Expats to be 'rescued' from Spain and Portugal!!!!

 REally surprised this morning to log in and see that no one has picked up the story in the Sunday Times about how all of the ex pats are going to be brought back to the UK if the banks collapse.  I thought I would kick off by asking how many would want to be shipped back to the UK???    It seems to me that most of the people I know who live abroad (and I have a brother who has been in Portugal for over 20 years now) mainly draw income from the UK.  So, the Spanish banking system collapses (or the Portugese or both), and the ex pats are better off in the UK?????   Are they???   All the collapsed banks call in their mortgages ????   Can't wait to see that shambles!!!!!   (That is a joke for those who need to have that pointed out to them - I tend to be an optimistic sort of a person, and would just remind people that the Latin American countries which are now booming have all been spectacularly bankrupt in the relatively recent past!!)

Just wanting to hear thoughts on the article really. 

I have to admit that the way I read it is that the UK Government fears for the safety of their citizens.  If the banks collapse, no-one will be able to draw funds and in the past this has let to looting and insurrection.  Banks that have gone bust will simply go out of business unless their Govt. bails them out, in which case they won't be bust will they?  The problem is that the Spanish Govt. don't have enough money to do that and nor does the EU unless they print money, which so far they have been disinclined to do. If the banks do go bust they go into the hands of the receivers, but there will be no organisation to immediately call in their loans and most mortagees will have simply stopped paying in anyway by that time.  The answer of course is for the country to drop out of the Euro, devalue and print their own money.  This would also lead to chaos, but of a more controlled kind and most banks could continue to operate and both collect and pay out funds (which would of course be devalued).

I think that at least our Govt. is looking ahead a little and making a plan 'just in case'.  An encouraging sign from an organisation which hasn't been able to think 'up front' for generations.

M.

I have cut and pasted the article below for those who have not seen it.  It is the bit about 'thousands of penniless Britons' which has me puzzled.

 THE BRITISH Foreign and Commonwealth Office is drawing up plans to evacuate thousands of British expatriates from Spain and Portugal in the event that their banking systems collapse, reports the Sunday Times. 

The number of expats living in Spain has increased more than sixfold in the last decade with emigrants nows making up 12% of the population.

According to the paper, Foreign Office sources said it was planning for a “nightmare scenario” with thousands of penniless Britons sleeping at airports with no money and no means of getting home. 

Among the contingency plans being discussed are sending planes, ships and coaches to evacuate expats.

It comes as credit rating agencies warn that the deal struck by EU leaders this month may not save the single currency from further turbulence and possible collapse.

The Treasury confirmed to the Times that plans to give emergency aid to Britons if eurozone banks collapse were being prepared but refused to give details.

The paper added that a senior Foreign Office source said the plans were being drawn up to deal with a worst case scenario. It is drawing on experiences of other mass evacuations, such as during the 2006 war between Hezbollah and Israel where the UK sent warships to evacuate expats from Lebanon.

why on earth would the UK government spend tax payers money on repatriating people who have left the UK 'for a better life' else where.

Prehaphs this is yet another symtom of the problems of the UK where governments (who have no money) are quiet prepared to spend money they borrow from the East and hope the future UK tax payer can earn enough to pay it back.

Must be Xmas nonsence.

David

 Or as one ex pat said on the discussion forum - 'what a load of balls!!!!'

We can all speculate, but of course no-one knows. 

But I reckon there is cause for concern - if the Euro does collapse there may well be turmoil and widespread riots - looting similar to that in the UK in October may follow.  Hopefully the Spanish authorities will anticipate the problems, but sooner or later the Euro/sovereign debt crisis must come to a head.

 I didn't in any way mean to diminish the seriousness of the situation - which we must all be concerned about.  It just seemed like half baked thinking to me.

Yes, the Times article is most odd and more than a little discourteous to the Spanish.  But the reality is that the sheer numbers would make the exercise impossible - the article equates the problem to that in the Lebanon, but the numbers would be a thousand fold !  Just never ever going to happen.

So the  British government is worried that expats might be caught up in looting and rioting when Spain's banking system collapses. I live and work in London, rioting and looting happen here at a drop of a hat. The government is also slashing funding for social services etc, who says the expats will be better off back in the UK.

What is the government planning to do long term for all these thousands of 'penniless expats' ?

Do what allot of people in the UK are doing already, stock piling food and water. I do not think things would be better back in the UK.

I am no gambler (or at least not intentionally!) but if I was these are my views on the likelyhood of the various possible outcomes for the Euro:

Greece will leave the Euro – it can’t ever repay its borrowings and there is no sign that Angela is going to give them a huge bag of money. A good time to do this would be during the Christmas holidays. They don’t have to print Drachmas just rubber stamp the existing ones as Greek only. They may not be ready yet so it might be some time in 2012.

What happens next is harder to predict.

Scenario 1: Efforts to contain the damage are successful and the rest of the Eurozone will continue with Southern Europe in permanent recession as their currency is overvalued while Germany prospers as theirs is undervalued. My guess is this is 30% likely

Scenario 2: The core Northern European nations work together to save the rump of the Eurozone. They realise they can’t save everyone and they let Portugal, possibly Spain, then Ireland and if all else fails Italy go. Belgium is also a basket case but closer to home and it contains Brussels so they will try very hard to save it. The knocks on effects are greater the more countries drop out – if Spain drops out our investments are trashed but the cost of living in Spain is reduced. My guess is that somewhere in this range (2-6 countries drop out) is 60% likely to happen.

