Business over Tapas Nº 443

 

Business over Tapas

A digest of this week's Spanish financial, political and social news aimed primarily at Foreign Property Owners:

Prepared by Lenox Napier.  Consultant: José Antonio Sierra

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April 28 2022            Nº 443

 

 

 

 

 

 

Editorial:

We were looking at the number of foreign residents and their overall value to Spain.

Since last week, fresh totals have appeared, sometimes higher than the ones we produced. As always, they are painstakingly exact, and no doubt, utterly wrong.

A site from the Ministry of Labour and Social Inclusion gives the number of foreigners in Spain as at January 1st, at 6,007,553. So we know how we stand. Although the number is easier to appreciate if it is rounded out to six million foreigners.

Some of them retired, some of them living from income from abroad, some of them working and some of them studying. Some of them here illegally. Some without documents. Some of them sending their money home to their families, as they should.

Spain has a population of 47,440,000 they say, so foreigners make up 12.6% of the whole – that’s one in every eight people.

The Brits are counted in the above guaranteed government figures at 407,628 (as opposed to last week’s padrón figures found elsewhere at 282,124). The Schengen Visa Info – quoting something called Statista, gives us a completely different Brit total in Spain of 313,975.

The ABC meanwhile claims 290,372 Brits resident in Spain (the comments from this right-wing paper about Spain’s foreign population are, as always, a pleasure to read).

Then there’s the INE – the official bean-counter site – which doesn’t have a clue. The best we can find from them is July 2021 ‘non-EU Europeans’, which come to… 603,162 (you see: the Brits, post Brexit, aren’t worth a place of their own any more).

There are other official government sites available, but the browser found a ‘potential security threat and did not continue to www.mites.gob.es’. So, we shall remain blissfully ignorant of the information to be found on that no doubt highly useful page.

Then we have The Mirror headline from October last year which reads: ‘British expats are said to be leaving Spain "in droves"’; while, conversely: Idealista says the opposite: ‘The Brits bought 7,560 homes in the second half of 2021 – the largest group of foreign buyers’. In all, nearly 64,000 homes were bought by foreigners between July and December last year. And that’s good money brought here almost exclusively from outside Spain.  

With all the confusion, the authorities will understandably react according to the figures to hand (once they’ve successfully looked up the phrase ‘in droves’ in the dictionary), without worrying if they are correct; or maybe just go out for a coffee instead.

My estimate last week of the half a million wealthiest foreign residents, worth to Spain some 10,000 million euros each year (plus their 250,000€ homes and 20,000€ cars and so on), brings us back to the question: why chase after just the tourists while ignoring the foreigners who live here, or who potentially could?

The only time the subject of the foreigners come up – beyond of course at Vox rallies – is when it’s time to tax us.

But you won’t find any official agency or policy that promotes foreign home-buyers investing in Spain!

The tourists are counted in a similar exact but hopelessly wrong way as the foreigners. Someone is paid to provide the numbers (a bit like the new school they’re building near us budgeted at €724,027.27 – now fellers, hold on just a minute, does that include the chalk?). Perhaps, by not rounding them off, they show how hard they work at these sums.

Tourists, then, are described as anyone foreign who comes to Spain (even if they are taking an onwards flight to somewhere else and never even leave the airport), plus all the people on all the cruise ships – regardless of if they disembark for a two-hour stroll around Málaga harbour or not – plus all the people who hop over to Spain every weekend (add ’em all together José), plus those registered in a hotel, but not the ones who drove across the frontier or who slept in the spare room last night or on the sofa.

Then we have those non-EU citizens who own homes here are but aren’t allowed to stay for more than 90 in any 180 days. What are they exactly – residents, home-owners, tourists? No one knows or seems to care – except of course for the affronted local businesses.  

A few years ago, I went with a couple of senior local Brit spokesmen (if you see what I mean) to see the delegación provincial – the government representative for Almería and his team – to make the point that, with so many small and disappearing villages, a possible answer might be to turn one or more into an old-folks’ retirement centre for rich wealthy well-heeled foreigners. Do you see the idea? Bring along a few English-speaking nurses – after all, there are plenty of disillusioned Spanish professionals returning from London thanks to the Brexit fallout – to bring movement and life back to some moribund pueblo that has no earthly source of income. You could even sell the homes as lifetime leases.

Anyway, they said they’d get back to us.   

 

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Housing:

Demand is outstripping supply says The Olive Press, with a lower number of homes listed on the market, average prices rose in the final quarter of 2021 by over six per cent.

