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 10 2019 Nº 285
Subscriptions for 2019: here.
While the Spanish authorities like to promote this fine country as a tourist destination (Fitur, the international tourist fair, is held later this month on 23rd – 27th January), there has never been much interest in promoting housing for foreigners (‘el turismo residencial’ as it is oddly called). You are welcome to come for a week’s holidays, but the Spaniards aren’t particularly concerned with those who might be buying a house here (and spending, annually, at least 100 times more than a tourist does). They may suppose that foreign residents don’t buy souvenirs and don’t sleep in their ‘all-inclusive’ hotels.
And if the foreign buyers still bring in too much money, well, they can always knock down their house (Len and Helen Prior: 11 years ago, Wednesday), or cut their water and electric. The AUAN, a foreign-run organisation, appears to be the only hope for those victims.
The press is pretty much silent on the lost opportunity as well, perhaps as los guiris don’t buy many newspapers (or, as we have seen, vote), or maybe because the media simply doesn’t understand the economics involved.
Indeed, only two peripheral stories tend to work their way into print.
The first is the ‘lamentación’ of the dying pueblos (video) of the interior – small villages with their young-folk moving away to the attractions of the big city. Moribund pueblos that have only a few hundred old folk left, with no bank, no doctor, no pharmacy and probably just a few to serve them in the local municipality. How can we reverse this trend, they editorialise. With more births (hah!), cheap rentals, or maybe some refugees to build things up? But, be careful not to occupy one improperly, as happened in Fraguas, Guadalajara, where the small group of hippies ended up with a sentence of 18 months for their troubles.
The other subject that’s always good for a few column inches is the story of the deserted hamlet for sale. Why, there’s even an agency that specialises in the business. We hear that Gwyneth Paltrow seems to have inspired more than a few journalists with her Christmas wish aldea abandonada in Galicia (indeed, apparently a Dutch couple are buying it).
There are, we read, any number of these hamlets on the market, including one in Almería, but who exactly makes up this market? A wealthy person might buy a crumbling palacio, or a large house, and repair it, but a village? What on earth for? Rural tourism maybe?
Regardless of this, El País in English ran an article earlier this month titled ‘Thinking of buying a deserted village in Spain? Hurry, prices are going up. Spaniards are now entering a market that has been traditionally dominated by Belgian, British and French buyers’.
‘The cliché that holiday rental is part of that collaborative economy that allows Malagueños to make a little extra pin money, renting the beach house is just that, a myth. The reality is very different. Renting homes to travellers is a large-scale business, with owners spread across five continents, and has become the object of desire for investment funds and even banks. A report by the Junta de Andalucía, based on data from tourist housing registered in the Register of Andalucía as of October 1, states that more than half of the business of vacation rental is in the hands of foreigners…’. An item from Diario Sur here.
From a GoFundMe appeal from the AUAN here: ‘…The consequences of discovering that your home is illegal are daunting. We faced the prospect of expensive and lengthy court cases, being denied access to water and electricity, being unable to obtain title to the property and last but not least the prospect of demolition without compensation…’.
‘Airbnb prices in Marbella are the fourth dearest in the world, survey says. The University of Málaga analysis, carried out for the council, puts the resort just behind New York, London and Barcelona’. From Sur in English here.
‘Competition from Airbnb and other tourist accommodation platforms exploded in the province of Alicante in 2017. However, the profitability of the main hotel chains of Alicante capital did not suffer, partly because the occupancy remained (Benidorm only lost one point compared to 2016, with more British guests than ever), and partly because the establishments maintained the slight upward trend in prices that had begun two years ago…’. Alicante Plaza is bullish here: ‘The five major hotel chains on the Costa Blanca increased their turnover in 2017’.
From La Información comes the reaction to the new Minimum Wage: ‘Wednesday 26 December was a particularly turbulent day for the Spanish labour market. In a single day, the Social Security databases recorded more than 274,000 casualties of workers and an unusual volume of registrations, 230,000, for an aggregate balance of about 43,000 jobs lost in just one day…’.
Charging too much interest? You may be guilty of usury says El Español here. The article begins: ‘Consumer credit has grown by nearly 40% in the last three years. This is reflected in data from the Bank of Spain, in which it indicates that the volume of money committed between institutions and consumers currently stands at 62,800 million euros. The figure has triggered the alarms, and has called attention to the financial institutions on their laxity with which they are granting loans in recent months. Concern that is minimized by many lenders who, however, are beginning to discover a point that begins to worry them: the complaints made by their customers for usurious interest rates…’. And that’s without exploring the TV lenders like Cofidis.
