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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January 3 2019 Nº 284
LaSexta has some useful news programs on it, including Salvados with Jordi Évole, and El Intermedio with the oddly named El Gran Wyoming – if you like a little comedy in your reportage, but this commercial TV channel is also plagued with ‘casino’ adverts (and, over the Christmas holidays, endless scent, perfume, cologne or rather ‘fragrance’ adverts. How much of this stuff can you splash on your body?). The casino gambling appears to be configured by computers, with an unexplained bias towards the companies involved. They even give the punter some tokens, free, to encourage them. No doubt Tele5 has similar adverts, but then, who watches Tele5?
And we thought that a flutter on the quiniela, the primitiva, the EuroMillions, the ONCE, the Cruz Roja and the Lotería Nacional would be enough to keep us all in pocket-change. All these and more legal gambles, including an evening down at the bingo, and yet the police will cheerfully raid a bar with a game of housey-housey going on. In fact, the police are even more interested in bars showing football on their TVs without a proper licence, and some 2,000 of them have recently been raided and threatened with fines and prison terms. Perhaps we had been betting on the result.
In one area in Madrid – a poor one, it goes without saying – out of every ten shops and stores, one is a betting shop.
Two out of every ten Spaniards play with sporting bets, to a lesser or greater degree, according to El Español, and without this type of business, the media (including our friends at LaSexta) would lose over 130 million euros a year in advertising.
A report here says that ‘…Spanish-licensed online operators generated revenue of €173.3m in the three months ending December 31, 2017…’. With so much opportunity available for the gaming companies (and dare we say it, money launderers), it’s no surprise that Gibraltar is a major player while both Ceuta and Melilla are eying the advantages of setting up in modest competition. Another report, here, says that the football club Real Sociedad is the only club in La Liga that doesn’t take sponsorship from gambling companies.
Gambling is indeed becoming a problem now, with various advice organisations set up to stop ludopatía (‘…It is a mental illness catalogued as an addictive disorder, in which the person who suffers from it feels enormous needs to play…’), says Nueva Tribuna here.
Between ‘casino’, lotteries, ‘sport betting’ and a quick game of dominoes, it’s a wonder we know how much will be in our wallets come morning.
From France24 comes ‘Concrete skeletons still haunt Spain, 10 years after the 2008 global economic crisis caused a housing boom to crumble, bankrupting developers and dotting the landscape with unfinished projects. But buoyed by an economic recovery, some “ciudades fantasma“, or “ghost towns”, are gradually reviving, such as Valdeluz near Guadalajara, around 60 kilometres northeast of Madrid. Valdeluz was designed as a dormitory town for 30,000 residents near a new station where high-speed trains linking the Spanish capital to the north-eastern region of Catalonia stop, but the lead developer went bankrupt shortly after the crisis hit…’.
A reverse for the Canary Island authorities regarding holiday homes, says ElDiario.es here: ‘The Supreme Court has annulled the decision of the Canary Government to prohibit holiday rental housing in areas classified as tourist, considering that this limitation contravenes the freedom of enterprise and only seeks to “promote the supply of traditional accommodation products”…’.
‘Around 50 million people live outside their native countries (they probably don’t include refugees in this figure), enticed by the many benefits of expatriation. Such an upheaval isn’t without its challenges … an expat survey suggests there’s never been a better time to live abroad…’ An article including some advertorial material comes from The Local here.
Some reflections on Almería tourism comes from Lenox at Spanish Shilling here.
The age for legal jubilación is now 65 years and eight months, says InfoLibre here.
The self-employed (‘autónomos’) are now ‘better protected’ says the Minister for Employment. In an article at La Hora Digital, we read that ‘The new rules on the contribution (‘cotización’) of the self-employed, approved by the Government of Sanchez, provides them in Spain with full and compulsory social coverage, at the same level as the self-employed in Luxembourg and superior to the coverage for workers in Austria, Denmark, Finland and Sweden…’. They now have the right to unemployment benefits that will extend between 4 and 24 months, according to their insurance level. Mind you, it will all cost a little more. ‘…From January 1, the “basic” quota for the self-employed will rise by almost six euros to 283 euros per month, but from now on they will have coverage they have never enjoyed before…’. El País also notes the changes, and warns of high fines to companies for any falsely-employed autónomos.
