Economic situation in Spain

Spain has been relying on tourism only for so many years. With so many unemployed people now leaving Spain to their home countries makes me wonder what will happen to Spain? Will they follow Greece and Ireland? We all are still hoping for a miracle to happen.......

Yes, things are not improving and I can't see how Spain won't need to ask for some sort of financial assistance.

It's all looking very bleak at the moment.

Good article here on this.

Justin

Waking up and responding to many uncomfortable truths relating to the real estate, legal and banking sectors would be a starting point if Spain wishes to encourage people to invest. There are far too many needing reassurances and PROOF that justice prevails in Spain, that manipulative practices by regional and local governments that use the public as pawns in their power struggles will be eliminated, that Banks and developers will be made accountable if they breach or provide abusive contracts, or fail to recognise their obligations according to law, that the justice administration system will no longer ignore the effects relating to major delays within their failing system, that accountability by all professionals (including lawyers) falls high on Spain's agenda, that decent consumer laws are brought into practice to prohibit at source the abuses that exist right now, etc etc. And these are just a few of the vulnerabilities that have emerged as we wait and wait and wait for a resolution…….

Only then will we feel reassured.

The article you referred to, Justin, mentions “where there are problems – so also are there opportunities. “. Well let’s witness more proactive efforts to achieve a resolution to the problems identified, rather than skirting around the problems in the hope that they will go away. Spain can do much from within to improve its own lot, but until we see justice prevailing then it will remain an own goal scenario as investors turn their backs on Spain.

Now surely is the time to get their own house in order.

Excellent article, Justin, do I need to say more? Thanks for that.

Have a good Sunday all (despite the weather) !

From the article, Justin has posted:

However, as I write in my new book, you need to know the ‘cold’ truth and then be much cleverer than before to target and exploit precise niches.  These certainly do exist and I am a great believer in the cliche that states: ‘where there are problems – so also are there opportunities.  This is never more so the case than when a country has long term economic problems.  You just need to know where the opportunities are – or how to operate laterally within a troubled economy! 

I certainly would add my two cents by saying:

1.- Rent before buying and if you need to stay on rentals.... why not?

2.- Start with the smallest of the investment but the highest of the professionality

3.- Contribute in forums where people may need you. Associate ( in a more or less formal way) with others in your  same wave

4.-Give, give, give before thinking of receiving

5.- Stablish very clearly your business object but also your values, your mission and your philosophy. Do not do anything you do not believe in

6.- Think of creating richness, oportunities, jobs ,possibilities more than on just direct benefit (this will certainly come if you set a good orientation to your business)

7.- In terms of areas of work English language is always a need, I would also add cultural products, interrelation experiences, ecological works, third age, handicapped... services which are not well covered in Spain

** EDITED **

This message was last edited by goodstich44 on 07/12/2010.

 Dear All,

good stuff all round, well put most.

Thought the Iran bit very odd, though the need for both countries to put their house in order is somewhat similar.

One question, if the boom was just a market con, a bubble, silly money and fraudulent promises by the sector, how many decades to stability in the industry.

Why do sensible people look for a recovery?????????

What is there to recover????????

What hope is there for National change????????

Little without the boycott to bring the country round.

How many demolitions have there been to date??????

How many land grabs have there been?????

When are Building Regs going to be applied?????

Until these at least are brought under control there is no attraction to invest in property.

BOYCOTT NOW

Regards

Norman

On the one hand we have Maria who is understandably looking for solutions for her country, for ways of retaining some financial interest by foreign nationals in Spain, so that the economy can survive. Her solution is presumably, given the massive over supply of apartments, to shift the emphasis from purchasing real estate to the rental sector, which sounds a reasonable alternative so long as consumer protection is in place within this sector. (is it?). Perhaps she sees the Banks have an opportunity here to release their real estate into the market place as a means of weathering the storm, which again sounds reasonable. Except that, by releasing this supply into the market place, won't this exacerbate problems for those foreign nationals already looking to the rental sector as a means of paying off their outstanding mortgages to the Banks....... won't their rental values depreciate significantly due to the over supply and place them at risk of defaulting on their loans? And what happens then, the debt builds up, the Banks seize the properties or foreign assets, and we are back to square one with not only an over supply of rental property but also an overburdened supply of real estate that no-one wants to buy. The government through their lack of control of the real estate sector and developers, many of whom have built substandard properties, and their lack of control of the Banks, who have failed in their responsibility to provide or honour Bank Guarantees according to the laws relating to offplan purchase, are ultimately responsible for this demise.

