Business Over Tapas

Editorial:

With everyone blaming everyone else (here, here, here and here), it’s almost certainly new elections then for Sunday, June 26th (the King has until May 1st to approve some improbable political solution). Will people vote for the same party (a poll says that they will), or perhaps another party this time, or might they just stay at home, fed up with the whole sorry process, allowing a change in the results...? Best of all (which no one seems to be asking) – what will happen if we reach another stalemate?

If there were some changes in the proposals – new candidates or ideas – then perhaps the votes too would change. The nearest thing we have to a blip being a possible union between Podemos and the Izquierda Unida (or part of it, if it dissolves). Perhaps this time Ciudadanos will lose a few votes for its willingness to join either the Partido Popular or the PSOE as a junior partner. Perhaps this would be seen by some as a strength. Was Rajoy right to not move an inch towards the other parties (El País thinks so).

Would a really good corruption scandal help crystallise votes? On the current evidence – it would seem that the answer to this is ‘no’.

The Spaniards who live abroad, perhaps unhappy with being obliged to be away from Spain, may not want to support the Partido Popular, but, with only 54 days to re-register, they will be hard pushed to obtain the vote anyway.  

A suggestion floats that this campaign should enjoy reduced spending – a normal one costs 130 million euros to the taxpayer and another 30 million between the parties.  We could have had a two-round system... or a non-partisan independent president, but instead, we are trying the same thing again and hoping for a different result.

No one wanted a new election, but thanks to poor political savvy, this is what we must have.

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Housing:

 ‘Over 40 per cent of all Spanish property rentals are not declared to the taxman. Rental income fraud is more common in Southern Spain than in the north’. Hacienda reckons on around 41.4% of all rentals going undeclared, says Spanish News Today. ‘...This is the figure for the whole of Spain, but the regional breakdown identifies a clear tendency for undeclared rentals to be far more common in the south and the islands. In Murcia, the percentage of undeclared rents rises to 61.1%...’.  

What might happen to the real-estate market following a ‘Brexit’? Mark Stücklin answers.

‘Mojacar Estates, a property sales and holiday rentals agency, recently published a comprehensive property buying and renting guide titled "Guide on How to Safely Buy or Rent Properties in Spain". The real estate market trend analysts of the agency told the press that for the first time in last few years, there is a high demand for Spanish properties. They, therefore, decided to compile and put pertinent information in a guidebook so that prospective buyers and tenants can find the properties of their choice. The introduction from Digital Journal. Could be useful for those thinking of investing in Spain.

‘Norges Bank Real Estate Management has sold a 50 per cent interest in two logistics properties in Spain for €25.1m, on behalf of the Norwegian Government Pension Fund Global. ... The two properties have a total leasable area in excess of 96,000 square meters. The buildings are located in Zaragoza and Valencia...’. From European Pensions.

‘Barcelona has started the first proceedings against illegal tourist rentals, the local press reports. The authorities have started at least three legal proceedings against home owners in Barcelona accused of engaging in short-term tourist lets without a licence. The city government recently extended a ban on all new tourist rental licences, with around 9,600 licences already issued to date. Demand for tourist rentals in Barcelona is strong, and owners can earn good returns from short-term rentals. Illegal rental is the only option for owners who didn’t get a licence before the ban was introduced...’ From Mark Stücklin’s Spanish Property Insight.

‘Is the Spanish economy coming back from the brink?, asks BoT reader Sergio Burns in Business Review Europe.

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The Prior Case:

‘The Vera Town Hall must pay 425,185 euros to the Prior family for the demolition of their home’. Headline at Almería Hoy.

Much will be written this week about Leonard and Helen Prior, unwillingly become, through circumstance, the most famous Britons living in Spain. The couple whose house was demolished in a cowardly and stupid miscalculation back in Vera (Almería) in January 2008. The Priors lived in a house which was not on a flood-plain. Their house was not in a place of singular beauty, nor on the beach, nor near the road or the railway tracks. It wasn't on any plan for expropriation. The Priors were - and are - a simple British couple who had retired to Spain, after a professional life in England, to enjoy their twilight years with a glass of red as the sun sank each evening over the hills before them.

