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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September 21 2022 Nº 463
The issue of the high cost of energy across Europe – and fear for the oncoming winter – has now been addressed by the European Commission. We read in The Guardian that ‘The EU executive plans to raise about €140,000 million by imposing windfall taxes on the energy companies’ “abnormally high profits” and to redirect proceeds to households and businesses struggling with soaring bills…’
From the editorial of Pedro J Ramírez for El Español (subscribers only): ‘That the Government, the PP and the European Commission all support the same tax for energy companies will be seen as an element of stability in the eyes of public opinion and the business sector…’. In reality, the PP was strongly against the Government’s plan to tax the energy companies and the banking sector for their windfall profits, but then the EC came on board… As elDiario.es says, ‘in the face of all this urgent regulatory wave that brings different political currents in Europe into agreement, Feijóo is being forced to rectify his proposals. He is no longer against a tax on electricity companies, only against the one proposed by Sánchez. The one in Brussels seems fine to him. It is, of course, basically the same thing’. El Huff Post noted (Friday) ‘…In the last few hours, the PP has had to do a real exercise in argumentative contortionism by going from rejecting and voting against the tax on energy companies, to accepting it as long as the proposal presented by Brussels is complied with…’. In truth, there is some difference between the PSOE’s plan and the decision from the European Commission – as the one wanted a straight 1.2% tax on sales, while the EC has decided on a 33% tax on any rise of over 20% in profits from the last three years to start in December.
‘Unlike the UK’, says the acerbic Richard North, ‘where The Replacement (his name for Liz Truss) is revelling in the freedom to do her own thing, the Commission’s first response in tackling high prices is to propose measures to reduce demand…’
The Guardian again: ‘As the final details were being thrashed out, analysts at the US bank Goldman Sachs forecast that the price of gas was likely to more than halve this winter as efforts by EU countries to avoid big shortages this winter prove effective…’
That’s the power companies. Returning to Spain, the banks can expect (with the approval of the Banco de España) a 4.8% tax on their profits.
Why rent apartments when the foreigners are out there looking to buy them? The question comes from Menorca property owners. On the other side, of course, are the poorer menorquines who can’t afford to rent one of the dwindling number of available apartments, and who are reduced to living in a caravan or a tent. elDiario.es looks at the issue here.
From SVI here: ‘Eight million passengers that were travelling from and to Europe during May of 2022 are eligible to ask for a reimbursement of up to €600 of their financial means as compensation for the hassles experienced travelling during this period when Europe’s airports and flag carriers were found in chaos…’
From El País (Tuesday) here: ‘The Bank of Spain yesterday published the latest debt data for all public administrations. In July it stood at 1,487 billion euros, the highest figure in the historical series with an increase of 6.8% compared to pre-pandemic levels, at the end of 2019, where it had reached 1,223 billion euros…’ (That’s 1,486,978,000,000 euros, or 1.487 trillion in British and American usage with ‘short scale math’).
El Economista says: ‘The increase in tax collection, due in large part to high inflation, will not only allow the Government’s anti-crisis plan (valued at 30,000 million by President Sánchez) to be fully covered. In addition, once the resources that this initiative will absorb have been discounted, a surplus of 15,000 million destined for the public coffers will still be available…’ (Thanks Jake)
From El País here: ‘The better than expected tax collection that Hacienda has been experiencing is helping in the reduction of Spain’s public deficit. Thus, in the first half of the year, the public deficit as a whole has been reduced by 45.4%…’
From The Corner here: ‘The credit rating agency Moody’s has indicated that Spanish companies are the most profitable among the main European countries (United Kingdom, France, Italy and Germany) due to their greater ability to raise prices, according to a report published last week. “Although the sample is small, on average these [Spanish] companies have higher profitability at all percentiles, which suggests a greater ability to pass on costs to consumers and offset inflationary pressures through higher prices,” the firm said…’
From Sur in English here: ‘Wealth tax in Andalucía was scrapped from Wednesday. The president of the Junta, Juanma Moreno, said the abolition will attract investment to the region, and he also announced a reduction in the rate of income tax and the cancellation of the water tax in 2023’. Alistair Spence Clarke gleefully says here ‘It is sadly uncommon for Governments to deliver on their promises, Andalucía’s Regional Government seems to be the exception. One of the central policies of the centre right Partido Popular is the traditional conservative view that taxes should be as low as possible and that citizens should be trusted to spend their own money as they do so more sensibly than Government…’. elDiario.es here explains why this is great news for the wealthiest (estimated at around 20,000 in the region), but not so much for anyone else. Público says ‘Tax rebates for high incomes in PP-controlled communities take 10,000 million euros away from the collection for public services. The current tax benefits with those announced in Andalucía, Madrid and Castilla y León between them add up to 9,700 million euros, along with another 900 from Galicia and Murcia’. EPE reports that the Minister for Inclusion and Social Security José Luis Escrivá says that – in his opinion – all taxes should be decided and levied by the central government rather than the regions each going off in different directions. Finally, we note Cadena Ser as they examine ‘The (fiscal) paradise in two of the communities in Spain with the lowest spending on health and education’.