Then on the other hand we have the innocents who are struggling to achieve justice and their rightful return of monies following breach of contract, who Maria was suggesting might be interested in doing deals with the Banks. Given the above scenario it is hardly likely that many will want to or would be advised to do deals, so long as the situation relating to oversupply continues, as they will be burdened with a depreciating property, depreciating rental income, increased outgoings associated with their property as local governments desperate for income, look to this sector via increased taxes etc, with little chance of employment for those who wish to live in Spain. So it is imperative that all "innocents" recognise the true situation and come together to ensure that those responsible are made accountable.

Then we have the innocents caught up in the demolition and illegal build scenario, caught as pawns between the local and regional authorities, who have either given agreement to developers to develop land when they had no right to do so, or land has been grabbed under little known bylaws, all under the watchful eyes of legal professionals who were either in ignorant bliss (no excuse), or in collusion with developers.

Is it any wonder therefore that many foreign nationals have now lost complete faith in Spain and its inexcusable treatment of those who looked to this country as a form of investment or for a new home?

Until Spain demonstrates that it is willing to put right the injustices, there may well, sadly, be a growing call for boycotts I'm afraid. No-one should underestimate the level of injustice that has and is still taking place here.

 To answer Marjolein's question "when will the miracles happen". It will happen when Spain demonstrates to the outside world that they have a government that are prepared to acknowledge and correct their faults, to adminster true justice, reform and update their legal administration system and improve consumer protection. Only then will people feel comfortable to invest in a country which has so much untapped potential.

This message was last edited by ads on 07/12/2010.

This message was last edited by ads on 07/12/2010.

 Dear Ads,

thoughtful and good but..........

"No-one should underestimate the level of injustice that has and is still taking place here."

What else exactly do you think the selfish happy "spinners" and "hungry traders" are going to do?

Admit the truth ............. NEVER

They have long since put the Priors' demolition video into the distant recesses.

JOIN THE BOYCOTT AND GET OUT NOW

Regards

Norman

there is no getting away from the facts laid out in the last post by ads.  What is the point of even trying to encourage investment  when such massive correction is needed in the crucial areas?.  Until enough people pull in the same direction to bring about this change, then surely a further decline is inevitable, and to what depths?.

What we certainly don't need is division between those who are mainly happy with their lot (at the moment?)  and the rest.  It's in everyone's interest to recognise the reality and take action.  The ''i'm alright jack'  attitude seen on this forum alone will no doubt come back to bite, and has started already in the form of property price decline and lack of investment. 

Goodstitch

you have to understand that there are many people who have lived in Spain

well before this current crisis and probably before the last one 12 years ago

they paid a fair price for their property and would still be able to make a profit

even if selling at todays reduced prices.

They are enjoying the life out here and feel no need to apologise for it.

If things get worse dont worry about us ex-pats as we are a hardy bunch.

Most of the people who have had problems bought in the last boom which started about 9 years ago.

many people who bought during this time still have legal well built properties enjoy living here and are quite content

This is not said to make you feel worse but to balance the argument.

No one can deny sympathy and support for those who have been swindled and suffered from

appalling delays in the justice system.

Your cause is ill served by people like Norman who thinks we are all in denial.

Spain has its problems but the shops were full today ,Iceland Lidl and Dunnes

and I am sure La Cañada had its fair share of Christmas shoppers.

SEASONS GREETINGS TO YOU ALL

PS IT MAY CHEER YOU UP TO KNOW IT IS P.........G DOWN

 Dear All,

there is no argument to balance

why do the "happies" insist that there is????????

Spain has always been a refuge for the runaways.

Sundry criminals and tax exiles have always enjoyed the sun and the system.

You would need the flying squad and handcuffs to get them back.

The government has to so something with my PAYE.

But how does this help the Priors???

Now if the "sundries" would join the cause, that could really help.