It's not clear why their house was chosen and not one of the others that loosely surrounded them. Perhaps they were foreigners, who would simply disappear back to the extranjero.

But they didn't. They moved into the garage, making a home in a small space, with hose-pipe water and a generator for electricity - as so many other retired foreigners have been forced to do in Andalucía. They appeared on British TV, repeatedly. They were in all the British newspapers, repeatedly. They were recorded on the BBC and in other European Media, repeatedly. Millions read about what the Spanish had done to an innocent couple in the final years of an uneventful life.

Now, once again, Leonard and Helen Prior are in the news. This time, even the Spanish news. A happy event: the judicial system here has blamed the local town hall. Not the perpetrators of the assault, but the local authority, who gave permission for the home to be built. They must pay around half of the money claimed by the couple, and failing an appeal (which will be made, sure enough), the Priors will be awarded enough to buy a smaller house somewhere - maybe in another more welcoming area! Unfortunately, the 'costs' - the gigantic legal fees (after over eight years) to be shared.

A much smaller house, maybe something nice in India.

Andalucía is almost proud of its '300,000 illegal homes': as if no one knew about these houses built mainly for speculation in this large and impoverished region. Many of the builders were hidden, as often happens here, behind simple 3,000 euro companies. What could go wrong? Many buyers were caught in these traps: many northern Europeans - and the horror stories were told again and again in the European Media. So, how did the Junta de Andalucía (which 'chips' all the animals in the region, even the goats, and knows everything that must be known), fail to notice the construction of 300,000 houses, many even in illegal urbanisations? A similar number of dwellings to the city of Málaga!

Andalucía, an area with the highest unemployment in Europe, an area without much agriculture or industry, is perfect as a place to retire to: a European answer to Florida. What could possibly be wrong with this? Remember that Southern Florida, in the USA, has unemployment of around 5%.

But let us not dwell on the Priors, victims of circumstance. We should be sparing a thought for the Andalusian people. How many jobs have been lost or will never be created, and how much money has not been invested in this region from abroad thanks to the actions of the Junta de Andalucía and the wretched 'ecologists'? Comment from Lenox.

Tuesday 4.00pm: Vera Town Hall is appealing the sentence.

Press release: AUAN SAYS ‘ENOUGH IS ENOUGH’ IN THE PRIOR’S CASE’

In what could prove to be a hollow victory, Contentious-Administrative Court number 3 in Almería has ordered the Town Hall of Vera to pay compensation of 425,185.43 Euros, plus interest, to Helen and Len Prior whose home in Vera was demolished in 2008 despite having planning permission from Vera Council, when the regional authorities challenged and revoked the permission and sent in the bulldozers.

The problem, according to AUAN, is that this judgement can be appealed and the possibility of future legal actions by the Town Hall could further delay compensation for Mr and Mrs Prior.

Faced with this, AUAN is once again demanding justice for the Priors. According to Maura Hillen, president of AUAN, ‘ Enough is enough. The Calvary of the Priors had lasted for nearly ten years. They did nothing wrong except to trust the Spanish State and its legal system. Now is the time to pay them and to put an end to their odyssey, which is so harmful and damaging for them and for everyone who lives here. Whilst fortunately things have changed for foreign investors as a result of legislative changes in the last year, those changes have come too late for Helen and Len Prior’.   

Added Mrs Hillen, ‘We ask that the Priors be compensated once and for all. It is not acceptable that they must continue to live in their garage suffering continuous moral damage. The house of their dreams was demolished before their eyes, they had to empty it of furniture in a few hours with the support of their neighbours, Mr Prior collapsed due to the stress of the demolition, he had to spend some time in a wheelchair and as if that wasn’t enough some lowlifes recently stole their belongings from the garage in which they live.’ ‘Enough really is enough.’  She repeated.

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Tourism:

As reported in BoT a couple of weeks back, the Balearics will now have a modest ‘ecotax’ from June 1st. This will cost up to two euros a day and will help repair and conserve the islands. Here it is misreported badly in a British newspaper: ‘Anyone travelling to Spain after July 1 will be hit with up to £70 ‘tourism tax’ just for visiting’. Ah well...