Seville is to host a summit in November with representatives from 163 countries, along with experts from the UN, the EU and the World Bank to consider ways of fighting against tax evasion and offshore financial centres. Apparently, it’s an annual thing. ECD reports here.
From 20Minutos here: ‘The CIS of Tezanos (Spain’s leading poll is often known by its director, José Félix Tezanos) – (wiki) – lowers the PP of Feijóo by almost two points and once again places the PSOE ahead in voting intention’. The poll gives the PSOE 29.2% against the PP at 28.5%. Vox drops to 4th place behind UP. Certainly, a second poll – from elDiario.es – reads differently, with the PP leading 29.4% against PSOE at 25.8%. A third poll, over at 20Minutos here, has the PP ahead on 31% versus the PSOE at 26.7%. There’s still a long way to go before local and regional elections (May 2023) and a General Election (probably December 2023).
‘From the European funding to the electricity market: the EU has been backing Spain while the PP campaigned against. Since the pandemic began, the EU has been turning towards positions defended by the southern countries while abandoning postures more typical of ‘hawks’: where the Popular Party has always preferred to position itself’ says elDiario.es. An opinion piece at Nueva Tribuna says ‘One of the most relevant differences in the management of the current crisis with respect to the previous financial crisis lies in the evident leadership now exercised by the Spanish Government regarding the important decisions that are adopted within the European Union. Spain has gone from being a passive country, which was limited to applying the decisions of others, to being an active country, which decisively influences the initiatives of the European institutions to face common challenges…’
From ECD, we read that ‘Sánchez promises the barons of the PSOE that he will not pardon Griñán before next year’s local and regional elections. García-Page, Fernández Vara and Ximo Puig have warned him that granting it earlier would have “devastating effects” in the next elections’ (Local and most regional elections: May 28 2023). They have a point!
From El Triangle here: The Generalitat de Catalunya will create a (small) public energy company on October 4. The first thing they propose is to cover the 1,500 buildings that the administration owns with solar panels. It will also invest in renewable projects, together with the municipalities. This public energy company will provide electricity to the administration and local energy communities, but not to individuals. In the first place, they set as an objective that the Generalitat can be self-sufficient; and that in 2030 all rooftops be covered with solar panels…’. The Catalonian government currently uses around 2% of the regional energy consumption.
What do Europeans think about the state of the EU? The answers by people from various EU countries attends the question at EuroNews here.
‘When mourning ends, reality will hit hard’: European journalists on Britain’s mood
UK-based correspondents assess how Britons will deal with political turmoil, Brexit, recession and the loss of the Queen’. Item from The Guardian here.
Between one thing and another, there’s no doubt but that public health centres could use a boost. 20Minutos says that next week, the Government will transfer 172 million euros to the autonomies for Primary Care.
The man behind Nero Vodka (you may have seen the adverts) is arrested by police on the Costa del Sol, with 200ks of cocaine and half a million euros in cash. The Olive Press has the story here. And a second (explosive) story here. Europol also features the story (with less detail): ‘One of Europe’s biggest money launderers arrested in Spain’.
20Minutos continues as the most read news-source in Spain with a daily average in August of 2,250,000 visitors. Behind it comes El País with 1,625,000.
Antena3 decided, while reporting on the CIS election poll (see Politics above), to change both the name and the colour of purple Unidas Podemos, UP, to dark-green UXPA. For some reason. They still come third (in front of light-green Vox). Or maybe fourth.