The euro is now twenty years old. Who remembers the peseta? From The Conversation comes ‘The euro at 20: An enduring success but a fundamental failure’.
Deflation and Demographics, continued
By Andrew Brociner
As we have seen in the last issue, the current demographic situation of an ageing population and the deflationary tendencies we have been witnessing are linked. These effects have been observed in various advanced economies, as population falls and ages with its deflationary trends, and further evidence will no doubt be arriving shortly in the next decade. In Spain, we have already seen signs of this trend, and the outlook could be one of low growth for a prolonged period of time.
We have seen why demand would be lower with an ageing population, but there is an investment argument as well. A decreasing population lowers growth which leads to less investment. To raise investment, one would have to lower the real interest rate, but this requires inflation; otherwise, interest rates would have to be negative. Thus, a commitment to price stability becomes important, and this is why the ECB maintains this inflation target. In times of ageing populations, lower growth and less investment, maintaining inflation becomes an important policy target. If inflation remains low for a sustained period of time, due to the demographic situation we are in, this could imply a prolonged period of low growth. This is what has happened in Japan as growth for decades seemed unresponsive to monetary easing and low interest rates and this is too what seems to be happening in other western countries as the demographic situation becomes similar.
Many western countries have falling populations as they have low fertility rates. Spain has had a declining rate for decades and is currently at 1.3. A number of European countries have these same characteristics and are set for the same scenario we have witnessed in Japan and Spain is one of them with its large proportion of an ageing population. Apart from all the other concerns we have been discussing recently, such as strains on the pension and health care systems, especially acute due to the depletion of the Social Security Reserve Fund in recent years, there is also the expected problem of low growth for many years to come as well.
Among opposition from the right, the Government will propose its budget for 2019 this Friday. El País says that ‘…The president announces in an interview with Efe that he will present the accounts without having the necessary parliamentary support guaranteed’.
El Mundo continues with its new political line. ‘Half of PSOE voters believe that the gender-based violence law does not help prosecute abuse’. They have a graphic here.
Based on the recent CIS poll, La Vanguardia says that Vox isn’t just doing well in Andalucía, but the far-right is also ‘…advancing in Castilla-La Mancha, Cantabria, La Rioja and the autonomous cities of Ceuta and Melilla’. El País also looks at the CIS poll, and says that the Right is increasing its hold, although Vox is only looking at 3%. El Español says that the CIS is manipulated, and that ‘The CIS gives the PSOE 5 points more than the average by other surveys and Vox 5 points less’. The news-site says that their own survey gives that ‘PP, Ciudadanos and Vox add up to 49.3% of the votes, but Pedro Sánchez would still be in the Moncloa’.
Senior politicians within the Partido Popular warn that ‘if we follow the proposals from Vox, next time our supporters will vote for Vox’. The article is at El Mundo here. Vox had some eccentric proposals for Andalucía (now the dust has settled, see below) which are examined in an editorial from ElDiario.es here. Some of these ideas will be national policy.
Pedro Sánchez has ruled out a general election to coincide with the local and European elections of May 26th here.
Registering to vote in the local elections for Foreign Residents. You need to be on the padrón, over 18 and to have asked for your right to vote at the town hall (manifestar la voluntad de votar). If you voted last time, then you are on the ballot list. You also need to be a member of the EU (register before January 30th) or from a short list of countries with a bilateral agreement with Spain (register before January 15th). A useful graphic and article is here. If you are British, then register anyway (if you haven’t already). In short, no one knows yet what will happen: the Ministerio del Interior has no fresh news on the subject, but it doesn’t seem likely that we will be enfranchised. Maybe next time.
Late Wednesday news reports says that Vox has agreed to support the program put forward by the PP and Ciudadanos, dropping their demand for the repeal of the laws of gender-violence, thus making way for Juanma Moreno to be voted in as president next Tuesday. El País has the details here. Vox has agreed to drop its call to repeal the laws on gender-violence and the PP has agreed in turn to some minor concessions – including a harder line on ‘illegal immigration’… El Mundo has the ‘37 points agreed’ here). Now, with Ciudadanos on board, the formalities of the investiture of a new president can go ahead… The opinion from the Moncloa is ‘while we are looking to the future, they’ve embraced the nostalgia of the Ultras’.
