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Headlines in The Independent paper today:
http://www.independent.co.uk/news/world/europe/spain-the-new-crisis-in-euroland-2002676.htm
Preparing to ask for a 250 Bn euro bailout.
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Here’s some good news about Spain, whose debt levels are lower than France or Germany’s.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aEWROPb5rf8o&pos=5
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The blogosphere has been full of such rumours for about a week now. It was sparked by a story in the German FT.
It has since been strenuously denied by the Spanish authorities. What that means is open to question. Greece denied having any difficulties a few days before calling for help.
What is for sure is that Spain has a lot of debt to roll over next month. Normal inter-bank credit appears to have dried up. I’d guess that they are indeed in trouble.
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Latest news in the Spanish news is that Zapatero has told Cameron to make cuts and reforms ASAP and to make them widely in order to reduce the UK defecit…..couldn’t make it up could you 😆
El presidente del Gobierno, José Luis Rodríguez Zapatero, ha recomendado al nuevo primer ministro británico, David Cameron, que apruebe las medidas de ajuste y reformas para reducir el déficit que está preparando cuanto antes y que sean lo más amplias posibles, según han informado fuentes gubernamentales.
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Liam,
As I pointed out to you on the other thread you can/should not look at the Spanish property market without looking at the wider economy.
The nuclear option is Spain leaving the euro. This would probably then entail a devaluation of 30% or so in the ‘new peseta’. Odds are still against that but it is a possibility.
The most optimistic scenario is that Spain’s alleged weakness has all been got up by nasty foreign speculators. They will be found out. The short positions they are holding will cost them a lot of money and everyone will wonder what all the fuss is about.
Reality is probably somewhere between the two. Hard times for a good few years, austerity, deflation.
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@katy wrote:
Latest news in the Spanish news is that Zapatero has told Cameron to make cuts and reforms ASAP and to make them widely in order to reduce the UK defecit…..couldn’t make it up could you 😆
El presidente del Gobierno, José Luis Rodríguez Zapatero, ha recomendado al nuevo primer ministro británico, David Cameron, que apruebe las medidas de ajuste y reformas para reducir el déficit que está preparando cuanto antes y que sean lo más amplias posibles, según han informado fuentes gubernamentales.
Zapatero is well entitled to lecture Cameron on debt reduction, the UK’s is much higher than Spain’s.
Secondly, Spain has a vested interest in a financially sound UK, with a million UK expats living in the country and despite the hysteria to the contrary, they would like another million to come over and help clear the 1.6 million empty homes.
Spain has not had to bail out it’s major banks as the UK had to do, Spain is in trouble because it’s construction industry failed. A lot of those 1.6 million empty houses were built for people from the UK, who could no longer come over and buy them when the UK banks failed spectacularly.
We saved our major banks by printing money, which will take us decades to repay, Spain couldn’t save their construction industry because membership of the Euirozone prevented them from printing money.
The result is misery in both countries, possibly for some years to come.
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From what I have read in past articles, my impressions are that the spanish banking system was bailed out by the ECB, who provided funds to keep the banks liquid.
My impressions are also that a lot of the 1.6 million empty houses were built on false expectations that they could be sold to people from the Uk. Although the credit crunch undoubtedly did have a negative impact on the property market in most countries, I have serious doubts that the construction industry in Spain were trying to match supply to demand.
Richard.
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Spain is a vast country with a low population density, which isn’t producing as many children as in the past. The country wants and needs immigration to increase its prosperity and has done well from the comparative wealthier northern Europeans in the past, particularly the Brits.
The construction industry didn’t match supply with demand, but the sun encourages optimism, both for the developers and the dreamers from abroad who holiday in Spain and read the glossy brochures that inform them that they could holiday here permanently.
I’m one of those million dreamers who fell for it, and am I glad that I did.
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katy, I doubt there’s many people who would trust Zapatero with a bargepole, you know what happens when people constantly deny something’s going to happen in the media, then it does!
There’s an awful lot of people who fell for the sales talk in Spain and wish they hadn’t, they’re having to accept the situation and the long term wait before they can get out without taking a financial hammering, the 1.20 plus exchange rate nipped back down again to below that yesterday, there’s so much uncertainty and risk all over Europe right now.
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I agree with the uncertainty all over Europe and Zapatero is not a very able politician, but he is totally benign compared with the big threat to the UK and that’s coming from our supposed friends across the big pond.
I read most of the questions from the US senate directed at that poor CEO of BP and saw the photographs of those hate-filled American faces. The very obvious anti-British sentiments go way beyond anything to do with the unfortunate accident in the Mexican Gulf; and the possible demise of BP and the other implications are far more serious than some rumours over whether Spain needs to borrow money from the central banks.
If it comes to facing down the American threat, we will need our friends in Europe to help us.
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I am not “here” anymore although I do not consider being anti-european a reason not to live in Spain. There are many ex-pats who are anti europe and live happily in Spain
BTW I consider myself very fortunate to be out of Spain and all my money in sterling and dollars 😀 I am holding around 800 euro in a drawer and that will only be spent elsewhere than spain.
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Thank you for the explanation, I didn’t think you could live in Spain as an anti-European, it wouldn’t make sense. I haven’t come across any anti-European expats living here, they would have gone to live elsewhere, wouldn’t they.
There are lots of things about Spain that I don’t like, but the things I do like by far outnumber the negatives. I’m about to go into my swimming pool, as I do every day for around eight months of the year, I couldn’t have done that back in the UK, and I still only pay a Euro for my coffee, the last time I landed at Stanstead it cost me a fiver. Etc, etc . .
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@Rocker wrote:
Thank you for the explanation, I didn’t think you could live in Spain as an anti-European, it wouldn’t make sense. I haven’t come across any anti-European expats living here, they would have gone to live elsewhere, wouldn’t they.
There are lots of anti’s living in the UK and they are part of Europe too, don’t see the difference.
There are lots of things about Spain that I don’t like, but the things I do like by far outnumber the negatives. I’m about to go into my swimming pool, as I do every day for around eight months of the year, I couldn’t have done that back
Is your pool heated, if not you must be very hardy. For 15 years we averaged mid May +/- a week and too cold after around mid-Sept. 4 to 5 months! Of course the weather is better but July and August can be unbearably hot and the winters are colder than the myth put out. We had CH, cost a fortune to run and the UK house is still warmer.
and I still only pay a Euro for my coffee, the last time I landed at Stanstead it cost me a fiver. Etc, etc . .
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@katy wrote:
@Rocker wrote:
Thank you for the explanation, I didn’t think you could live in Spain as an anti-European, it wouldn’t make sense. I haven’t come across any anti-European expats living here, they would have gone to live elsewhere, wouldn’t they.
There are lots of anti’s living in the UK and they are part of Europe too, don’t see the difference.
There are lots of things about Spain that I don’t like, but the things I do like by far outnumber the negatives. I’m about to go into my swimming pool, as I do every day for around eight months of the year, I couldn’t have done that back
Is your pool heated, if not you must be very hardy. For 15 years we averaged mid May +/- a week and too cold after around mid-Sept. 4 to 5 months! Of course the weather is better but July and August can be unbearably hot and the winters are colder than the myth put out. We had CH, cost a fortune to run and the UK house is still warmer.
and I still only pay a Euro for my coffee, the last time I landed at Stanstead it cost me a fiver. Etc, etc . .
.15 years. That’s made me stop to think. You must miss it every day. Something must have happened to make you post negative things about a country you lived in for 15 years, and I’m sorry it happened.