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Finance:

Whoever wins the elections, the accounts will still need trimming. To control the national deficit will mean a cut of 4,000 million euros to reach the 2016 target of 3.6% over the GDP. Half of these cuts will be the responsibility of national government, the other half will come from the regional governments, with Aragón, Cantabria, Castilla y León, Castilla-La Mancha, Cataluña, Extremadura, Comunidad de Madrid, Región de Murcia and the Comunidad Valenciana bearing the brunt. El Huff Post has more. Brussels says that Spain has the second highest deficit in the EU, at 5.1%. El Español says: ‘The beginning of the debate on possible sanctions by the European Union to Spain for her excessive deficit. The EU statistics office, Eurostat, shows that Spain has the second highest deficit in the EU. The final figure validated by Brussels, which includes aid to banks, amounting to 5.1% of the gross domestic product...’.

‘Since the granddaddy of all housing bubbles popped in Spain between 2008 and 2009, unleashing one of the deepest recessions in living memory, the nation’s public debt has more than doubled, from just over 40% of GDP to almost exactly 100% today. Last year, despite the fact that Spain grew faster than almost any other European economy, the government managed to rack up a deficit of 5.2%, one full percentage point above the target that it had set itself a year earlier and over three percentage points above the Eurozone average...’. From Wolf Street, which later in the same article moves to the political scene: ‘...Now in a strictly caretaker capacity, the government must try as hard as it can to pretend that it is doing everything it can to reduce this year’s budget, while doing absolutely nothing. Meanwhile, Europe’s Commissioners will work tirelessly around the clock trying to present the illusion that they actually believe them...’.

‘Brussels has frozen 1,122 million € of Spanish regional funding because of their deficiencies. The problem concerns the budgetary years 2007 to 2013 according to the community spokesman, Jakub Adamowicz. The blockage results from the number of detected deficiencies in the management and control of the funds, and affects around 22 subsidised programs. Nearly all the defects were detected by the regional or national authorities and have to do with the lack of a control system on the subsided programs. To remedy the situation an ‘action plan’ has been put into action, of which ‘some are already quite advanced’ according to Adamowicz’. From Typically Spanish. Also at El País here.

The five regions of Europe with the highest unemployment (latest, 2014 figures) are all Spanish. These are Andalucía, Canarias, Ceuta, Extremadura and Castilla-La Mancha – all at over 29% unemployment. The highest being Andalucía at 34.8%. El País has the story.

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Politics:

‘Deputies and regional leaders have long been after authorization from Ferraz (the headquarters of the PSOE are in the Madrid calle Ferraz) to attack Podemos. Now, with Pablo Iglesias accused by PSOE leader Pedro Sánchez of being unable to reach an agreement to oust Rajoy from the Moncloa (the presidential palace), Sanchez's team are already working on an election campaign in which they will focus their messages to attack and dismantle Podemos. There will be a free hand to take all the artillery against the party of Pablo Iglesias once it is confirmed that there will be no cross-leftist pact agreement...’. The story at EMG.

The ‘Panama Papers’ have thrown up another fish, according to El Diario: the leader of the forerunner of the Partido Popular, the Alianza Popular, Antonio Hernández Mancha. Meanwhile, other names are bubbling up, particularly from the same news-site. One – which has caused indignant outrage and a threat of a court-case, is the ex-wife of the executive-president of Prisa, which owns El País, Juan Luis Cebrián.

‘A new far-right, anti-immigrant party called ‘Respeto’ (“Respect”) has been launched in Spain with the support of German far-right party Pegida, whose staunchly anti-Islamic leader Tatjiana Festerling spoke at the new party’s founding Congress in the small city of El Vendrell, in Catalonia’s southern province of Tarragona. The Respeto party has been formed through the fusion of three, small ultra-right parties: ‘Plataforma per Catalunya’ (PxC), ‘España 2000’ (E2000) and ‘Partido por la Libertad’ (PxL), the latter linked to the far-right movement Manos Limpias, whose leader Miguel Bernad was jailed earlier this month on charges of extortion and criminal activity...’. Found at Progressive Spain.