The 90 in 180 day rule for non-EU citizens without residency in Spain evidently is hard for both those concerned and for the local businesses who lose out on the trade from this large collective. Many of them are Brits, who suddenly – thanks to Brexit (a shot in the foot if ever there was one) can no longer enjoy the use of their holiday homes full-time as they used to. From Menorca here, we read of a ‘Campaign of British residents to be able to spend six months in Menorca at a time. The limitation of 90 days every half year to enjoy their second residences in Menorca, since Brexit became effective, is at the centre of the conversations of many British citizens’. But then, foreigners and their problems have never been of much concern to Spain’s politicians… There’s a Facebook page run by Andrew Hesselden called 180 Days in Spain which is very active here.

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Tourism:

Travel from the UK – the entry requirements for Spain for British passport holders. Here’s a useful brief from the GovUK.

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Finance:

‘The Social Security estimates that April will close with 36,000 more members and has already exceeded 20 million contributors so far this month, with a total of 20,057,588 members as of Thursday, 21 April…’ Item from The Corner here. The Social Security claimed 2,225,856 foreigners within the system by September last year including 37,272 Brits, 108,241 Italians and 26,674 Germans (See Excel archives here).

‘Spain breaks all forecasts: it is the European country that has most raised its income’ says El Confidencial here. ‘When the Government prepared the 2022 budgets, just half a year ago, it anticipated that public revenues would reach 41.3% of GDP in 2021 and the deficit would end the year at 8.4% of GDP. However, collections skyrocketed in the final stretch of the year thanks to both job growth and inflation. This unexpected collection raised public revenue to 43.7% of GDP, two and a half points above the Government forecast…’

Spain and Portugal have arrived at an agreement with the European Commission to limit electricity prices. From now, gas will have a limit of 40 rising during the year to50€Mw/h on the monthly bills for the next twelve months, bringing them down in price. The gas currently used to calculate the monthly energy bill is standing at present at 90€Mw/h.

Sur in English explains here what we know so far…  

From Spanish Property Insight here: ‘If I have a Spanish residence permit, am I automatically a tax resident in Spain?’

From El Salto Diario here: ‘The Government hands the Sareb (‘the bad bank’ - Wiki) over to two investment funds, Blackstone and Hipoges (KKR), both with a long history of real estate speculation and harassment. The two funds (unkindly known in Spain as Fondos Buitres – vulture funds) take over the management of the Sareb's assets, bypassing the pending Housing Law, which precisely prohibits the sale of publicly owned housing…’ The Sareb owns – at least – 55,000 homes plus a large number of builders’ credits.

The unions are not happy to meet with the proposal of ‘longer working days, up to 12 hours a day, at the company's discretion. This is what the Asociación de Empresas de Consultoría propose to include in the collective agreement that it is negotiating with the unions. The AEC include multinationals such as EY, Deloitte, KPMG or Accenture and technology giants such as IBM and NTT Data…’ The story is at elDiario.es here.

Madrid is now the fourth most important financial hub in Europe, standing only behind London, Paris and Frankfurt says LibreMercado here. 

In a gloomy report, we read that the Balearics are being sold, lock, stock and barrel, to foreign investors says La Vanguardia here.

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Politics:

Our weekly poll comes from LaSexta here. The PSOE returns to first place, with 27.6%, followed with the PP at 24.3%, Vox at 20.3% and UP at 11.%. Ciudadanos scores just 1.3%. 

The Andalusian regional elections will be held on Sunday June 19th says El Huff Post here. The most-voted party will almost certainly be the PP, but it will likely need to ally with Vox to govern. Says the PP spokesperson Elías Bendodo (A fellow to watch): 'if we have to pact with Vox, then so be it - they are just as democratic as anyone else'. The PP’s current partner in Andalucía is Ciudadanos, with their leader Juan Marín doing a good job at secretary for tourism. The PSOE-A is led by Juan Espadas (was mayor of Seville). Meanwhile, the coalition of left-wing parties, made up from Izquierda Unida, Podemos, Más País, Equo and a couple of others, will be allied in this election campaigning under the name ‘Por Andalucía’ as they continue to search for a candidate for this new confederacy. Four Ciudadanos deputies have quit the party since the elections were announced this past weekend.

20Minutos looks at the campaign strategy for the Andalusian PP’s president and candidate Juanma Moreno here.

Marine Le Pen evidently found much support from the unemployed and the agricultural sectors (both groups traditionally dislike or fear foreigners). At article at El Huff Post looks at how Vox is following Le Pen’s electioneering tactics with what looks like similar results.