My pool isn’t heated, I go in when it’s at 20 degrees, it’s 30 at the moment. I feel very uncomfortable in July and August when it’s too hot and I have to hide from the sun.
Incidentally, I made the choice to live in Spain all those years ago after considering Florida instead. Only three years ago, I came within an inch of emigrating to California and I’m now glad that I didn’t.
Without being funny, you mentioned having 800 Euros in a drawer. If you convert those Euros into American Dollars, you would be able to buy a house in Detroit, or an apartment in Las Vegas.
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Thanx for the advice but we have a house in Florida, Naples. Location, location bought before the boom and not lost…yet. Taxes are high though but has been long term rented for the past two years. Were it not for all the visa crap we would have lived there years ago. Don’t be sorry for me leaving spain, I am just sorry that Spain sort of dropped off after around 2004. We had a good life but was sooo relieved to leave a place that has gone terribly wrong. I just feel sorry for the thousands that are trapped there after trying to sell for two or three years, or even worse have an illegal property. I felt as if we had won the lottery when we sold that expensive house…couldn’t get out of the country with the bankers drafts fast enough 😀
No wonder you have an extended swimming period if you go in at 20C 😯 25C felt a bit chilly for me.
Aren’t we a little off topic though, thought we were discussing Spain’s monetary crisis….this thread is being spun around like Zapeteros media men 😆
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So why then did the IMF visit Spain, was it a courtesy call and a cup of tea. Why have they not visited any other countries except Greece ❓
Not just about a country having debts it is the prospects it has to pay it off. How will Spain do that with 5 million unemployed and millions of unsold properties. Plus a dwindling share of the tourist market?
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Santander is the biggest bank in the Eurozone and one of the biggest in the world. When the world’s banking system started to wobble during the recession, Santander bought into the UK banking sector, buying the likes of Abbey bank for peanuts.
RBS are being punished for buying all those worthless sub-prime mortgage packets from the Americans, and are forced to sell off their High Street banks, for peanuts.
Santander also has large holdings in South America, an up and coming sub-continent, and they bought those holdings for peanuts too.
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@Claire wrote:
💡 Santander have expressed an interest in RBS to act as smokescreen to cover Spanish banks woes.
I totally agree, simply a hollow statement.
The more I study the Spanish Property market, the more I am convinced an extremley serious problem is going to unfold.
There are millions of individuals, who signed up for a property in the last 6 years that must have lost sums in the region 100,000 ~200,000 Euros at todays sellable prices and unless they have disposed of the property these losses are increasing daily.
I think it’s possible that another 30% fall in prices might be seen over the next 2 years. That could push average losses up to 150,000, ~ 300,000 Euros.
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katy, I didn’t know your U.S. home was in Naples, what a fantastic place, we’ve had several holidays there. The beach and lifestyle knock Spain into a cocked hat. One of our favourite places too. Fantastic homes at realistic prices.
High standard of living, pretty low cost of eating out, great shopping mall, hardly any dirt or scruffy verges etc. I must stop going on about it but wish Brits could move there permanently.
Back to Spain, IMO Santander bank is possibly the new distaster waiting to happen a bit like RBS/ABNH?, expanding too much and too fast, heavily exposed to S. America and Spanish property woes, I just don’t trust their situation.
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Yes Angie…wish I was there now 🙁 We intended to spend 6 months each year there but found that moving 2 dogs and a cat a logistical nightmare, we only did it once. Also 1 dog is now 15 and too old to fly.
I read that the RBS was ordered by the EU commission to sell the branches, doesn’t seem logical to allow Santander (the ONLY bidder) to continue with their empire building 😮
http://www.fool.com/investing/international/2010/06/08/santander-to-buy-rbs-branches.aspx
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@jp1 wrote:
@Claire wrote:
💡 Santander have expressed an interest in RBS to act as smokescreen to cover Spanish banks woes.
I totally agree, simply a hollow statement.
The more I study the Spanish Property market, the more I am convinced an extremley serious problem is going to unfold.
There are millions of individuals, who signed up for a property in the last 6 years that must have lost sums in the region 100,000 ~200,000 Euros at todays sellable prices and unless they have disposed of the property these losses are increasing daily.
I think it’s possible that another 30% fall in prices might be seen over the next 2 years. That could push average losses up to 150,000, ~ 300,000 Euros.
Just been reading Mark’s news
http://www.spanishpropertyinsight.com/buff/2010/06/14/non-residents-buy-just-500-holiday-homes-in-year-to-april/#more-4573Only just over a 100 homes were sold to foreigners this year up to April. If this is true (probably is as they don’t usually do negative) then all those ex-pat homes are going to take a decade to sell 😯 The spanish won’t buy them, they hate high community fees and they won’t buy expensive rural either, they like to be in the centre of things.
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We’ve got an old blind dog katy, we can’t let him fly, he’s too nervous but he’s been to France and Spain. I think the US could improve their property sales if they allowed Brits especially pensioners to live there permanently provided they had medical cover, I think 100’s of 1000’s would move there then, and the houses are so much better value for money and larger than in other places in UK and abroad.
If only 100 homes were sold to foreigners up to April this year, then there’s been a lot of B
t going on by those trying to talk it up, this would mean the property problem is far worse than any of us thought. That figure is peanuts! But how many homes are on the market???? 😮 -
@Rocker wrote:
I can’t believe that someone living in Spain, with European neighbours, can believe that we should be out of Europe? What are you doing here? Why do you want to live in an unfriendly country?
What on earth are you talking about? I think you’re ‘off your Rocker’ with a statement like that (pun intended).
I and nearly everyone else I know think the whole Euro project was doomed from the start, likewise the possibility of success re. the Euro – and resent the undemocratic ‘dictatorship’ machine it has become. The concept was a good one eg. ‘The Common Market’ but it has evolved into something totally unrecogniseable 15 years down the line. The UK was wise not to get involved (we suffer enough bull****-directives as it is) and just because many of us choose to live in another European country doesn’t mean we think we should buy into the European Union thing with all that it entails.
We love the diversity and individuality of all the different European countries, so noticeable when you drive and cross each border. But that has nothing to do with believing that we should tie all these countries up together and be dictated to law-wise and financially by a massive unelected group of people (who enjoy a humungus gravy train) and one currency. The inability to devalue one’s currency when necessary is strangling Greece, likewise Portugal, Spain and Italy. This one-currency-fits-all-regardless is just exacerbating their difficulties. Have a chat with people in Germany and you’ll find the majority wish they’d never heard of the Euro (I got that from my cousin who has been living there for 35 years).
You can not believe that people think they would prefer to be ‘out of Europe’? What do you honestly think the answer would be if a referendum was now offered to every European?
An interesting article on the future of the Euro in today’s Telegraph: http://www.telegraph.co.uk/comment/columnists/charlesmoore/7839188/The-euros-inevitable-failure-will-be-horrendous-for-all-of-us.html
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@shakeel wrote:
Let us not kid ourselves nobody is any body’s friend & its personal interest & preservation that comes first
Spot on Shakeel, and this is the problem. Remember the way France behaved (totally against EU’s directives) when the UK had the Mad Cow Disease problem?
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@charlie wrote:
@Rocker wrote:
I can’t believe that someone living in Spain, with European neighbours, can believe that we should be out of Europe? What are you doing here? Why do you want to live in an unfriendly country?
What on earth are you talking about? I think you’re ‘off your Rocker’ with a statement like that (pun intended).