‘Gibraltar’s Chief Minister Fabian Picardo on Monday rejected talk of Spain sharing sovereignty of the tiny territory with Britain after Brexit, saying the concept was “as dead as a dodo”. Spain’s Socialist Prime Minister Pedro Sanchez said in November that Madrid would seek a discussion over joint sovereignty of Gibraltar, a British territory since 1713, once Britain leaves the European Union on March 29th…’. More at The Local here.
‘Irish investors seek €35m for Spanish property losses. Claims worth more than €35m have been lodged in Spanish courts by Irish investors who lost heavily in that country’s property market crash. An Irish agency is handling more than 700 cases on behalf of investors in Ireland and the UK who collectively lost millions in deposits on un-built Spanish holiday homes…’. From the Irish Examiner here.
From HMGov comes ‘The UK’s exit from the EU: Important information for UK nationals
European Union (EU) exit information for UK nationals in the absence of a withdrawal agreement’.
Several Spanish news-sites will be putting up pay-walls this year, in the hope that you could buy a subscription to one of these (more? doubtful) and just read the news from that one site. This is why there are a number of small independent news-sites, but if the new Google Tax is voted in Brussels, then we will become short-handed on balanced reporting. Thank goodness for the TV, hey? The subject is explored by El Español here. ‘El País, ABC, El Mundo, La Vanguardia and Vocento’s stable (Ideal and so on) will launch initiatives during the first half of the year to start making the most of their digital readers and thus complement the income from advertising on the Internet. The largest Spanish newspapers cannot wait any longer. According to the Office of Justification of Diffusion (OJD), during the first ten months of the year, the paper versions of the six major newspapers – El País, El Mundo, ABC, La Razón, La Vanguardia and El Periódico – have fallen another 10% in sales and 11% in circulation, which adds to an extra 6% drop in printed advertising revenue…’.
From El País here: ‘Mediaset to eliminate TV Cuatro‘s news bulletins. The midday edition is now just 15 minutes and the evening edition, 25 minutes. From 15 February, both will disappear from the channel’. .
From The Inquirer here: ‘The European Union has been gnashing its teeth in all the wrong places for a while now, with the passing of Article 13 seemingly just the beginning. Ahead of the final law being implemented, lawmakers have issued a list of websites that it believes should be blocked for copyright infringement – and if it wasn’t so tragic, it’d be pretty hilarious. It has singled out some blatantly legitimate sites for blocking, with the flimsiest of reasoning…’.
A press notice from Sun Systems Group: ‘Who would have predicted that in 2018 we would see that the change in the trend of photovoltaic solar energy, so stigmatized since 2012 with an irresponsible and iron-fisted energy policy undertaken in Spain, would make a tremendous turn. Where generating photovoltaic energy was once a difficulty, it now opens up endless opportunities to generate business by providing and creating thousands of jobs, financial investments, etc… This is called “industrial fabric”. We all win as we conserve our habitat. The project of the current Spanish Government, which has marked a “milestone” with the guidelines towards a horizon to install 70 GW in the year 2030 and the economic expectations are looking good. Large financial groups are betting on clean energy and investing again in Spain without any subsidy and totally compatible with the different energies, be they Nuclear, Combined Cycle, thermal, wind, etc. Only with the savings that will be achieved, the trade deficit of energy imports will be reduced significantly. The 2nd phase of the photovoltaic projects that Sun Systems Group will develop, will be the implantation of ion – lithium batteries in the Accumulation Batteries (1 container 20 feet = 1 MW), to be able to accumulate energy and balance the consumption / generation powers achieving the same efficiency and balance as fossil energies, but with reliability in the injection…’. More from email@example.com
A group called #NoEnMiFactura say they have successfully persuaded the Government to no longer include any payments for the maintenance of the failed Castor gas storage project in customer’s gas bills.
With fresh taxes on diesel and uncertainty about all internal-combustion engines, maybe it’s time to buy an electric car. But, where’s the nearest charging station (and how long will it take to ‘fill it up’)? From Motor.es comes news of new state-aid for purchasers: ‘…Although it was expected by the end of last year, the new VEA Plan will finally be a reality in 2019. The arrival of a new aid program for the purchase of vehicles powered by alternative energies is just around the corner…’. Apparently, in the next few weeks… Where’s the nearest Tesla concessionary?