El Huff Post looks at the various wage, pension, contribución and pay level rises for 2019 here. It also examines the tax-hikes in petrol and diesel, train-fares, and toll-roads. The tax on electricity will remain steady in 2019 and taxes on gas prices will fall.
Work inspectors say they need more staff. The story here.
From ElDiario.es here: ‘The world’s largest vulture fund, Blackstone, has taken advantage of the years of crisis in Spain to erect itself as a brick empire in this country thanks to the acquisition of toxic assets from banks but also from public housing. This is the case that has now been condemned by the Court of Auditors which claims 25 million euros from the former mayor of Madrid Ana Botella and seven members of her government team…’. (More here and here). One of the leading beneficiaries of these vulture funds, says Diario 16, is the son of the abovementioned Ana Botella and her husband José María Aznar, José María Aznar Botella, who partners with Cerberus Capital Management in Spain (Wiki here says the company concentrates on ‘distressed investing’).
El Plural looks at the business of nuclear waste, and finds the husband of a retired PP politician involved in a 37 million euro deal.
The outgoing president of the BBVA has a pension scheme worth 79,700,000€. Jeez, that’s almost what people like Ronaldo are earning annually…
From Jordi Évole’s Salvados interview on LaSexta last week (here): comes the fairy tale:
-Rajoy: “It’s not a rescue. It’s a credit to the bank that the bank itself is going to pay back”.
-J. Moisés Martín: “The cost of the bailout was 60,000 million. We have recovered so far four thousand million. Hopefully we will recover another nine thousand million more”.
Deflation and Demographics
By Andrew Brociner
As seen in the last issue, the inflation rate is showing some signs of a downward tendency once again in Spain. And this is despite years of expansionary monetary policy and the euro-dollar exchange rate which has been depreciating recently. The outlook for more accommodative monetary policy by the ECB comes at the same time that the Fed pursues a monetary tightening, which maintains a depreciated euro-dollar exchange rate.
As we have also seen, the population is ageing. From a median age of under 30 in 1960, the population of Spain has been steadily increasing, and is expected to reach almost 50 by 2036. This demographic change clearly has numerous repercussions. Besides posing problems for pensions and policies to remedy them, regarding retirement age, families and immigration, there is also the effect on consumption, as an elderly population, besides needing more from the pension and health care systems, also tends to consume less, rather drawing more from savings accumulated during working years.
These two phenomena that we are observing, namely, an ageing population and deflationary tendencies, are therefore linked, and what we are observing in advanced economies is, in fact, this deflationary bias along with an ageing population. Spain and Italy are the countries in Europe which have the largest proportion of ageing populations. We can look at the recent history of Japan, for instance, which has had to deal with this tendency for many years. We observe that macroeconomics is ill equipped to deal with such demographic issues and that country has been experiencing low growth for several decades despite sustained attempts at accommodative monetary policy. It is only now that it has finally relented to accept more immigration, remarkable in a country noted for having a strict immigration policy and a determined protection of its race and culture.
Deflation, which leads to postponing purchases for the future, and an ageing population, which leads to less consumption, when taken together have an impact on growth. The continuation of this demographic trend, which again, can be observed in several advanced economies, has a tendency to lead to lower growth. There is also the effect on debt, and since Spain’s debt/GDP remains high, lower prices raise the cost of servicing the debt. In the next decades, it is quite possible that the ageing population creates a drag on consumption and on prices, leading to falling real wages as expectations take the country on a downward spiral of low consumption, lower prices and lower growth. The demographic situation foreshadows an endemic lowering of demand. For years, this is what the ECB has been trying to avoid, by monetary policy easing, but the demographic situation is secular and its lasting effect might prove too much to alter its stance, at least in the foreseeable future.
From Público comes: ‘Sanchez will seek to capture the centre space after the drift to the right of both PP and Ciudadanos. Some of the president’s top advisers believe they’ve left them a wide electoral field to take advantage of. The apparent connivance of Casado and Rivera with Vox will be the axis in the argument of the Socialists’.