I and nearly everyone else I know think the whole Euro project was doomed from the start, likewise the possibility of success re. the Euro – and resent the undemocratic ‘dictatorship’ machine it has become. The concept was a good one eg. ‘The Common Market’ but it has evolved into something totally unrecogniseable 15 years down the line. The UK was wise not to get involved (we suffer enough bull****-directives as it is) and just because many of us choose to live in another European country doesn’t mean we think we should buy into the European Union thing with all that it entails.
We love the diversity and individuality of all the different European countries, so noticeable when you drive and cross each border. But that has nothing to do with believing that we should tie all these countries up together and be dictated to law-wise and financially by a massive unelected group of people (who enjoy a humungus gravy train) and one currency. The inability to devalue one’s currency when necessary is strangling Greece, likewise Portugal, Spain and Italy. This one-currency-fits-all-regardless is just exacerbating their difficulties. Have a chat with people in Germany and you’ll find the majority wish they’d never heard of the Euro (I got that from my cousin who has been living there for 35 years).
You can not believe that people think they would prefer to be ‘out of Europe’? What do you honestly think the answer would be if a referendum was now offered to every European?
An interesting article on the future of the Euro in today’s Telegraph: http://www.telegraph.co.uk/comment/columnists/charlesmoore/7839188/The-euros-inevitable-failure-will-be-horrendous-for-all-of-us.html
I have chosen to live in Spain, permanently, precisely because I believe in the concept of a European union of sorts, though perhaps not a monetary one. You obviously don’t live in Spain, and are anti-European, I respect that and will not be rude to you in return.
If you can’t understand why it doesn’t make sense to live in an unfriendly country, then I can’t help you or explain it any further, the only scenario I can think of is a businessman living in an unfriendly country purely to make money for a limited time, but what a joyless life that must be, surrounded by people you don’t like.
Germany more or less started the entire concept of a European union along with France, mainly because of their convoluted history and to prevent the ugly nationalism they know so well from returning. The Euro was a step too far for the Germans, a German worker forced to retire at 66, will not support the idea of a Greek worker retiring at 61, with Germans picking up the bill.
On top of that, the Euro couldn’t work without British membership of the Eurozone, London is a world banking centre that Frankfurt can’t compete with, for one thing, not enough people speak German, and English is the business language globally.
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To those with the notion of a dying Euro: that will not happen. It costs you money to enter the Euro zone. But it costs a lot more to exit. Let’s take Spain as an example. The spanish government already decided to join the Euro. Here is the advantage (+) and disadvantage (-) list:
- (+) Fixed exchange rate when dealing with neighbors
- (+) Transparency (through public controlled budgets)
- (-) You cannot print own money any more
- (-) No more “hidden” tax rising by printing money
Nothing a modern government cannot learn to handle. All they got to do is: explicitly rise taxes and lower wages if necessary. Yes – thats more visible than in the old days. That’s also a difference to the former recipe, where you simply start the money printing machine if you need to do so.
Lets make a hypothetic scenario: tomorrow, Zapatero declares the “new peseta” as the new currency as per ordre-de-mufti. According to wikipedia, the spanish government has debts in the 500.000.000.000 Euro range. Nobody will accept new pesetas to clear current debts – they will insist in being payed in Euro. No matter how many new pesetas are being printed, the debt is to be payed in Euro. For that reason, the government needs to rise taxes no matter what they do. Because there is no short-term-advantage, they do not exit from the Euro. (Yes: a government may follow long term plans. Possible but unlikely).
What indeed is possible: the spanish government cannot get re-financing in the free market (e.g. by not getting a large new credit with affordable low interest rate). Then they do not have any money. But they still have lots of assets (people, land, industry etc.). In this case, they really need an ordered insolvency procedure/method/process. During the moratorium, they probably find someone for bargaining, e.g. here is Mallorca in exchange for a big bucket of Euros. Which in turn will rise the taxes needed to pay the new debts in time.
FAQ: any change for lower taxes!? Anwer: yes – possibly. If government detects new assets, e.g. oil / gold / lithium. Or if they lower their spending, e.g. by discarding the army, cancel the unemployment spendings because nobody is requiring it etc.
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I’m always surprised by the negativity of some people towards the EU. It would be silly to list all things for and against, and it would take forever, but on a property forum I can think of one overwhelming positive from membership.
We have a Euro-wide policing service, with Euro arrest warrants, extradition, Euro-pol as well as international warrants and extradition. Spain’s authorities are notoriously slow in dealing with the widespread corruption involved in the selling of illegal properties, mostly to foreigners, but they are getting there, some eight to ten years behind the time.
There’s a major case before the courts from the Lliber, Denia area. It’sabsolutely typical, corrupt developers, a corrupt town hall with associated corrupt lawyers and other officials. The case is over eight years old, but this time the police have gone after the foreign agents as well, Germans in this case. They have been brought back from their home country in handcuffs and are standing in the dock with their fellow accused.
The whole chain of corruption and building of illegal properties wouldn’t work without foreign agents selling the properties on to their own country folk. And if they knew they were selling illegal properties, they would be just as culpable as the other conspirators.
The Denia case is minute compared to the cauldron of corruption around Marbella in the past ten years and more, but the self-same principle applies, and eventually the authorities will get round to the agents that were involved too.
And thanks to the EU, there will be no hiding place for them.
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Most of the people involved in the Malaya corruption case in Marbella are still leading the same lifestyles, some even have high positions in the Town Hall. They have been found guilty of accepting bribes but no pasa nada. Many other Mayors have been aquitted. A few foreign agents being brought over is not going to halt inbred corruption.
It does not need the whole Brussels gravy machine to have international agreements re. crime.
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@katy wrote:
It does not need the whole Brussels gravy machine to have international agreements re. crime.
Exactly Katy, they’re called Extradition Treaties. Sometimes reading these posts I feel I’m living on a parallel planet. 🙄
Actually the EU has even dangerously messed that up as well with their ‘Arrest Warrants’ for all. Not all of the EU’s judicial systems (to put it mildly) rest on the same ideas of justice.@Rocker wrote:
I have chosen to live in Spain, permanently, precisely because I believe in the concept of a European union of sorts……
Well I have chosen to live in Greece precisely because I love the beautiful island I am blessed to call my home, the relaxed pace of life compared to the one I had in the UK, and the warmth of hospitality offered to me by it’s local population.
Still, each to their own reasons I suppose.As for me apparantly:
“living in an unfriendly country”
“businessman…..purely to make money for a limited time”
“a joyless life ……. surrounded by people you don’t like”.Well Rocker, that’s about as accurate as your post back in April before the election when you wrote “I predict a Labour victory or a Labour/Lib Dem coalition”. 😆
Try and not guestimate other forum member’s lives, there’s a good chap, because you’re not very good at it. -
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What on earth are you on about? Don’t be such a Charlie, pun intended.
I don’t know who you are or what you are, but you sound like a pompous chump who likes to be rude to people while hiding behind a cyber identity.
Imagine going back to a member’s election prediction? Why? Did I write something to annoy you?
I can’t think what. I wrote of agents who knowingly sold illegal houses being brought to justice, albeit it many years later, now surely those crooks being prosecuted at long last is something to be applauded?
I have a feeling that you don’t agree.
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@Rocker wrote:
I don’t know who you are or what you are, but you sound like a pompous chump who likes to be rude to people while hiding behind a cyber identity.
Whoa there Rocker…!
I was looking at some of your earlier comments here, and was just jumping on my white horse to come riding in and see if I could help you out.
But you can’t call people “pompous chump’s” or even begin to take on the likes of Charlie and Katy in this way, this forum used to have all sorts of bickering and name calling going on, and it hasn’t had any for a good half a year or so now, probably because – without claiming the same for myself – it is full of well intentioned and well formed opinion in the main.