Remembering the volcanic eruption on the island of La Palma (wiki) which began in September and ran until December last year, the Diario de Canarias writes of the plant-life that is beginning to sprout around the fissures. Good to see…
On the Sunday, Felipe VI managed to avoid any photographer catching him close to his father Juan Carlos I while in London for the funeral for Queen Elizabeth. ‘It’s not like I killed anybody’, says the Emeritus forlornly, having been sent to Coventry by his son and his queen … Later: no wait, here he is with Doña Sofía seated (due to reasons of protocol) next to the Spanish Royals during the funeral service on Monday. Another picture here.
Not all Royals appear to dedicate themselves exclusively to their role as Parent of the Nation. Spain is acutely embarrassed by Juan Carlos I and, over in Morocco, according to El Independiente, things aren’t going well with Mohamed VI either. The Moroccan king appears to divide his time living as a sybarite between Paris and Gabon (he has a palace there) while ignoring his duties at home says the powerful article.
From 20Minutos here: an interview with the retired General Rafael Dávila on the situation in the Ukraine, with the title: ‘Make no mistake – this is a war between the USA and Russia’.
Portugal has put up a hut on a small island with disputed ownership between Spain and Portugal – turning the isle in question, actually a number of rocky islets called Las Islas Salvajes – into an international issue: uninhabited isles are one thing, but inhabited ones are another. The Savage Islands (wiki) are a tiny nature reserve under Portuguese ownership. They are half-way between Madeira (at 280kms) and the Canary Islands (nearest point at 165kms). It’s a squabble about the surrounding waters, of course – are they within Spanish or Portuguese areas of control? La Información reports here.
La Vanguardia brings us a review of the book Historia del turismo en España, 1928-1962 by Rafael Vallejo Pousada. The article looks at how tourism brought much-needed foreign currency which was key to the economy of the Franco Regime, which in turn relaxed ‘its iron fist’ to allow foreigners, with their foreign ways, to enjoy Spain. (Gosh, it was fun).
Franco had prepared his successor admiral Luis Carrero Blanco to take the helm as president once the Caudillo had died, but ETA famously changed the story-line (bringing democracy and King Juan Carlos I) when they blew up Carrero Blanco in his car during the Operación Ogro in late December 1973 (Wiki). An article at El Otro País suggests that Henry Kissinger and the CIA were also instrumental in the magnicide, as the USA wanted Spain to join NATO, which counted with the firm opposition of the admiral.
The Local here: ‘11 things to consider when choosing a school for your child in Spain’.
From BBC Travel here, ‘Deep in Spain’s north-western corner, the windswept Ancares mountains are dotted with centuries-old houses that look straight out of a fairy tale – or the Asterix and Obelix comic-book series – but that are cleverly suited to the harsh realities of this remote region…’ (Thanks to Michael)
Eye on Spain brings us (the ten oldest) ‘Historical Restaurants in Spain’ here.
‘Despite having controlled the Iberian Peninsula for centuries, the Visigoths lack a great architectural legacy. The abandoned cities of Recópolis in Guadalajara, Victoriacum (wiki) or the old town of Olite in Navarra are the main settlements they created. However, the passage of Muslims and the updating of their temples in the Middle Ages joined the passage of time to erase their constructions from the map. In the south of Spain, only one Visigothic basilica remains standing: Santa Lucía del Trampal, in the Extremaduran town of Alcuéscar…’ España Fascinante takes us to see the basilica here.
Spain: a blurry four minute video from 1920 on YouTube here.
Over at our stables in Almería (Albero Centro Ecuestre), Carmelo Sáenz de Mendoza is giving a two-day course on doma natural on October 8 and 9. Details here.
Some problems with the gmail once again (they like to send the BoT to ‘Spam’ or, worse, put up a Red Warning!). I posted a message Thursday morning to the gmail-users amongst us. Several have now switched.
It often happens with another Spain news feed I have . . .
One BoT subscriber wrote to switch his gmail for an email, and I found it in the ‘Spam’.
Gmail has also taken to ‘clipping’ a message. It seems to me that one either wants to read the mail, or one doesn’t; but reading half of it is a bit silly.
Radio Tarifa (Wiki) was an interesting band, which cast its eye back to the origins of flamenco, Moorish music and other early rhythms to create an odd and eclectic mix. Here on YouTube with La Tarara.