JOIN THE BOYCOTT NOW

Regards

Norman

peteha

I do understand exactly what you are saying, and I agree that many people have not had the bad experience that many of us have had.  That though is exactly my point. I fully realise that me and others cheated will not make any friends by just slagging off Spain to people who love the place and their lifestyle in Spain. What I'm trying to say is that those cheated have only found out just how bad the corruption/regulation/justice/banks etc are, because we have had experience of it. Spanish and UK people for instance have had their homes demolished in front of them, despite having planning permission. In most cases It's not people having problems because they are any more naive or stupid than those who haven't had problems, but it's because at some stage the person or body that is in a position of legal trust has let them down, and then the so called justice system has done the same. These things can and do happen to anyone. If you have to use the justice system at some stage, you will be at the mercy of the the same people as many of those cheated. If those happy with their lot just stand by and watch the rot deepening then what chance for change to the system that's driving all prices down, ruining the property industry and the Spanish economy?  This is long past sour grapes, the changes so badly needed will improve the lot for everyone on the right side of justice.

Hi Norman

and despite knowing all this you put a 40,000 + deposit on a property in Spain.

How smart was that???

YOU ARE JUST A FAILED SPECULATOR.

Goodstitch you say

If those happy with their lot just stand by and watch the rot deepening then what chance for change to the system that's driving all prices down, ruining the property industry and the Spanish economy?  This is long past sour grapes, the changes so badly needed will improve the lot for everyone on the right side of justice.

what would you have us do other than sign petitions?

all de-camp back to England as Norman suggests?

the England where  the legislators have been enriching themselves

at the expense of the taxpayer.( MPs expenses)

the England where pension companies have defrauded millions out of their pensions?

these and other instances are reported widely in the Spanish press

the Spanish would be loath to take criticism about corruption from the English

Justice for the wrongdoers has started.Follow the Malaya trial in Malaga  where all those bribed

by developers on the costa del sol have been brought to trial,jailed and their assets seized.Senior politicians not just minions.

A small step maybe but at least the corruption has been recognised by the courts.

peteha

As you say, many would not want to return to the wet and cold UK with all its own problems, and that's understandable.  Many can't though even if they wanted to?

The justice in Spain for wrongdoers is at best very patchy though, and in some of the most important areas such as banking, still  not happening at all for many people.!  As i'm sure you know, some  banks never even provided bank guarantees and even some that did are refusing to stand by them. Where's the justice then for those cheated?, how many banks are in the dock for not abiding by law?. Often the lawyers in Spain who should have been protecting against wrong doing are as corrupt and the same goes for others in positions of legal trust such as  planning officials right through to the courtrooms.  Court appeals, court delays, sentence delays etc, are often no more than corruption under another name.

While much of this might not be seen as affecting those who are content with their lot in Spain, the lack of regulation and corruption issues have no doubt had a big hand in the demise of the property industry leaving many thousands of unfinished/unwanted property (which many banks are now exposed to debt wise) , lack of demand, lack of investment and massive  price falls, surely must be seen as a spiral downwards by everyone? 

I realise there is certainly no easy or quick answer, but if all people in Spain will do is sign petetions, then just how serious do they expect to be taken by those who should be under huge pressure to make long overdue changes?.  I've seen far more action for student fund cuts in the UK  than I've seen action for the collapse of Spains potentially huge property industry, and increasingly the whole economy. 

 Obviously all people like myself and many others in the UK cheated can do is support any moves for change that will hopefully one day bring justice for not just for ourselves, but for every decent person involved in the Spanish property industry.  It's in everyones interest to see Spain once again prosper, and avoid yet another bail out, but as long as lack of regulation and corruption is regarded as sort of acceptable, because 'that's the way it's always been', then how many will want tio invest?, and what will halt the decline?.

 Dear All,

we all have to act or not act as our conscience dictates within the freedom that the system we live under allows.

any concern we show for others misfortune is I suppose dependant on our "niceness" our "milk of human kindness".

Perhaps I am lacking in that regard but I find it very difficult to accept silliness or juvenile behaviour in adults.

I cannot abide the propensity on this forum to insult and abuse the victims as deserving idiots, when all they have done is to trust lawyers, officials and supposed professionals.

As everybody knows I am a huge fan of the forum and what Justin has done here, I am very keen on Maria's and others attitude and efforts to improve matters for the consumer. I hope and believe that this interaction has encouraged efforts to improve things.

We have had magnificent posts and information from some extremely intelligent and competent people and long may it continue.

My own plight would have been avoided had I had early access to this forum, it has taught me a lot.

Principally that there is a gulf in the two countries understanding of what a "professional" should be in behaviour.

Exceptions of course make the rule.

When I accused my lawyer of "insanity" in exchanging contracts with no completion finance in place, that was at an early stage in my learning curve and of course it implied both negligence and corruption.

I am of course delighted that improvements are ongoing and hope is alive.