Whether Podemos is a good idea or not – the certainty is that the Spanish Establishment went after it with a vengeance. There’s no proven corruption in the party, but it is a trifle unforgiving. Here at El Salto Diario, they look at the latest attempt to discredit the party. ‘…the judicial operation to harass and demolish Podemos, which began at the end of 2014, has had dozens of cases or lines of investigation that have fallen on deaf ears. These are 25 archived cases or investigations, including the ones that got the most media attention. Others are on the verge of being dropped by the courts, such as "el Caso Dina"’. The presentation of Pablo Iglesias’ book Verdades a la Cara in Madrid last week gave the author the chance to look at some of his unhappier experiences in politics, as he recalled Pedro Sánchez telling him years ago, ‘they are going to be coming after you’.  

‘The PNV spokesman in the Congress of Deputies Aitor Esteban on the Pegasus phone-spy system: "No one is certain that they will not be spied on by the intelligence services". Esteban says that he is "deeply concerned" by all the information about Pegasus and has shown his support for the president of the Generalitat, Pere Aragonès’. Contrainformación looks at the scandal here.

The Government has offered the two leading Catalonian parties – ERC and Junts – together with the Basque Bildu - to enter the Parliamentary Official Secrets Commission so that from there they can receive first-hand explanations about the hacking of their phones with the Pegasus Israeli software. It is the Government's way of trying to calm the waters, which are in turmoil to the point of endangering the necessary parliamentary support from several minor groups. It appears unlikely that the phones were tapped through specific judicial order, leaving the CNI national spy agency currently looking awkward…

Some 65 people have been spied on by the secret service apparently: not only politicians but also academics, family members and even lawyers. ‘Spain vows to be transparent in probe of Pegasus spyware use’, says The San Diego Union-Trib here. Unsurprisingly, the CNI are peeved by the Government allowing the independent groups into the official secrets commission says El Mundo (paywall) here. On Wednesday, the spokesperson for the ERC Gabriel Rufían speaking to President Sánchez in Parliament stated "The question is if you ordered it, and if you ordered it, then this is terribly serious and if not, it is even more terribly serious, because it means that you have not cleaned out your party sewers". The ECD reports that the Government is now prepared to fire the head of the Spanish secret service Paz Esteban to settle the troubled waters.  

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Catalonia:

According to El Independiente, the judge who authorises the secret listening-in on certain phones belonging to Catalonian politicians by the Spanish secret service is close to the ex-vice president (2018 – 2021) Carmen Calvo. From El Periodico, we read that ‘The Washington Post describes 'Catalangate' (sic) as a "flagrant" violation of civil liberties: "It must be condemned" In the editorial the paper says that this software should be used "with responsibility" by governments. The Washington Post editorial here is titled ‘Democracies shouldn’t surrender to a future of limitless surveillance’. On Wednesday, the Catalonian parliament voted overwhelmingly to take the issue of the Pegasus program espionage to court. Only Vox, PP and C’s voted against.   

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Gibraltar:

From City AM here: ‘Brexit checks: Disbelief and confusion at Gibraltar border as Spain blocks British nationals from entering’. The item notes that ‘Gibraltar, a British overseas territory, has been caught between the EU and UK since Britain formally left the EU. Access to Gibraltar was excluded in the trade deal that the UK and EU agreed in 2020. Therefore, there are no set or agreed arrangements for Gibraltar post-Brexit’.

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Europe:

From Pedro Sánchez Facebook page (April 21) we read ‘Today we have travelled to Kyiv to transfer Spain's support, solidarity and commitment to The Ukraine. It is shocking to see the horror and atrocities of Putin's aggression on the streets of cities like Borodyanka. It is moving to see the strength of President Zelenskyy and, with him, that of the entire Ukrainian people. You are not alone. Europe is with you, the world is with you. We will not abandon you’. While he was in Kyiv, Sánchez promised to send to The Ukraine 200 tons of arms.  

From Spain in English here: ‘Of approximately 135,000 refugees who have arrived in Spain since the start of the Russian invasion of Ukraine, 74,965 have already been granted temporary protection, including residence and work permits…’  (!)

Spain has supported the World Tourism Organisation’s decision to eject Russia temporarily in a meeting held in Madrid on Wednesday for not upholding the values held by the WTO of peaceful travel abroad.   

Some 16,000 Brits took European nationality in 2020 (obviously no longer counted as foreign residents) says Schengen Visa Info here. The article doesn’t show how many got Spanish nationality, although it is generally known to be a difficult and a drawn-out process.

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Ecology:

‘The final destination of more than half of the domestic waste collected in the country continues to be the landfill. Moreover, 13% of the trash arrives without going through any sorting plant or undergoing any prior treatment. This means that it has travelled directly from the garbage truck to the landfill. This practice is not only a "total anomaly in Europe", according to Josep Maria Tost, former director of the Waste Agency of Catalonia, it’s also illegal, according to European waste-disposal directives…’. Item from elDiario.es here.