Podemos is in discussion with the eccentric animal-protection party PACMA to join forces for the elections on June 26th. In the December elections, PACMA obtained 220,000 votes. Meanwhile, the PSOE is ‘pressurizing’ the IU to not join in with Podemos.

Susana Díaz, leader of the PSOE in Andalucía, avoids talking of her support for Pedro Sánchez as PSOE candidate for the General Elections.  ‘Right now, I’m not concerning myself with anything outside Andalucía’, she told Ideal on Wednesday.

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Corruption:

‘The head of a Spanish anti-corruption group that championed several high-profile cases over the past two decades, including one against Princess Cristina, now finds himself under investigation for extortion. A judge this week ordered the founder and leader of "Manos Limpias" (Clean Hands), retired Madrid city hall employee Miguel Bernad, 74, to be remanded in custody while a probe is conducted into a blackmail and extortion ring he allegedly ran. Bernad, who briefly headed the small far-right National Front party, allegedly acted in complicity with the head of Ausbanc, a banking consumers' association, who was also detained...’. The story is growing! More at Business Insider (and thanks to Nils). Indeed, wouldn’t it be terrible if Ausbanc was found to have been influencing judges in the Supreme Court and the General Council of Judicial Power (CGPJ)? Here and here.

From the Gürtel Case: ‘Ricardo Costa points to Genova (the headquarters in Madrid of the PP are in Calle Genova) in financing the PP and asks for Mariano Rajoy to testify in his trial. The former general secretary of the Valencian PP accused of financing three election campaigns with ‘black money’ has denied all responsibility and claims that the party accounts were both managed by and proceeded from the national party leadership. Along with the witness statement of Rajoy, Costa also asks for María Dolores de Cospedal and Luis Barcenas to testify at his trial...’. The story at Cadena Ser.

According to a letter held by the Guardia Civil, Manuel Chaves knew about the ERE fraud back in 2004. More at El Mundo.

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Courts:

The ‘Astapa’ case regarding real estate corruption in Estepona will take eleven years to come to court. Nine years after the start of the investigation, the court has still not received the reports from the Treasury on the patrimony on those accused. The judge in the ‘Astapa’ case has made the arguments of the prosecutor his own and has declared the complexity of the cause, which will need another 18 months to end the instruction stage. This realisation, after nine years of instruction, will now last longer than a decade...’. Typically Spanish reports here.

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Catalonia:

‘Spain’s separatist-driven north-eastern region has stepped up fines against restaurants and bars for not using the local language on things like menus and signs. The Catalan government revealed in a parliamentary inquiry recently by the conservative Popular Party (PP) that the amount of fines against businesses that did not use Catalan increased by 173 percent in the past year...’. Found at The Local.

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Brexit:

‘The British Expats: The Challenge of Brexit’ Lenox writes a letter to the British, over at Spanish Shilling: ‘It’s hard to know how many Britons live in Europe. We may be as many as 2.2 million, or as few as a mere 1.6m. Nobody seems to know, and frankly, neither figure seems important to those who ‘stayed home’. All those Britons living in Europe, forgotten except when it’s time to plan the summer hols. Otherwise, except for birthdays and Christmas, you don’t seem to like us much and, if you’ll forgive me from making the obvious point, neither do we have much time for you lot. Normally, we wouldn’t even be having this conversation, if it wasn’t for the Referendum, coming up in late June...’.

‘Survey: Could Brits in Europe put the brakes on Brexit?’, asks The Local. ‘How will Brits abroad vote in the "Brexit" referendum? The Local surveyed more than 2,700 people across Europe to find out. Britain’s upcoming referendum on whether to remain in the EU will have a huge effect on the 2 million Brits living in Europe - and many of these expats have a right to vote. But will they, and if so, how? The Local surveyed more than 2,700 people across Europe to find out what these expats were thinking...’.