So word of advice mate, have a go at the arguments but don’t do the name calling, and if Charlie bends your ear a bit, get used to it, everyone else does!
NOW though…
You are absolutely right about Europe being a fantastic place to live, and Charlie is absolutely wrong when she says everyone she knows thinks the European Community / Project / Euro whatever is a busted flush.
I don’t.
I have been working side by side with people from literally every nation in the Euro for the past 20 years in Spain and 10 years in the Middle East, I think the CDS (don’t know the other areas of Spain well enough to comment) is the perfect example of a mini European community of nationalities all working and living together in real harmony and productivity.
Good on Charlie for loving her Greek Island, I can quite see the allure but it wouldn’t be for me for more than a week, but the coast here is an amazing mix of all nationalities, and a considerable number of Brits who believe the SOONER that the UK comes fully into Europe the better – though I concede it isn’t going to be for a decade or two – however it will happen eventually, it has to.
Now, if you want to rattle a cage Rocker – that’s the way to do it – say what you mean and believe it, it is OK, they come back at you like rattlesnakes but if you right, which in large part you are, you come out at least honours even!
And for goodness sake, I used to travel regularly to Ireland, Germany, Portugal, France several times in a year, and the whole business of individual currencies was STUPID and a NIGHTMARE on so many levels… YES there is utter turmoil at present, and it will keep us debating for another two years at least about the issue, but eventually the Euro will be as solid and strong as the Dollar, maybe more so, and the UK will be looking carefully at its pound and wondering.
This is just a phase, a time, it is not going to happen that countries withdraw from the Euro, but what is happening, whehter British people like it or not, is that people in Europe are becoming more as one, and MASSIVE numbers of Brits, well actually 100’s of thousands of them are still as happy as Katy was pre 2004, and more will come, and like you and me Rocker, they are HUGELY into being European and taking part in the grand idea of an eventual United States of Europe….
And another thing, while am on my high “Rocker” horse…
You were absolutely right about the Amercian Senators pouring their vile and unbelievable bile at the BP Chief Executive being sooooo wrong and actually scarily worrying about America and its attitude toward the UK under Obama, my understanding is that two American companies were as much or more at fault directly for the oil spill but would Britain have responded in this manner or sought votes left right and centre by attacking us in this way, they pay lip service when the matter of UK bashing is brought up, but I don’t think Obama is a friend to the UK. I can’t believe am saying it, but I actually think he is the opposite and we should be very wary of him altogether.
I think, we will one day learn, that our friends are actually our neighbours, and if we had shared laws, currencies and operations we would be much the better for it. But then we do, the European Union / Community, and it should be encouraged, supported, developed and loved, it takes time, decades, a hundred years or more, but the grand plan is the right one.
Am afraid the British Empire is gone people, I don’t want to be hand in hand with an American one, god look where that has actually led us and what thanks are we getting? Has one yard of Iraqi, or Afghanistan soil been worth the life of a single British soldier and did they need to go?
Amercia can get stuffed, long live Europe and will people SHUT UP about their being 1.6 million built and unoccupied homes – THAT IS NOT TRUE – there might be about 400,000 empty but that is it, the rest is something else in terms of statistics and guesswork. And as there is no build taking place today, the real surplus will naturally decrease and within two – three years no problem at all in urban areas. And developers heaven help us will start building again, because of something called demand.
AND FINALLY COS I MIGHT AS WELL THROW IT ALL IN AT ONCE…. If no one believes the stupid house price statistics from TINSA, then who the hell is stupid enough to believe some half baked stat that says that in all of Spain to April this year only 100 foreigners bought a property… oh for gods sake!
Eeeehh…. Sunday’s, you would think I had something better to do, but you looked like you needed a tad of support here Rocker and I know I should address one issue per post, but haven’t had a good long ramble for ages!
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“two American companies were as much or more at fault directly for the oil spill “
Yes and no one has mentioned them. Dick Cheney comes to mind !!!!!!!!. Yes, Britain is not a power anymore & buy sucking up to Americans they have some influence and this comes at a very high price.
Falklands could not have been liberated without the logistical support of the Americans. Look at the price we have paid in Iraq & Afghanistan and the one sided extradition treaty.We did nothing when the Irish Americans were open supporting the IRA. Where was the war on terror, where was the money laundering for terrorism. We did not have a “ground zero” at the “Natwest Tower”
I do not think that Obama is pro or Anti Britain. He is governed by the foreign policy and at present the mid term elections. Besides he must have read the history of what Britain did to Kenya, where his father came from.
The Global politics is full of self interest, double standard & hypocrisies. We have to accept this and try not to be whiter than white, there are skeleton in every nation cupboard.
On a one to one we should respect & treat all that share our planet and be constantly in touch with history and react to counter this through our own deeds and action on a day to day basis.
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Thank you, Chris. I overreacted to rudeness and dragged myself into the gutter while doing it.
Most of it has been said (back on the topic), but I would mention that I have a book on my shelves, Dreams From My Father, written by Obama, which I’ve read and it’s uncomfortable reading for anyone who still dreams of a special relationship between the UK and the US.
If that special relationship no longer exists, then as a small nation we can’t exist without trading with our neighbours, and 50% of our exports already go that way. Had we joined a common trading currency, we, and our neighbours would be better off, and the Euro would be much stronger than it is.
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@katy wrote:
So why then did the IMF visit Spain, was it a courtesy call and a cup of tea. Why have they not visited any other countries except Greece ❓
Not just about a country having debts it is the prospects it has to pay it off. How will Spain do that with 5 million unemployed and millions of unsold properties. Plus a dwindling share of the tourist market?
to try and create confidence it seems
http://news.bbc.co.uk/2/hi/world/europe/10355952.stm -
I don’t think Obama likes the British, he is also not very popular in the states either. All this sabre rattling is to detract from the criticism that he has done very little. Didn’t Obama’s Father piss off back to Kenya and had no contact with him?
I did not make a decision to live in Spain because I liked the idea of a United Europe, it was a lifestyle choice. No Government is perfect and if we were to choose where to live because of it’s politics then we would probably not move anywhere!
Don’t think the Euro is doomed, actually risen a few cents against the $ this week. Was a negative Spain news article in the Times today, can’t find it online
“The Fiesta is Over for Spend, Spend Spain” Claims that a million new properties are empty. Perhaps a little “hambre” may be good for Spain…they may get the customer service and value for money back! -
@katy wrote:
“The Fiesta is Over for Spend, Spend Spain” Claims that a million new properties are empty. Perhaps a little “hambre” may be good for Spain…they may get the customer service and value for money back!
Apart from the esteemed Mark, who certainly knows his stuff, in fact enough to state that half the time he can’t figure out what is what with the stats, I wouldn’t trust a thing the UK press say about the number of properties in Spain, they each pick the bones of the last one’s articles for their research.
But… I so hope you are right about customer service and value for money coming back.
I have friends who just came back from a holiday in Turkey, they holidayed with us a couple of times over the years in Marbella, but they simply would not dream of going there on their own, because of the cost of literally – everything.
The real crisis for Spain is not the construction industry – that has already gone, it is over for the foreseeable, they are having to live with it.
The problem is the price of a Gin & Toni, you will know Casi Casi in Elviria Katy, it is a dingy little hole of a place, really not the place to go for a G&T but over the years ideal for me, late at night having worked very late, just wanting to have a quiet drink, chat with the bar staff about just nothing and away home.
But I realised recently that my G&T costs €6 a pop, and I just can’t accept that – I really can’t, and if it is €6 there is €8 and €10 elsewhere and heaven knows what in Puerto Banus.