‘Heavy rains in Murcia leaves the Mar Menor on the verge of a new collapse’, says EPE here. ‘Local councils, the regional government and platforms in defence of the lagoon agree that the entry of fresh water and nutrients makes them fear the worst’. Another issue is the Balsa Jenny, a local mining operation in the past left a contaminated lake behind which bleeds into the Mar Menor. The ownership of the water is now in public hands, but no clean-up (after 20 years) has been forthcoming.  

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Various:

On the subject of demographics: ‘Romanians and Chinese are leaving Spain, but more Colombians and Italians are arriving’ says the ABC here. Among other figures, exquisitely counted to the last person, the newspaper claims 110,977 Ukrainian residents in Spain (with another 134,000 Ukrainian refugees being offered shelter says the RTVE here).

There was once an American plan to invade and annex the Canary Islands, says the ABC here. The plan was hatched by Theodore Roosevelt in the last years of the XIX Century. The plan was finally put into the trunk in the White House attic.

From El País (paywall removed) here: ‘The president of Algeria blames Pedro Sánchez for the diplomatic rupture with Spain. Abdelmayid Tebún says in an interview with the Algerian media that his country will never fail to fulfil his responsibilities to provide gas to Spain’. In short, gas supplies will continue from Algeria, although Tebún wasn’t clear over what future prices might be for the product. Tebún insisted that he was angry with Sánchez (over the Western Sahara), but not with ‘his Spanish friends’.  

Geologists and geophysicists claim that the huge deposits of oil found by the Moroccans near the Canary Islands is a hoax – merely a ploy to please their investors says Público here.

ABC has a report on the dying pueblos of Spain (as people move away in search of a better life). It says that almost 40% of all municipalities in Spain have lost more than a fifth of their population since the year 2000. The article also goes by province – showing that 96% of the municipalities in Zamora have lost population in the last 20 years. The Balearics, at the other end of the scale, report just 3% of parishes suffering shrinkage.

For one reason or another, says Cinco Días here, people are buying more 15-yr-old cars (or older) than they are brand new ones. 

From The Local here: ‘Why is everything in Spain closed on Sundays?’ It says in part, ‘…many countries across Europe, like Portugal, Italy, and the U.K, have more liberal trading hours legislation. In fact, the European Commission ranked Spain as the country with the second highest number of restrictions on commercial trade in the EU…’ It’s evidently down to petty laws, which appear to little more than dampen commerce. How is it, we wonder respectfully, that the Chinese bazaars are always open, even on Christmas Day?

Just to remind readers – FACUA is a useful consumers’ organisation that is worth knowing. Here they are in English.

A report that beer and wine are to be removed from the Menú del Día is a bulo says the Ministry of Health as reported at Infosalus here.  

Business Insider brings us 37 Spanish inventions (from the humble mop to the can-opener, the stapler and, our favourite, table football – el futbolín).

For reasons of both state and politics, the King of Spain Felipe VI has released figures regarding his personal wealth: including the paintings and jewellery, he’s got 2,573,392.80€ He doesn’t own any property – understandably – and he pays his taxes says elDiario.es here. Indeed, the Government and the Royal Palace have now come to an agreement to audit and control the Monarchy says El Huff Post here.  

Think Spain looks at the (Costa Blanca) expat-volunteers, who open charity shops, join associations to help care for people or animals, or give their time to worthy causes.

Those residents with US passports, by the way, come to 30,946 according to an official list found here.

‘The padrón grows once again in Spain in 2022, but not at pre-pandemic levels. Spain adds 50,000 people in its 2022 census and is the second largest in the historical series’.

Nutela, the delicious nut-spread (or is it chocolate?), has chosen fifteen of Spain’s most ‘extraordinary places’ to feature on its jars. Such is life. One of them, says Sur in English proudly – is in Andalucía: Mijas here takes the cake. The others, as chosen by the Italian confection, are El Teide (Tenerife), Cala Macarelleta (Balearics), Montserrat (Barcelona), El Templo de Debod (Madrid), Haro (La Rioja), Consuegra (Toledo), Picos de Europa (Asturias, Cantabria, Castilla y León), Playa de las Catedrales (Lugo), Selva de Irati (Navarra), Cieza (Murcia), Hondarribia (Guipúzcoa), La Albufera (Valencia), La rambla de Barrachina (Teruel) and Meandro de Melero (Cáceres).