From Sur in English: ‘Conservatives on the Costa del Sol divided over EU vote. There was heated debate at the open meeting organised by the Conservatives Abroad to discuss whether the UK should leave the EU Anyone who went to the recent Conservatives Abroad (CA) meeting on the EU referendum expecting to find answers, would have left disappointed. No one was going to be able to tell them how a possible separation of the UK from the EU would affect them as residents in Spain. In fact, the one thing no one could argue with was that the consequences of a Brexit are “as uncertain as the weather”, as one of the speakers Ann Fernández pointed out...’.

‘Ana Botín will campaign with David Cameron against ‘Brexit’. In one of her recent appearances before Santander shareholders a month ago, Botín remarked the British people had to decide but she firmly believed the permanence of the United Kingdom in Europe would be good for both their country and the EU as a whole...’. From Typically Spanish.

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Media:

‘The General Secretary of Podemos, Pablo Iglesias, has criticized the coverage made by some national Media groups about his party, with barbed and personal remarks towards certain journalists present in the room during the presentation of a book called “In Defense of populism”  by Carlos Fernández Liria, at the Complutense University of Madrid. This has generated a certain unease among some professionals who were covering the event...’. An alarming understatement from El Ventano. The Press are indeed insulted – What? We exaggerate the dangers of the Bolivarist candidate. Tush tush...

Carlos Elordi, writing at El Ventano, says that in Spain, there are almost as many people as sick of the manipulations of the Media as they are of the Politicians that they must lie about.

This brings us to Cafèambllet, who says that the Media are under the control of the banks.

Returning to El Ventano again, we read about the rise and fall of El País, now after 40 years, a shadow of its former self. ‘El País was, and still is, progressive in matters of culture, society and lifestyles, but in its business pages have always been in favour of the banks and big business. As for politics, its main component has been an increasingly lukewarm centre-left, now bordering towards the centre-right espoused by Ciudadanos...’.

El Diario writes of the pressure from the politicians (who decide the ‘institutional advertising’ and who lunch with Big Business, including the companies that own the newspapers). Recent departures from the Media, under pressure, include Luis Fernández (Telecinco), Joan Tapia (La Vanguardia), José Antonio Zarzalejos (ABC), José Antich (La Vanguardia), Pedro J. Ramírez (Diario 16 and El Mundo) and Julia Otero (Onda Cero), they say. Chapter and verse follow. A similar lament from Público here.

A weekly newspaper called El Caso used to thrill readers with stories of murder, thievery and betrayal from 1952 until 1997. For the past couple of years it has been producing a cyber version and, in 2016, a TV production – ‘El Caso: Crónica de sucesos’ - based on the newspaper, has proven popular. Now the last editor of the weekly, Joaquín Abad, is to commence publication of the newspaper once again, this time in magazine format.

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Various:

When we foreign settlers are not practicing ‘turismo residencial’ (as I have now for almost fifty years) we may be mere ‘gerontoinmigrantes’ – old folk moving to Spain for their final years. A book discussing the sociological ramifications of these elderly settlers is available, called  ‘La Residencia de los Gerontoinmigrantes’ – ‘The Rights and Obligations of Foreign Retirees in European Destinations’ (or, for the introduction, ‘click’ to read on the book showing on left-hand side of the website).

The President of the former Spanish colony of Equatorial Guinea is Teodoro Obiang (36 years and counting). In the recent election in his country, Obiang got 98% of the popular vote. No doubt he could bring a few tips on winning to our own politicians here in Spain...

The 30 highest paid executives in publicly-quoted companies in Spain took home between them over 252 million euros last year.

The company that bought the Ciudad Real airport last week, CR International Airport, apparently doesn’t have much capital, besides the 3,000 euros to form the Sociedad Limitada. The story at Economía Digital.

A Spanish company is the butt of many jokes in Southern Chile after building most of a bridge over the River Cau Cau back to front. The builders clearly hadn’t studied the plans properly and now must dismantle most of what has been constructed to take another shot at it. Currently, the unfortunate half-built bridge is receiving a large number of curious visitors (a bit like the Hotel Algarrobico in Carboneras). Story at Yo Me Tiro Del Monte.