There is no value in that, I had a G&T in the most expensive bar here in Harrogate the other evening and it was £4.50 and my friends in Turkey were paying what £2 at most?
So, we went four of us after golf the other week, and we had three gins each and the bill €54 and I can’t see any value in that, when a bottle of Larios can’t even be €10 can it?
But it is the same with almost all the restaurants, everything is up, up, up and the customers are gone, gone, gone. That’s the crisis, the construction industry is annihilated, the one thing they have going for them is the TOURIST industry and they are killing themselves like lemmings over the cliff edge.
Good on La Cala Resort for the price of golf though, you can play four of you for €32 per head including the buggy during the extended summer season they have now, and that is value because that is cheaper even than I used to pay for the same 18 years ago.
Someone is wising up, up there, but the restaurants and bars, well they just haven’t got the message yet, yet again they will all be wanting to fleece the customer for the summer, hopefully squirrel enough money away to survive the winter, but next year…. there will be even less visitors because nobody wants to be ripped off and €6 for a G&T in a dingy bar is a complete rip off!
And yes, I know the Supermarkets et al, are all at the same game, it is madness, truly madness. If property has dropped by 30% you would think the bar owners would cotton on and do the same – at least.
In fact I may even open my own bar with no drink more than €3 i reckon it would be packed night after night, and Casi which used to be till late hours, had three people in it when we were there.
Value for money is everything!
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A couple of things.
There was an article in Saturday’s Telegraph about the distinct possibility of a Two Tier Euro, a stronger one for the Northern Euro countries like Germany/France etc and a weaker one for the Southern Med. countries Spain/Portugal and even Ireland included in the weaker one. Not sure how this would impact on Eurozone.
Does anyone know if Solbank are in any way involved with Lloyds Bank, or if not Solbank then which Spanish Bank may be involved with Lloyds?
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@katy wrote:
To be fair Chris the UK G&T is much smaller than a Spanish one 🙂 I think Larios was about 10.90 a bottle when we left. Waitrose and others often sell their own brand at about £12.90 so even the alcohol prices are narrowing.
The La Cala offer is good!
PS….I didn’t like Turkey.
I know the G&T’s in UK are smaller, always have been but are they as small as they used to be? Seems to me that the measures I get these days look bigger than the piffling little things I used to get say 10 or more years ago, when I would always order a double.
These days if I order a double it seems as big or bigger than Spain.
I remember years ago getting smashed in Dublin cos I didn’t realise that Irish measures were bigger than the UK, and I had been drinking lots of doubles!!
But it doesn’t seem like you get a stupid wine glass with a teaspoon amount of spirit in it anymore, did the measures change… looks like a proper G&T to me.
And most importantly, feels like a Spanish one, looks like a Spanish one, and costs a lot less or maybe nearly the same if doubled up without the chaser!
And couldn’t believe it yesterday was getting the paper from a local garage, and it has a Co-op shop as part of the whole set up thing, and there stacked up were boxes and boxes of beers of all sorts, £18 for two cases of beer, and 15 beers to a box, OK smallish bottles but bloomin heck, really…Spain don’t have a chance if UK alcohol stays as cheap as this.
La Cala is leading the way I think, gonna have to be a lot of people follow their example though to turn everything around.
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Chris with your business and marketing experience you should set up a chain of bars in Spain similar to Weatherspoons. 😉
One of the beach restaurants in Elviria was charging 102 euro for Moet y Chandon last year. Was about 29E in the supermarket..some mark up! The Beach House gave us a surcharge of 2 euro for 2 drinks. I queried it and was told it was because we had sat at a table with a tablecloth on it…we were the only people there, it was late afternoon! Another on the same stretch, we asked for aceitunas with our drink…they charged us 3 euro for about 12.
Anyway back to the banking crisis. Not heard any bad news today, probably be plenty from the UK tomorrow.
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@katy wrote:
Chris with your business and marketing experience you should set up a chain of bars in Spain similar to Weatherspoons. 😉
Iz u sayin… I aint got no class…?
Oooh that was low, we have Weatherspoons in Harrogate, actually it gets very busy, and is not half bad, in a great building and yep cheap prices.
Maybe the Crisis, the Economy, is all going to quieten down a little bit?
I was reading David Smith in the Sunday Times a few weeks back, and he seemed to be saying, that underneath it all, this time next year, everything is going to be looking far rosier than now, and maybe with sell off of the bank stock the government owns, and a heap of other indicators, well we just be in a far better position and well on the way out of recovery into whole new growth.
If Spain has truly dodged the “Greek Drama” and I pray it has, and both the UK and Spain just get on with the austerity packages, does it all go away some time soon?
What we going to have to talk about then? This forum has few enough contributors these days as it is – good thing in my opinion though – really very interesting people on here these days I think.
Is it over, and we just don’t know it?
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This forum has few enough contributors these days as it is – good thing in my opinion though – really very interesting people on here these days I think.
The forum is looking pretty good of late. It’s mostly interesting and worthwhile reading…no diatribe…on the whole! 😉
Going back to G&Ts, we used to buy Larios at around £5 a litre bottle. I prefer it to Gordons. We had 15 botts amassed at one stage!
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I’ve read with interest the posts over the last few days advocating UK membership of the eurozone.
Although as some of you may be aware, up to about a couple of years ago I too would have supported the idea of joining the eurozone for the reasons already mentioned in some of the posts. It has taken a world recession on a scale that no one could have imagined to alter my view. The euro in my opinion was always a leap of political rather than economic faith. On reflection members of eurozone placed too much emphasis on the positive aspects of a common currency rather than taking into consideration the uncomfortable negatives flowing from their fiscal independence and differences in their economic profiles and cycles. During a long spell of bouyant world trade the euro did indeed appear to be a strong currency and in one of his posts Chris appears to take the view that a strong euro is something to be admired. This is not neccessarily the case. A strong euro may be the result of high interest rates or strong economic growth. If it is the latter it doesn’t neccessarily mean that the economic growth is evenly spread across member states. A stronger euro would be welcomed by Germany, which already has a very competitive economic base. However, the last thing that Greeceand Spain need at the moment is a strong euro. This reveals some of the fault lines within the common currency trading area.
Unless there is a fundemental shift in culture, investment, law, training, economic and commercial practices, Spain and Greece will increasingly be left behind in the economic stakes and membership of the euro will increasingly be seen as a straight jacket. They are now having to take unpalatable decisions, forced upon them not only by the markets but also more vigorously by other eurozone members, which are deeply unpopular within their societies. When people begin to associate the austerity measures with eurozone membership there may be a backlash. Certainly there would be in this country.
Fortunately in our case we have been able to use a wide range of measures to tackle the economic problems, which are not available to Greece and Spain. The most notable one being able to devalue our currency inorder to regain competitiveness. It is interesting to note the comments regarding the high prices of products in Spain. Bearing in mind the importance of tourism in the country, particularly in some of the Regons, they are in danger of losing market share to other countries whose cost of living is far less.
Whilst I agree that the UK may be vulnerable to negative currency fluctuations, in a way in which a powerful trading block is not, at this point in time it seems a price worth paying. However, like most things time will tell whether the UK’s decision to remain outside the eurozone was a good decision or not.
Having said all of that I must confess that if I was living in Spain on a UK pension I would be strongly advocating eurozone membership purely for selfish reasons. 🙂 🙂
Richard
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@rt21 wrote:
It has taken a world recession on a scale that no one could have imagined to alter my view.
