die is cast, will you be advising your readers how to vote in the up-coming referendum? By how, I mean what steps must one take to have the vote, assuming that there are some residents who haven't been resident for 15 years.
It would be a catastrophe for the expats to ignore what could be life changing decisions by omission.
This is the country we have chosen to live in and enjoy the culture and language.
It is in our interests to make our views known at the ballot box, by post or proxy.
We must not allow the disinterested majority to put our futures in jeopardy.
‘Forget the Macarena - it’s time to update Spanish music’s international rep’. Article and music links at the El País English-language blog Trans-Iberian here.
Business Over Tapas
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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