Olive oil is – apparently – routinely mislabelled in Spain. Nothing too serious, merely using cheaper blends says El Diario. The Ministry of Agriculture is now investigating the phenomenon.

Now it seems, the vehicle-with-chauffer Uber has a competitor.  ‘Demonstrating just how difficult it will be for Uber to dominate the global market, another local competitor has scored a major funding round. Cabify, based in Spain, announced a $120 million investment Wednesday, with $92 million of it coming from Japanese web power Rakuten...’. Cabify will operate in Spain and parts of Latin America to begin with... Story at Geektime here.

It seems that taxis and ‘VTC’s –as Uber and Cabify are officially called – are going to have blue number-plates to confound those ‘piratas’ who try to take their business.

‘A Don Quixote film that began work in Spain 15 years ago will go back into production.

Terry Gilliam’s ‘The man who killed Don Quixote’ will be resurrected, again, in mid-September, with a budget of €16m. The last attempt to revive the film was cancelled by misfortune when leading actor John Hurt was diagnosed with pancreatic cancer...’. The story at The Olive Press.

A Canadian woman and her donkey called Chiqui are a regular sight on Spain’s minor roads, having walked many of them. Carol Lightbell was recently on the Ruta Jacobea in the north of Spain, and now the two partners are in the south, walking a new route called Santiago-Doñana. This article finds them in Bormujos (Seville). (Thanks to J-Antonio)

When travelling somewhere off the beaten track, it’s sometimes nice to bring along with you a few necessities for the locals. To this end, a Spanish initiative called Trip-Drop seems like a good idea. Read about it here.

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See Spain:

‘In addition to the 400th anniversary of the death of Miguel de Cervantes, we have other major cultural events in Spain this year. There is, for instance, the 100th anniversary of the birth of writer Camilo José Cela or the 400th anniversary of the death of Inca Garcilaso de la Vega. Other important anniversaries are the 500 years since the death of Dutch painter Hieronymus Bosch and King Ferdinand II of Aragon, or the 300 years since the birth of King Charles III of Spain. Also, San Sebastián, European Capital of Culture 2016 along with Wroc?aw in Poland, is playing host to more than 450 cultural activities. All these activities are to be supplemented by a wide variety of programmes organised by big names in the cultural sphere...’. Culture notes from Marca España.

‘Cities have personalities -- they're often described as we would people. They can be dry, manic, laid-back, iconic. Barcelona is what you might call a tonic. Always known as a vivid and creative city, Barcelona is taking the lead as an exemplary change agent on the European stage. Its DIY vigour and urgent form of citizen-level democracy are palpable, contagious, and best of all, effective...’. From Truthout.

‘My name is James Logue, I moved to Madrid nearly two years ago for a mixture of reasons including love and career prospects. It was an impulse decision that became a reality within 2 weeks but thankfully, it worked out well and I have not looked back ever since. Coming from a tiny city in the north of Ireland that seems to be permanently under a rain cloud, the Spanish climate is a welcome change. I love being spoiled for choice when it comes to art, music and food as opposed to my home city where there is one museum, a severe drought of gigs and the norm is to have potatoes with every meal...’. Article at Typical Non-Spanish – part of an interesting ‘Welcome to Spain’ page provided by an insurance company here

An interesting story from El País in English: ‘Madrid’s forgotten Metro lines. Deep under the capital are disused stations and abandoned tunnels dating back to the 1930s’.

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Demographics in Spain

by Andrew Brociner

We have been looking at the declining population is Spain, with its effects on the demand for housing, potential output and the old-age dependency ratio. This phenomenon is structural and long term and it is worthwhile making some comparisons with Japan, which has been in this scenario for many years and continues to head in the same direction.

Japan's population was 128 million in 2010. Last year, it was 127 million, a decline of about a million in just five years. Due to low fertility and low immigration, the population is expected to decline by even more over the next decades. By 2050, the population is expected to decrease to 108 million and then to 87 million by 2060.