RichardThat’s the thing though isn’t it, I was all gung ho Euro, then I hadn’t a clue, then I figured jeeze we lucky we are not in it, now am thinking if we had, how much different a position would we actually be in?
And as you are way smarter in this area than I am, I am interested to know, in your opinion rt21 who is managing the whole collapse better is it the Eurozone or Britain?
Isn’t it all swings and roundabouts really.
The view is constantly changing at the minute, all because of this cataclysmic financial crisis, that yes no one ever imagined, but still how many people have truly felt the impact of yet as individuals?
In the end, doesn’t it all boil down to operating within the system of a single currency would be better, and we learn to live with the drawbacks and benefits of that really? Should the recession actually have changed your view? Perhaps you were right first time.
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Chris, you are so right about prices !! rip off Costa is our biggest threat to survival; not the Euro, interest rates, unemployment etc – just overpriced, shitty service and no value !!!
Everyone is moaning and of course voting with their feet; even the thousands of property owners who have to come over are not itching with excitement each time they land at Malaga airport –
I could handle a €5,00 G/T if it was served in a large glass with 75ml of gin, (the old measure here) real tonic, a small plate of almonds, olives and a smile (not a scowl) – but no, it’s a tubo glass with 25ml and a bad attitude – maybe the locals really do need to be on their knees with blood on their face before they wake up –
There are a few good bars/ restaurants offering great value and quality and that’s why they are still full; (not talking about the losers doing €20 menus, or eat all the rubbish you like for a tenner) !!!!!!!!!
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@UBEDA wrote:
Chris, you are so right about prices !! rip off Costa is our biggest threat to survival; not the Euro, interest rates, unemployment etc – just overpriced, shitty service and no value !!!
Everyone is moaning and of course voting with their feet; even the thousands of property owners who have to come over are not itching with excitement each time they land at Malaga airport –
I could handle a €5,00 G/T if it was served in a large glass with 75ml of gin, (the old measure here) real tonic, a small plate of almonds, olives and a smile (not a scowl) – but no, it’s a tubo glass with 25ml and a bad attitude – maybe the locals really do need to be on their knees with blood on their face before they wake up –
There are a few good bars/ restaurants offering great value and quality and that’s why they are still full; (not talking about the losers doing €20 menus, or eat all the rubbish you like for a tenner) !!!!!!!!!
you forget though that for some “all you can eat for a tenner” is all they can afford for a night out and if it becomes a choice of staying in or having an “all you can eat ” and a social life i think alot will choose this.i personally would go with a bbq and friends round but thats me.
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Does today’s English budget have anything to do with the subject of this thread? If it doesn’t, I’ll be in trouble again, but I’m going to try and talk my way out of it.
I was surprised by the benign nature of the budget and could feel the steadying hand of Clegg on Cameron’s shoulder. I was disappointed that neither the markets nor the Euro moved, but for selfish reasons.
Declaring my usual European and particularly Spanish interest, I’m heartened that Clegg’s wife will stick up for Spain and Clegg won’t forget his time in Brussels.
I’m a bit worse off because of the budget, but I pay 4,50 Euros for a DYC whisky and coke here; I can’t compare the prices because I put water in it in the UK, and it’s a whisky distilled in Scotland.
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@adiep wrote:
Made me laugh, apparently we have had a treasury department (for quite some time) that has been dedicated to preparing to join the Euro. Osborne stated the department had been reassigned and put to work on something a little more productive.
I think that department has been re-assigned to join the ever-growing one to deal with full Scottish independence. As far as England is concerned, the Euro is truly dead in the water, but I think that Scottish voices may be taking up the Euro hymn sheet, even if it’s just to spite the auld enemy.
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Over on Edward Hugh’s facebook blog someone has just pointed to the piece in the Guardian from 2006. It shows great foresight on the part of Larry Elliott their economics editor.
http://www.guardian.co.uk/business/2006/jun/19/theeuro.europeanunion
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They say ‘the devil’s in the detail’
The new CGT raised from 18% to 28% immediately but for higher earners. When analysed it shows that a low earner who has a capital gain that pushes his combined earnings and gains to £43400ish must pay the higher rate of 28% on his gain, this wasn’t apparent at 1st until the boffins studied the detail.
So, UK residents in Spain who’ve made a profit on Spanish property and if they still own a UK bolthole will fall foul of this new CGT hike!
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Hi Chris
I have just read your latest post. I think your question about who is managing the whole collapse better – Eurozone or Britain – is impossible to answer. Remember that the Eurozone is not a country nor a state, so comparisons would be very difficult even for a trained economist, which I am not. The problem is that the Eurozone is a collection of states, each sharing a common currency, but facing quite different economic problems. If we take Germany for instance they have a declared policy of building trade surpluses with the rest of the world. They have the infrastructure, investment, training, economic practices, culture etc to sustain this. Spain on the other hand has a very under developed and uncompetitive economy compared to Germany. So it’s not surprising that Germany has been building large trade surpluses with Spain. To sustain this imbalance Spain has to borrow money from other sources to pay for it. It cannot continue for ever with such a state of affairs otherwise it would become overburdened with debt. In the real world these trade surpluses would diminish as the country with the deficit devalued its currency. But Spain cannot do that.
Unlike the UK, Spain is not only having to address the economic problems emanating from the credit crunch but also those emanating from its membership of the eurozone. A one size economic policy for eurozone members is only effective if all members are facing the same problems and for that matter the same size of problems. Clearly this is not the case. Spain is having to suffer the harsh consequences of having had low interest rates set by the European Bank at a time of economic boom in Spain and of not being able to readjust its competitiveness with Germany through currency devaluation. Someone in Spain facing a cut in wages or pensions or benefits or the worse cut of all a loss of job may well feel that it isn’t just a matter of learning to live with the benefits and drawbacks. In my opinion this is where idealism and realism clash full on.
Richard
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The musings from a speech yesterday by Uncle George Soros, the man who broke the Bank of England, and the consequence of Germany leaving the Euro…..
...And there would be other compensations: pensioners could retire to Spain and live like kings, helping Spanish real estate to recover….
😀
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I think the George Sorros article pretty well sums up the difficulties faced in the eurozone
My ony divergence with his views is on the topic of (German) “pensioners could retire to Spain and live like kings, helping Spanish real estate to recover” The Germans are too astute not to see the trap that would await them should they consider buying property in Spain.
Richard
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@iano wrote:
The musings from a speech yesterday by Uncle George Soros, the man who broke the Bank of England, and the consequence of Germany leaving the Euro…..
...And there would be other compensations: pensioners could retire to Spain and live like kings, helping Spanish real estate to recover….
😀
Soros “scenario” would then be:
– Germany leaves Euro and goes back to DM.
– DM goes from .5 Euro as it was in 2001 to like 5 Euros per DM.
– Pounds goes from 1.2 Euros per £ to like 12 Euros per £.
– a 120K Euros apt. in Spain would then be £10K or 24K DM. For the cheaper apartments, people will decide between buying a used Kia Picanto or an apartment in Spain…
– Everybody in Germany and UK would queue to get the bargains and live like kings.
Is he right? 😀
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@flosmichael wrote:
@iano wrote:
The musings from a speech yesterday by Uncle George Soros, the man who broke the Bank of England, and the consequence of Germany leaving the Euro…..
...And there would be other compensations: pensioners could retire to Spain and live like kings, helping Spanish real estate to recover….
😀
Soros “scenario” would then be:
– Germany leaves Euro and goes back to DM.
– DM goes from .5 Euro as it was in 2001 to like 5 Euros per DM.
– Pounds goes from 1.2 Euros per £ to like 12 Euros per £.