Nevertheless everyone should accept that by staying and supporting the regime you are personally endorsing what was done to the Priors and others. Every penny you spend in Spain and every penny of EU money is doing the same.

There must be somewhere else available where these practices could not happen. Perhaps even somewhere sunny?

JOIN THE BOYCOTT

Regards

Norman

@Norman,

"JOIN THE BOYCOTT AND GET OUT NOW"

Here we go again!

People on this thread are talking about the economic situation here in Spain, and all you can do is spit vitriolic comments in an attempt to take over yet another thread!

If I were a moderator on this forum, then just for the comments you have made on this thread, I would ban you from the site!

They are not helpful, nor informative about the economic situation in Spain!

Maybe people now can see your hidden agenda that I realised quite some time ago:

"I've been ripped off, so rather than try and help people avoid the same, I'm going to BOYCOTT everyone who has anything positive to say about Spain in a futile and puerile attempt to stop anyone else buying property in Spain!"

Now, back to reality and the topic of this thread:

Yes! The Spanish economy is no where near out of the woods yet, but then again it is the same for many European Nations.

Spain's debt in proportion to GDP is nowhere near that of Greece, Portugal and Ireland. In fact the UK's debt to GDP ratio is much higher than Spain, so why aren't the 'speculators' in the 'money markets' turning on the UK next!

Simple, it's easier to turn on Spain and Portugal, because they are a true Eurozone country, where as the UK is not! And they stand to make more money out of destabilising a Eurozone economy such as Spain!

Ask yourself one question, if Spain, Portugal and possibly Italy all get bailed out, what country would the 'speculators' look to next..... the UK?

Also, would the Eurozone and the Euro survive if Spain gets bailed out, and what would happen to the European Economy, which includes the UK?

In fact, what would become of Europe then?

Who would bail out Europe? The USA? China?

These so called 'speculators' caused all the problems back in 2008 that, quite literally, brought the World's economy to the brink of collapse overnight, and the World's Governments had to intervene and suspend trading!

Spain has introduced massive Austerity programs and are also introducing liberalised Employment laws, and yesterday also introduced Tax Breaks for smaller companies and further measures to improve the unemployment. The Spanish Government is also working on plans with regards to the stockpile of unsold properties, including making the Spanish Bank's and Caja's be more transparent with the repossessed properties on their books

Therefore, it is much too early to 'speculate' on whether or not this is enough to stabilise ant eventually improve Spain's Economy. However, the Euro sceptics, and the 'money market speculators' are already trying to make a statement to the effect that this is not enough, and therefore Spain will need a bail out package.

What I say is this, wait and see what happens, and in the mean time try and enjoy what you have! Because if the European Economy collapses, then none of us, including Norman in his house in Kent, are going to have much to celebrate!

TechNoApe: It's not nasty speculators. Many countries have been living beyond their means and spending more than they take in tax . This money is spent by govenments to make them popular with their electorate, with no thought of the who is going to eventually pick up the bill. Gordon Brown doesn't have to clean up his mess - he will  shortly become a lord and make a lot of money lecturing, book deals, etc. Governments can bridge thespending gap by borrowing money from investors, pension funds, etc iby issuing bonds. Investors are reluctant to loan money to PIIGS because they might default. Because pension funds don't want to lend your pension money to Spain does not mean they are "targeting Spain" .Spain has to roll over (pay back old lenders and find new lenders)  45 billion euros of debt in 2011 and Spanish banks have to roll over at least 85 billion euros in 2011. Who is going to lend them that money and at what interest rate?

"Because pension funds don't want to lend your pension money to Spain does not mean they are "targeting Spain" .Spain has to roll over (pay back old lenders and find new lenders)  45 billion euros of debt in 2011 and Spanish banks have to roll over at least 85 billion euros in 2011. Who is going to lend them that money and at what interest rate?"

This is what I mean by the 'speculators' in the 'money markets'.

What about the UK banks!

Currently sitting on some £100 Billion exposure to Greece, Spain and Portugal alone, and yet the France, Germany and Switzerland at most risk!

They said Spain was next after Greece, and it wasn't, it was Ireland! And the UK Banks now also have huge exposure to Ireland's debt, with RBS and Lloyds sitting on £54 Billion and £27 Billion at stake respectively.

Just pointing a stick at Spain and saying 'your next' doesn't mean anything when it comes to the financial troubles all of Europe is still facing.