Scenario 3: The current pattern of doing to little to late continues and the markets decide the Euro is finished. This is the worst case scenario. Civil unrest, economic collapse and God knows what else. I hope this doesn’t happen but it is 10% likely. Which makes the UK Government contingency planning – and it is only planning look prudent.

This story also appeared in The Times.

I think at the end of the day they have to have plans in place but if it means that it all does go pear shaped, well, a ride on a warship back to UK would be pretty cool (Go to focus on the positives!)

Justin

I have read eyeonspain forums for some time now but this is the first time I have replied to one.

We have been watching the news channels for several weeks now...no good looking at BBC because they don't tell you anything of any consequence...and we, too, have been concerned enough to start storing tins and water in our garage - just in case we can't get the fresh stuff as easily as usual.  AND, we have taken a lump sum out of our savings accounts (we are lucky enough to have some savings!) just in case we can't get hold or our cash.

The euro is going down in value against the pound at the moment, for all the reasons mentioned, which will make the cost of living in Spain cheaper for Brits who have sterling accounts - eventually - as long as the banking system doesn't collapse. We exchanged our euros for sterling last week before the euro goes down any further.  I'm afraid Spain is off our agenda for now as far as holidays are concerned.  The last time we were there, a few months ago, we were saddened to see how hard things have become for many Spaniards and it wasn't a happy place to be.  Our worries came from the fact that a small number of Spanish actually lay part of the blame for the problems they are experiencing on the influx of British to their country (albeit unjustified).  We don't want to be around if this comes to a head.  British-owned property would be an easy target for looters.

Maybe, the British readers of eyeonspain are in happy positions as far as living in Spain is concerned, but there ARE still many Brits that are in unhappy posistions where they can't sell their homes, they have no money, etc etc, and they would love to be 'rescued' and taken back to the UK.

Things are going to get very difficult in Europe in the months to come and, for us, it feels better to be here in the UK where we were born and where we are accepted as 'belonging'.  I think you have to ask yourselves, why would the British governent waste time getting such a plan together unless they thought it was a real possiblity?  Usually, things aren't thought about until after the event!

 One 'good' reason for making plans like this is that it keeps someone in a job - or probably a whole bevy of people with nothing much else to do!!!!   And who is stock piling water and food?????? OMG - I have missed out on this!!!   And I am an avid t.v news watcher!!!    

I fully understand the concerns of everyone that has posted messages. To be honest I don't think they have a clue how to sort the problem out. Sarkozy then blames the UK for not agreeing with the rest of the Euro zone to use a tax on the City of London which raises 53 billion for the UK economy to bail out their mess. It's probably the only good thing left in the UK. Not that I agree with bankers bonuses for failure. It's not a coincidence that Merkel and Sarkozy both have elections coming up. It's all politics ( saving their own skin first ). The governments blamed the ratings agencies making them the scapegoats for any crisis. Had the governments properly regulated the banking systems worldwide instead of sipping champayne on Russian oligarchs yachts, or illegally claiming expenses like watching porn films in hotel rooms or cleaning moats, we would not be in this position. It's amazing how two faced governments are. The UK government are now praising themselves for having such a good AAA rating and low Government bond interest rate. What short memories they all have. I think the Eurozone was doomed for failure from day one. There are too many countries involved making it far too complex for it to work. Regarding MaddieMacks comment, " Taking lump sums out of their account ", I agree you must be worried about your savings, but if everyone was to panic, this would cause a run on the banks and we all saw what happened to the Northern Rock. It would be a disaster for Spain. I sort of agree with Davmunster scenario 2. I think Greece, Italy. Portugal and possibly Spain will go, but not Ireland. I think Ireland can create enough growth over the mid to long term to get themselves out of trouble. I can see a lot of businesses closing down in the UK in the New Year with the UK probably falling back into recession until the third quarter of 2012. I would love to know the names of the Greek government members who were responsible at the time of signing up to the Euro that fiddled the books. Why are they not in jail. The same for the mortgage brokers in the US that were giving out mortgages to people on benefits, just so they could get huge commissions, and telling people that they could afford the payments but not telling them that 12 months down the line the payments would double or treble. Why are they not behind bars, and why has all of the money they made not been taken back from them and used for people that are in difficulty now. If there is no real consequence people and countries will continue to do it, because they know they can get away from it.

 I am with you johnzx - and so I will not be stockpiling water or horrible canned food.  And there will be life after the crisis - you only have to look to Latin America to see that.

Or is it better to "hope for the best and prepare for the worst" ? 

At the very least, it would surely be remiss not to do something that might would cost little or nothing and make life better if the worst happens.

 Well said johnzx!!!

Let's be positive, live for today and appreciate what we have.

Happy Christmas and best wishes for 2012!

Hi Brian,

I read the article, as it was pointed out to me by another ex-pat friend. I was toying with the idea of going back to the UK after 17 years here anyway, and although I have a property here, I bank nothing in Spain apart from money for the bills and mortgage. The property has negative equity, as I bought it in 2006. I can no longer earn a living in Spain, and earn my money from the UK. So if the UK government want to arrange a free ride home, great say I .. thanks very much

 But that was the point I was trying to make.  I think most ex pats in Spain take an income from the UK, and are only using Spanish or Portugese banks as a sort of transition point.  So I do not see where the queues of penniless expats will come from.  And sadly, I cannot see the government repatriating people free of all charges - or I am just cynical?   They can claim back part salary from a soldier killed in action's family - they  seem unlikely to foot the bill for something like this.