Público, on the other hand, brings us ten examples in images of the various ills connected with greed or stupidity in ‘Ugly Spain’ here.

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See Spain:

A peculiar and beautiful village ‘without even a bakery’ has made the pages of The New York Times, says El Huff Post here, not for its beauty or its tiny population of not much more than a 100 souls, but because of its libraries. Urueña (Valladolid) has eleven of them!

An interesting town in Asturias called Cangas de Onís is worth a visit. It’s both pretty and, being the first capital of Spain (thanks to Don Pelayo the Visigoth - Wiki), highly historic.   

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Letters:

Morning Lenox,

The question you ask in your editorial this week is one I've asked myself for many years. I think it's partly due to the fact that foreign residents are not organised in any way and have no lobby. Nobody hears their voice, and the government just takes them for granted. The Modelo 720 shows how happy the Spanish government is to make life difficult for foreign residents.

Best regards,

Mark Stücklin

 

What you stated about the foreign residents is very true! So I thought I’d give you some feedback. We are retired Americans in Benalmádena—not wealthy, but have enough pension and savings to leave the US which is a mess.

We definitely feel ‘under-appreciated’ by the government. We love Spain, but have considered moving to Portugal, Italy or France for several reasons. We don’t even mind the famous Spanish bureaucracy—it is other issues.

1. Taxes are through the roof on our pensions, while we owe very little in tax to the USA. Portugal, France & Italy all have better tax schemes for retirees. In addition, it is extremely frustrating that Spain is issuing a Digital Nomad visa & giving these young salaried employees a tax break by allowing them to pay non-resident tax, which is much lower than resident taxation. Apparently, the government feels the Digital Nomads will spend more money on restaurants & bars! Retirees also spend a lot on going out—we rarely eat in, and try to always buy local products & use local businesses to inject money into the local economy. The government logic makes no sense & I’ll bet retirees spend more than younger digital nomads.

2. Driver’s licenses are a big problem here. When you’ve had a driver’s license for 50 years, it is a major pain & expense to be forced to take tests and pay for required lessons to drive. Have heard the exams in Málaga are backed up for 6 months! It has affected our whole life here. We had intended to buy a car, but now walk or use the bus. This is fine, but it totally affects where we can live as we must be near a bus route & grocery store, so are very limited in choice of areas. But the hassle of getting a driver’s license is a really big obstruction. The other countries I’ve mentioned have a driver’s license exchange program which makes a huge difference in quality of life.

3. Holiday rentals are out of control. Living by the coast is a goal & dream for many who come here. We are on our second coastal rental, but now realize it is all pretty much the same. Both buildings we’ve lived in are full of holiday rentals, with the associated noise & inconsideration of holiday makers. When the buildings aren’t full of vacationers, the apartments are being renovated to accommodate more guests and higher fees. It’s like living in a continuous construction site. We would move up the hill and away from the tourists, but then there is the problem of not having a car! The holiday rentals that many Northern Europeans are buying here are hugely driving up the cost of living on the coast. We’ve only been here a year, but the rents have gone way up in a place that only a year ago had a number of affordable rentals (we do not want to own).

I do keep up with the expat forum groups & of course, the Brits look at things different than Americans, but many Americans are deciding on Portugal or France over Spain due to the high taxation in Spain. For the wealthier retiring American baby boomers (which we aren’t), taxation is a huge part of their choice. They hate the wealth tax & a 35% - 45% tax bracket on income just does not work for them, as Americans are used to lower taxes in general. If you read the expat forums, this is a recurring theme (along with the driver’s license issue). But even for those of us in the lower income brackets—taxes are a big problem. We moved here from Florida, which is expensive, but in the end, being retired in Spain is not much cheaper, all things considered, though we prefer Spaniards and the Spanish lifestyle over Floridians! At least the currency exchange is much better than when we arrived, which helps.

We really enjoy your newsletters as they are very informative and concise regarding business & government news. We’ve been thinking of moving from Benalmádena into Málaga city as there is a lot more to do & you don’t need a car. We just renewed our non-lucrative visa for 2 years. Have not seen our tax bill yet, but if it is as high as I am expecting, we may not actually be able to afford to stay in Spain in the future, as it will end up depleting our savings.

Keep up the good work!

Suzanne

 

Public policy in Spain is drafted with a mixture of the four Is: Ideology, Ignorance, Indifference, and Indolence.

(Name withheld).

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Finally:

The Revolution of the Carnations, the non-violent fall of fascism in Portugal on April 25th 1974, is remembered with this song: Grândola Vila Morena from Jose (Zeca) Afonso (Wiki) on YouTube. Bloody thing, I can’t stop humming it.