– a 120K Euros apt. in Spain would then be £10K or 24K DM. For the cheaper apartments, people will decide between buying a used Kia Picanto or an apartment in Spain…
– Everybody in Germany and UK would queue to get the bargains and live like kings.
Is he right? 😀
if he is and that happens i’ll eat my hat whilst sitting in my newly acquired spainish villa and retiring at the age of 42
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@rt21 wrote:
Hi Chris
I have just read your latest post. I think your question about who is managing the whole collapse better – Eurozone or Britain – is impossible to answer. Remember that the Eurozone is not a country nor a state, so comparisons would be very difficult even for a trained economist, which I am not.
RichardWell it was a great answer, you sure a lot more of an economist than I am, it really helps to understand the picture in this way, thanks.
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@flosmichael wrote:
@iano wrote:
The musings from a speech yesterday by Uncle George Soros, the man who broke the Bank of England, and the consequence of Germany leaving the Euro…..
...And there would be other compensations: pensioners could retire to Spain and live like kings, helping Spanish real estate to recover….
😀
Soros “scenario” would then be:
– Germany leaves Euro and goes back to DM.
– DM goes from .5 Euro as it was in 2001 to like 5 Euros per DM.
– Pounds goes from 1.2 Euros per £ to like 12 Euros per £.
– a 120K Euros apt. in Spain would then be £10K or 24K DM. For the cheaper apartments, people will decide between buying a used Kia Picanto or an apartment in Spain…
– Everybody in Germany and UK would queue to get the bargains and live like kings.
Is he right? 😀
I can’t stand the man for what he did when that clown, Lamont, was singing in his bath, and strongly suspect that Soros is again obeying orders from his US paymasters, but if he’s right, I would personally benefit greatly.
But I don’t think he is right, the US is desperate to stop Germany and the rest of the EU from making austerity cuts, which is the opposite to current US policy which is based on borrowing for ever more to prop up a failing Dollar and stop US unemployment from going through the roof.
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Whilst George Sorros and Obama might share the same views about European economic policy, I think their views stem from different perspectives. Undoubtedly Obama’s is based on self interest in the American economy.
The more I think about the eurozone the more convinced I am that something has to give. Something has to change because the current situation cannot be sustained. The Club Med countries cannot keep slashing wages, pensions and public spending in order to try to keep up with Germany in terms of competitiveness. Labour rates are just one component of competitivness. Germany has distinct advantages in those other areas that affect competitiveness such as a highly skilled workforce, modern and highly productive equipment, high investment in research and development etc etc. The Club Med Countries would find it difficult nigh on impossible to compete in those other areas.
Quite whether Germany leaves the euro, Club Med countries leave the euro, or the eurozone takes other drastic policy decisions to
address the fault lines remains to be seen. These are very uncertain times for those who own or wish to own property in Spain.Richard
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With at least 20% unemployment rates, Spain must be looking for a knight in shining armour to appear from somewhere, anywhere. I think the unemployment rate was caused by the failure of the construction industry, rather than their membership of the Eurozone making currency devaluation impossible.
I read earlier that the troubled Greeks are hoping to sell islands to the Chinese and Russians to ease their woes, and that was in a respected UK newspaper. It seems European politician’s don’t know what to do next, leaving the media free to speculate with ever-increasing madness.
Spain has never asked for a bail-out, yet commentators are reporting on it daily. Conspiracy theories fly around the media at the touch of the Send button; I was going to say that the good old independent financial markets are the only true source of what is really happening, but those investors read the Times and Telegraph on their way to the City, and get spooked easily (just like the rest of us).
While walking around my little part of Spain yesterday, I saw a Vendido (Sold) sign on a villa that had been up for sale for years. I felt like rushing home to get my camera to send a photograph to some of those respected financial journalists reporting the imminent collapse of Spain based on no evidence whatsoever, and I may still do that.
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I think the unemployment rate was caused by the failure of the construction industry, rather than their membership of the Eurozone.
Rocker, I don’t know if you have read the 2006 Guardian article that I linked to above, but it does explain the situation then and what we are now seeing with regards to euro membership rather well.
The collapse of the construction industry is without question a significant factor in the, now very high, unemployment rate. That said, it in turn has come as a result of the earlier boom that was, in good part, fed by imbalances caused by the creation of the Eurozone. IMO you simply can’t say it was one or the other. They are both linked.
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I think Brian is spot on when he links eurozone membership to inappropriate lending rates set by the European Bank, which led to the construction boom in Spain. It also led indirectly to Spain diverting significant scarce resources from what I would call productive industries into the construction industry. This resulted in Spain having to import some of the goods that it could have produced itself and also not being able to export some of those goods as well.
I don’t wish to sound unkind but a “sold” sign on one house provides no indication of the economic health of a country no matter how long that house has been on the market.
Richard
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During the last recession in the UK, a friend had their house repossessed by Barclays. Value at the time, even considering the recession, was approx £350,000 (pre-recession, similar neighbouring properties were exchanging at around £500,000).
The house had a £150,000 mortgage outstanding, and the bank ended up selling it PDQ for £175,000 (to a member of Barclays Mangement Team my friend later found out 🙄 ).
I’m not necessarily referring to the property that Rocker mentioned, but I do wonder how many house sales in Spain are going in a similar way, boosting the ‘sold’ figures but are virtually being given away at more or less only the value of the outstanding mortgage. I know this topic has been discussed here before but are the banks in Spain still holding on to these properties or are they beginning to let them go as things get tighter?
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I have never seen a “vendido” sign anywhere in Spain, they don’t do it.
Spain’s problem has always been jam today, bread tomorrow. When they entered the EU money was flowing into the country for infrastructure etc. Just like the construction boom they thought it could never end. Companies didn’t budget for r&d and the older hotels haven’t been upgraded and many are still in a 70’s time warp.
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@charlie wrote:
….. I know this topic has been discussed here before but are the banks in Spain still holding on to these properties or are they beginning to let them go as things get tighter?
Therein lies the huge problem and difference.
I think Fuengi might back me up here.
The properties that the banks have, that they have respossessed, that they do have for sale, do not simply have €150k outstanding mortgages and can sell PDQ for €175k thereby getting the problem off the banks books.
Oh no, the bank has the property, bought for €300k by the defaulter, with a mortgage of that amount (100%) because the broker and the developer connived to say the sale price was €360k and the bank now has the keys and a €300k mortgage outstanding, but a sale value of €220k.
So, I don’t know about Fuengi, but we hear of the odd bank property here and there, have been offered keys to a few and have actually turned them all down, because there are better deals from private vendors than banks.
How could the banks have let this happen? Well we have had all those responses, but I believe until years go by, the property value is allowed to be written down and down, inflation comes into play, prices eventually rise, and or some other deal is done to write off the losses, then those properties will sit and fester.
Because I would say in 10’s of thousands of cases, banks have properties that would only sell for €100,000 less than the mortgage outstanding.
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Spot on Chris. The banks wouldn’t be in the pickle they are now in if they had sufficient equity in the properties they have repossessed. It is only when they are forced by the BoS, who in turn are having their arm twisted by the ECB, to write off a higher percentage of these assets that we’ll see them selling at realistic prices.
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@Chris McCarthy wrote:
Oh no, the bank has the property, bought for €300k by the defaulter, with a mortgage of that amount (100%) because the broker and the developer connived to say the sale price was €360k and the bank now has the keys and a €300k mortgage outstanding, but a sale value of €220k.
So, I don’t know about Fuengi, but we hear of the odd bank property here and there, have been offered keys to a few and have actually turned them all down, because there are better deals from private vendors than banks.