Meanwhile, from El Mundo comes ‘Ciudadanos plan to make pacts with PSOE leaders critical of Pedro Sánchez in an attempt to isolate him’. We read that ‘Ciudadanos are working to make 2019 the year of their definitive take-off as an alternative centre government to a PSOE leadership that makes pacts with the independentistas and a PP that is getting closer and closer to the radical right of Vox. In the Andalusian elections, Cs exceeded its own expectations, doubled its votes, was only 2.5 points behind the PP and indeed beat them in some of the most important Andalusian capitals, such as Seville, Málaga, Cádiz and Huelva…’.
Pablo Casado, taking a leaf from the Vox program, calls for ‘unequivocal support for Spain’s border police to defend the frontiers of Ceuta and Melilla’ from immigrants. ‘…”Last August we were called alarmists, xenophobes, populists, radicals and liars,” Casado said at a party event in Melilla on Wednesday, “and in the end time has proved us right. The figures are these, according to Frontex, there were more than 55,000 arrivals by irregular immigration to Spanish territory in 2018″…’. El Español runs the story here.
La Vanguardia says that Ciudadanos, the Partido Popular and Vox would between them attract half of the votes in a supposed general election held now. El Mundo says that the inclusion of Vox supporters ‘…will give an ample majority to the centre-right’.
Ana Pastor, the Speaker in Parliament, ordered the withdrawal of the presence of the words ‘fascista’ and ‘golpista’ from the official parliamentary daily report last month. The Partido Popular has now asked that another word should be similarly expunged: namely, ‘corrupto’.
From The New Barcelona Post here: ‘Catalonia is the top start-up hub in southern Europe with 1,300 start-ups generating 13,800 jobs’. The article quotes the councillor for enterprise: “over the last few years there has been a surge in the number of start-ups in Catalonia and Barcelona: 5 years ago, Catalonia did not appear in any ranking, but today Catalonia has consolidated as one of the top five entrepreneurial, technology and knowledge hubs in Europe.” (Thanks JD)
The president of the Andalusian parliament was decided on December 27th – the deputy from Ciudadanos (a lawyer from Almería) called Marta Bosquet. Now the president of the Junta de Andalucía must be chosen by the parliament. The likelihood is the candidate for the Partido Popular Juanma Moreno, but he needs the support of both Ciudadanos and Vox. Ciudadanos says it won’t be moved by any Vox proposals, and Vox says it won’t support Moreno without the removal of the (‘law drawn-up between Podemos and PSOE’) gender-based violence laws. (We will see lots of men unfairly imprisoned, beaten by their wives and unable to see their children hoopla in the coming months). The president needs to be decided and voted upon by January 16th.
It’s a slight mystery as to why people would move to a new country without first securing their finances. Anyway, step forward the IFAs (independent financial advisers), some of whom may be found in the free newspapers. Pension Life (‘Rescuing and preventing pension and investment scam victims’) is bent on ferreting out the crooked ones.
The British insurance company condemned over the 2002 Prestige disaster says it does not recognize the Spanish courts and refuses to pay 1,000 million dollars in damages. The London Steamship Owners Mutual Insurance Association, the insurance company in question, maintains that the Spanish state should go to arbitration in London. VozPópuli has the story here.
From EuroCitizens (en castellano) here: ‘The threat of a hard Brexit for the 314,000 British residents in Spain. On 19 December last, the European Commission announced its plans for a tough Brexit, ensuring the continuation of the current aviation and financial services agreements. However, the Commission will not extend the rights of the 1.2 million British in the EU-27 and, as a result, they will automatically become Third Country Nationals on 30 March…’.
From Reuters comes ‘The Spanish Prime Minister Pedro Sanchez sought on Friday to reassure Britons living in Spain, saying their rights would remain unchanged after Britain’s exit from the European Union. The government was working on measures to ensure Spain-based Britons would keep their rights even if Britain crashed out of the EU without a deal on March 29. Measures were however conditional on Spaniards getting the same treatment in Britain, he added…’.
What do the Spaniards working in the UK think of Brexit, asks ElDiario.es here.
There are expected to be around 90,000 recharge points for electric cars across Spain within the next five years says El Confidencial here. Meanwhile, the sale of diesel cars has plummeted in the last year, says 20 Minutos here.