‘Madrid Central (the new system to control and reduce polluting traffic) manages to reduce pollution by 20% in its first month. This is stated in the report prepared by Ecologistas en Acción on ‘Air Quality in the City of Madrid during 2018’…’. From Público here.
The tragaperras (‘coin-swallowers’, or one-armed bandits in English) are losing ground it seems, and only die-hard players remain to press the buttons and make an occasional clink-clonk sound of reward. From VozPopuli here: ‘Slot machines in danger of extinction as their income drops by 35% in the last ten years. These machines have suffered a significant drop in revenue in the last decade, as around 60,000 of them have disappeared in Spain, reducing their number to a current 199,417 machines’.
From ElDiario.es here: ‘Ceuta and Melilla want to be the paradise of online gaming companies so as not to have to depend on Morocco’. The article refers to the fall in ‘semi-legal’ merchandise through the borders with the neighbouring Morocco.
One of the odd proposals from Vox is to change the Día de Andalucía regional holiday from February 28th (the day remembers the referendum to make Andalucía an autonomy in 1980), to January 2nd, the Day of the Reconquest, when the Moors were finally defeated forever. The story at El Español here.
‘The incident of the train from Extremadura at the beginning of the year, where 150 passengers had to spend the night in the train as it broke down in the middle of nowhere, has once again put on the table the debate on the state of the conventional rail network and the model chosen for the country by the political parties in their determined commitment to high speed AVE trains. Only this way it is explained that the public investments executed in the last decade (2008-2018) destined to the high speed ascend to 31,414 million euros, whereas to the routes by which local and regional trains operate with only 6.388 millions…’. The AVE is a vanity project which is ruinously expensive. El País has the story here.
From El Mundo here: ‘The most obsolete train-service in Spain is in Extremadura: sleepers manufactured as far back as 1886 are still in use’. The offending sleepers are on the Ciudad Real-Badajoz line.
Taking out Spanish nationality? From ElDiario.es here ‘The cost of becoming Spanish: just 300 euros and a written test to demonstrate “integration” that 90% of candidates pass’. Or, if the candidate hasn’t had a formal education, he can soon take a simplified examination, according to El Confidencial here.
Pedro Duque, the Minister for Science, says that homeopathic medicines can stay in the pharmacies for the time being ‘as long as they are stacked next to the candy’. The minister says that ‘pseudo-therapies without a scientific background’ cannot be a part of a public health service and they will all be withdrawn during 2019.
‘The Partido Popular party has been slammed after posting an ‘offensive’ Twitter video ‘wishing’ Socialist Prime Minister Pedro Sanchez would die. The video was posted on the PP’s official Twitter account on the eve of Epiphany – the day when the Reyes Magos, or Three Kings, descend on Spain giving children gifts and sweets…’. It was later removed. The Olive Press has the story here.
‘Anti-homeless architecture is often disguised as useful features for pedestrians, but it secretly doubles up as defence against rough sleepers. Big money goes into making the most beautiful parts of Madrid hostile towards the homeless, and examples of these disturbing installations can be found everywhere you look…’. Found at Madrid No Frills here.
The complete list of Spain’s national and regional holidays in 2019 from The Olive Press. Spain celebrates 10 national public holidays this year, as well as various regional days off.
Andalucia.org has pages on the various municipalities in the region. Here’s one for Huéscar in Granada which has an interesting tale. ‘…this municipality declared war against Denmark on the 11th of November 1809. Taking into account that a war never finishes until the peace agreement is signed, it was logical to put an end to this anachronism. Therefore, Huéscar authorities decided on the 7th of July 1981 to start peace talks with the Danish authorities aiming to re-establish peace after 172 years of war…’.
Thanks for that, and yes…. I have identified the problem.
I have been using a service called Bitly to shorten long URLs. It seems that some systems detect these in an email and because they can’t identify the end link, they mark it as spam and block it. Spammers use the same system to hide dodgy web sites in the hope people will click the link. Anything from our email address is safe, but I will not be using URL shorteners again. Best regards, Dave
Dear Account Holder: We enclose our new increased rate of commissions and tariffs for 2019, since we really aren’t making anything to speak of from your measly current account at our bank, and we also take this opportunity to warn you of further branch closures and a drop in personnel in the remaining offices. Geez, some people think we just run these things for charity. (Lenox gets the hump).
Marca España. “Everything you expect and much more than you can imagine.” On YouTube here.
Enviado por José Antonio Sierra