Japan is an important example of a country which has faced economic difficulties for a long time and although it has tried, seems so far unable to resolve them. Problems of recessions and consistent deflation have mired the Japanese economy. That its demographic structure has been at the root of these issues is an important message to be taken by other advanced economies with similar structures.

To some extent, an ageing population amongst the developed nations poses a new set of challenges in general. Japan faces issues not only because of its ageing population, but also because of its low fertility and lack of immigration, which lead to a diminishing population. As far as Europe is concerned, whereas some countries have populations which are expected to increase, such as the UK and France, others are forecast to decrease, such as Spain, Portugal, Greece, Italy and Germany. Spain has one of the most worrying forecasts for the problem of old-age dependency. It not only has low fertility and a diminishing population, but the recent emigration has diminished the core working-age group. As the population ages, this group is expected to shrink from its current 60% of the population to 45% by 2050. And its proportion of the population of people aged 65 and over will be the highest in Europe by then and one of the highest in the world.

Addressing some of these demographic concerns, the Prime Minister of Japan is encouraging higher fertility. In South Korea, another country facing similar demographic issues, foreign immigration is being endorsed. The very low foreign immigration in Japan is another reason why its demographic situation is on this path. In Spain, sooner or later, the same types of policies might have to be implemented, that is, encouraging higher fertility and immigration. At the moment, we are a very long way from there: higher fertility needs some conditions, such as low unemployment as well as more subsidised daycare, and as for immigration, we have seen emigration with more people leaving Spain than entering in the last few years.

 

Other economic measures taken by Japan are devaluing its currency and encouraging spending rather than savings. Notwithstanding, the Japanese economy is caught in a demographic trap in which all of these measures have very limited effects. As Spain is part of the euro-zone, it cannot independently devalue, rather having to rely on internal devaluations such as lowering wages. Moreover, an ageing Spanish population will naturally save more and spend less as time goes on, lowering the demand for goods and lowering economic growth.

These demographic issues are fundamental and their consequences far-ranging, as the decreasing and ageing population lead to a lowering of potential output, lower spending and hence a lower demand for goods, including housing, a rising old-age dependency ratio with a smaller workforce unable to support a growing and ageing retired population, a reallocation of government spending towards these issues and away from other important areas, and an increasing and unsustainable debt. Myopic governments exacerbate these problems instead of addressing them, passing them on to their successors and postponing policies targeted at them. In the meantime, we go down this secular demographic path, with piecemeal approaches, leading to unsustainable scenarios.

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Letters

Now honestly, Lenox, how much did that Barcelona property sales organization "Fox something" pay you for making two notices out of their claimed percentual increase in sales?

An increase from 3 houses sold to 4 is an increase of 33%.....

Per.

Guilty! I said it was a commercial webpage though... (and ran it twice. Sorry about that – the Proof-reader has been shot).

Dear Lenox, Thanks very much for all your Newsletters. I follow Spanish news a lot but I am always impressed over the details that you pick up. HOWEVER: I also often conclude – after having read the B. over T.  – asking myself:  Where are the good news? I was born in Norway – where the corruption is no less than in Spain, it is just not so expensive. But I have for a life time lived in Spain and my intensions are to stay here for my next life too. Therefore I am searching in your reports for some good news also<a ></a>– as many good things happen in Spain every week. I have – along this line of bad news - noticed that you several times have given the AVE train system a hard beating. In your last edition, you do it on the front page. OK – the AVE is run with a loss – but many public transport systems all over the word doe the same.

I find the AVE trains being an amazing way of transporting thousands of people every day. The trains leave on time – they arrive on time.  The trains and the stations are spotlessly clean and the staff nicely dressed with an outstanding service.  AVE is very quick – and goes from center to center. The system has created – and still creates a lot of jobs, and by far - most of the money comes quickly back to the government in taxes on salaries and consumption. I wish you could see some positive sides of the AVE trains.  I definitely do – and I use it. Sincerely, Harald    

I really try and hold back some of the many corruption stories that are in the news. I also don’t report here ‘sucesos’ – daily news incidents. I think the point must be to inform readers of (as far as is possible) the reality of life in Spain (a country which, like Harald, I’m not ashamed to say that I love).

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