From The Olive Press here: ‘Sweet chestnut harvests in Andalucía have been decimated by insects from the Far East this Christmas. The chestnut gall wasp from China is thought to be responsible for plunges in the crop’s production of up to 30% in places. The tiny Asian creature is accused of wreaking economic and environmental havoc in Ronda’s Genal Valley, where chestnuts bring in €10 million annually. Government scientists are now even considering introducing another invasive species in the region to stem the threat posed by the eastern critters…’.
‘Jaén launches an SOS: there’s no one prepared to pick olives at 8.5 euros per hour. Although it is a reasonably well paid activity, young people consider it a very hard work, and the immigrants that would gladly take it on do not have papers’. There are about 600,000 tons to be collected – around 22% of the world’s entire production of olive oil. The story is at La Información here. A local PCE chief says that it’s fake news and that there are plenty of jornaleros, workers, willing to participate (here).
From The Local here: ‘Iberia claims it’s owned by El Corte Inglés to avoid crisis if no deal Brexit. Spain’s flagship airline is looking to avoid part of its fleet being grounded in the event of a no deal Brexit by alleging it’s run by the country’s famed El Corte Inglés department store group, rather than by its London-headquartered holding group IAG…’. (Heh!)
Tráfico has dropped the speed limit to 90kph on secondary roads, and is now planning further unpleasantness for Spain’s motorists, including heavier fines and more points lost for speeding, use of a mobile phone and not wearing a motorcycle helmet. El Mundo has the story here.
The bottled water business, with Nueva Tribuna here: ‘Bottled water is one of the most lucrative businesses for companies in Spain. In 1970, around 1,000 million litres of bottled water were sold worldwide. In 2004, there were already 154,000 million. It is estimated that in 2017 there will be around 250,000 million litres of bottled water. Spain is the third largest consumer of bottled water in Europe. It has a consumption of 116 litres per person/year, but before the crisis it reached 137 litres and consumption is already recovering. We are only behind Italy and Germany in consumption of bottled water. Globally, we are the sixth largest consumers of bottled water…’.
‘The prices of more than 1,200 drugs available in pharmacies fell on January 1st, thanks to a government ruling. This drop in prices, as noted by the General Council of Official Associations of Pharmacists, will reduce the public bill for medicines by 88 million euros. In addition, 497 varieties of hospital medications will also be priced down. Among the drugs that have been reduced are anti-inflammatory and cough medicines, together with drugs for arthrosis, hyper-cholesterol, glaucoma and high blood pressure…’. Item from 20 Minutos.
Learning how to cut Iberian ham from a Spanish champion at Go Nomad here.
So who else uses the word ‘golpista’ regularly in their political tweets? An eye-raising list from Reddit here.
Journalist José Antonio Sierra, a regular contributor to Business over Tapas, once hitched a lift from Ávila to Frankfurt. The year was 1961. The story is at La Opinión de Málaga here.
Molly from Piccavey visits Alcala de Henares. She writes, ‘Alcala de Henares is another Spanish city with stunning architecture and plenty of history. The city centre is a UNESCO World Heritage Site, together with the University…’
Problems with Gmail and its arbitrary censorship.
Gmail is out of control sabotaging all kinds of things – notably our charity and concert work John.
Good morning Lenox,
Just so you know, I found both your emails in my spam box this morning.
Best wishes for the forthcoming festive season, Jane
Good morning Lenox
For the first time your BOT has gone into my spam!!
F*#*ing ridiculous eh?! Tracey x
From Lenox: I found my own email, sent to myself at my Gmail account, lurking in the half-hidden ‘Spam’ box, with this message from the Silicone Valley googlers. ‘Downloading this attachment is disabled. This email has been identified as phishing. If you want to download it and you trust this message, click ‘Not spam’ in the banner above’.
Now I’m apparently phishing! (Anyone who has a second non-Gmail email address is recommended to use it, and send BoT the correction). Grrr.
A map shows how the Spanish civil war republican and nationalist dominated territories moved across the country between 1936 and 1939. See it on YouTube here.
Enviado por José Antonio Sierra