For serious negative equity cases as you describe above though Chris, isn’t there a set procedure the banks have to follow through the courts before repossession? The property usually then being put up for public auction by order of the Judge? The bank has the authority to chase the borrower, wherever they are, for any shortfall between the auction sale price and outstanding mortgage?
Only ever thought a bank would accept keys from an owner as long as there’s no negative equity, but could be wrong.
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@katy wrote:
I have never seen a “vendido” sign anywhere in Spain, they don’t do it.
Yes they do. (well some do, some don’t)
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@Chris McCarthy wrote:
@charlie wrote:
….. I know this topic has been discussed here before but are the banks in Spain still holding on to these properties or are they beginning to let them go as things get tighter?
Therein lies the huge problem and difference.
I think Fuengi might back me up here.
The properties that the banks have, that they have respossessed, that they do have for sale, do not simply have €150k outstanding mortgages and can sell PDQ for €175k thereby getting the problem off the banks books.
Oh no, the bank has the property, bought for €300k by the defaulter, with a mortgage of that amount (100%) because the broker and the developer connived to say the sale price was €360k and the bank now has the keys and a €300k mortgage outstanding, but a sale value of €220k.
So, I don’t know about Fuengi, but we hear of the odd bank property here and there, have been offered keys to a few and have actually turned them all down, because there are better deals from private vendors than banks.
How could the banks have let this happen? Well we have had all those responses, but I believe until years go by, the property value is allowed to be written down and down, inflation comes into play, prices eventually rise, and or some other deal is done to write off the losses, then those properties will sit and fester.
Because I would say in 10’s of thousands of cases, banks have properties that would only sell for €100,000 less than the mortgage outstanding.
I do. (will try and add something more constructive later)
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Curiosity drove me back to the nearby house with the Vendido sign, and I took my wife along as an independent witness, although she didn’t know it and thought we had gone out to post some letters, visit the cash point, and linger over coffee.
The sign had gone and we found an army of painters crawling all over the house. Spanish house painters are talkative people and we found out that the house had been sold by Spanish owners to new Spanish owners, but they didn’t know whether the asking price, 440K, had been achieved.
Unfortunately, we also passed a Farmacia which had just had a new super-duper machine installed which measures everything, from body mass to blood pressure and everything in between for a Euro. I spent the Euro under her watchful eye and now need to adjust certain aspects of my lifestyle. But I’m going back on my own next week to have it checked again, I’m sure her presence put up my blood pressure.
While lingering over coffee, I read this article in the local newspaper, which I found both funny and sad, and very relevant.
http://www.costa-news.com/index.php?option=com_content&task=view&id=5459&Itemid=122
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Unfortunately, we also passed a Farmacia which had just had a new super-duper machine installed which measures everything, from body mass to blood pressure and everything in between for a Euro. I spent the Euro under her watchful eye and now need to adjust certain aspects of my lifestyle. But I’m going back on my own next week to have it checked again, I’m sure her presence put up my blood pressure.
That’ll be the golden nectar that’s done that Rocker…not your wife!! 😆 Just walk on by next time.
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@iano wrote:
For serious negative equity cases as you describe above though Chris, isn’t there a set procedure the banks have to follow through the courts before repossession? The property usually then being put up for public auction by order of the Judge? The bank has the authority to chase the borrower, wherever they are, for any shortfall between the auction sale price and outstanding mortgage?
Only ever thought a bank would accept keys from an owner as long as there’s no negative equity, but could be wrong.The rules are indeed much as you describe, but then like so much else, the rules have been thrown out of the window really.
And be the banks chasing tens of thousands of people for the money, the money they stupidly lent in the first place, and then ensure the owners comply… just won’t happen.
People don’t even bother with the keys anymore, in these circumstances they just stop all contact and leave the banks to it, and the banks have only themselves to blame.
A friends cleaner bought a €150,000 flat, with 100% mortgage that the bank knew all about, they just wanted to get the mortgage, now the flat is worth €100,000 and a monthly mortgage of something like €1,500 so my friend told his cleaner to just walk away, even if they embargo her wages in future it is only to an amount above the working minimum wage, and she gets the minimum wage.
The last I read there were 86,000 of these cases last year, in the past the bank may have had a chance, not this time, way to many people to chase.
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@Chris McCarthy wrote:
And be the banks chasing tens of thousands of people for the money, the money they stupidly lent in the first place, and then ensure the owners comply… just won’t happen.
People don’t even bother with the keys anymore, in these circumstances they just stop all contact and leave the banks to it, and the banks have only themselves to blame.
A friends cleaner bought a €150,000 flat, with 100% mortgage that the bank knew all about, they just wanted to get the mortgage, now the flat is worth €100,000 and a monthly mortgage of something like €1,500 so my friend told his cleaner to just walk away, even if they embargo her wages in future it is only to an amount above the working minimum wage, and she gets the minimum wage.
The last I read there were 86,000 of these cases last year, in the past the bank may have had a chance, not this time, way to many people to chase.
I (and many others) predicted this would happen about 3 years ago. It was clear that the banks cannot chase hundreds of thousands of defaulters.
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For purely personal reasons directly connected with Spanish property, I posted the link concerning Sean Connery being charged with fraud and money laundering by the Spanish authorities when he sold his house in Marbella (Puerta Banus), some 14 years ago.
What amused me was that Connery was given 30 days to pay a ‘civic responsibility’ bond of 3.3 million euros. Whether alternatively, or additionally, it appears that fraud and money laundering charges still apply. He must already have paid at least that amount to Jesus Gil and his gang at the time, but could he raise that in his defence?
The developers had permission to build four houses on Connery’s land but built 70 apartments instead, common practice at that time, making 53 million in profit and avoiding three million in tax, which looks as if Connery will have to pay all those years later.
You can say what you like about the slowness of the Spanish justice system, but they don’t give up easily. A related article states that 25 people are being put on trial, in Marbella, for this particular fraud.
If I was 007, I would put a cheque in the post, immediately.
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@Rocker wrote:
The developers had permission to build four houses on Connery’s land but built 70 apartments instead, common practice at that time, making 53 million in profit and avoiding three million in tax, which looks as if Connery will have to pay all those years later.
If I was 007, I would put a cheque in the post, immediately.I wouldn’t believe everything you read Rocker, lets not knock someone that we have no real clue about what their involvement may or not have been.
All the more so when you suggest, that a 53 million profit was made on 70 apartments, I would like to see how that is done actually, I mean after land, construction and the taxes that do have to be paid regardless of corruption, it would be going some to make almost million euro profit on each apartment.
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I agree with not believing everything you read, Chris, but in this case the source appears to be the prosecution authority in Spain, and I wouldn’t knock Connery who was only doing what everyone else was doing.
I have some knowledge of the system as it was in Marbella some 14 to 20 years ago, and if a businessman followed the advice of his highly respected lawyers, bank managers and other top level political advisors, how could he possibly know that he was doing anything illegal?
Discounts for cash payments are the norm in most countries, and especially in Spain. A simple example would be a cash payment of £5,000 to the agent on buying a business, the cost of which would then be reduced from 250 to 200K. It’s an offer you simply can’t refuse.
Us UK expats can sit in our comfortable armchairs and shake our heads in wonder when yet another Spanish corruption case is exposed, but have we forgotten about our cash for peerages? Our MPs flipping houses?
I had some major work done on my swimming pool last year and got several quotes from reputable local, Spanish companies. Every one of them offered me large discounts for a cash payment and an IVA receipt was a dirty word for them.
I suppose it’s merely a question of scale and our own level of hypocrisy.
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