What are your thoughts on Spain's economic crisis?

Justin

Money needs to be ploughed into new projects that will create jobs, get people paying taxes and spending money again.  Without it more businesses will go bust, more people will struggle and I can't see at what point it's going to turn.

Please don't let them build any more new airports though

I'm amazed it's taken the Spaniards so long to start rioting, with unemployment so high for so long.  I can understand them protesting against the high rates of unemployment but I don't understand why they are protesting against austerity because there hasn't been any austerity/cuts here yet.  The Spanish government is still spending 10% more that it did last year.  And the public sector here is still massively bloated.

We have 600 town hall "workers" in our town.  The local population is 11,000.  That's one town hall employee for every 18 citizens.  Madness.

It might also result in getting the same answer if one asks several professional experts a question, unlike now where of you ask 6 experts you are likely to get 7 different answers.

"Money needs to be ploughed into new projects that will create jobs, get people paying taxes and spending money again."

Yes Sanchez1, I agree, but people in Europe have got out of the habit of spending money. The trend is to pay off loans & credit cards, not upgrade goods like televisions, cars etc. & reduce expenditure on entertainment, holidays, & dining out etc. People are worried about the security of their jobs, & will get their finances in order first before they spend. In a recent survey in Poland, middle class people were asked what they would do if they received a " nest egg " , most said that they would clear their existing debt. 

I am sure that they are not in the minority.

"Feel terribly sorry for the Spanish - they deserve much better !!"

True Harry07, but my view is that every single person in the world currently deserves better policticians and bankers.

"every single person in the world currently deserves better policticians and bankers "

How true, but it's up to Jo public (or Manuel ) to make them accountable and not expect others to be constantly proactive on their behalf. Only when responsible campaigning and pro-active effort and support from all is employed, will there be any change.

It's all too easy to sit back and consider "well it doesn't affect me so I won't bother" or think "it will never make a difference". The scale and effects are now hitting us all in one way or another, so it's time for us all to RESPONSIBLY make politicians and bankers accountable via respected campaign organisations, such as AVAAZ. To educate of the realities, dismiss the falsehoods and rumour, the actions that drive us apart and allow protectionist negative thinking to rule...... we should be all striving together to regain some fairness by calling for greater transparency and accountability from all those who have power over our lives.

I agree about getting rid of all the regional governments- things like income tax rates, inheritance tax allowances, payments for prescriptions etc should be standardised under central government, and not  be a lottery, according to where you live.

The IBI tax needs an overhaul-none of this paying 34 euros a year when a similar sized house a few miles away has an IBI of 400 euros. Everyone should pay a basic sum of ,say 200 euros, because everyone has the services of fire, police and ambulance available to them, everybody uses motorways, pavements, hospitals, parks, beaches, buses,car parks, street ligh ts etc. Then additional amounts should be added to the basic amount covering house size, extra amenities. At present the system is very unfair- some wealthy people are paying a pittance,  just because they live in the campo, while others of more modest means are being fleeced.

How ridiculous is the situation on Camposol, when only  900 villas out of 4500 are paying IBI, and a  third of those in Mazarron aren't either. Some have their deeds and have been told by the council not to pay. There's not enough money to repair Camposol-wonder why?

Then the police should  have a purge on the crooks driving illegal  (and UK plated) cars and other vehicles, while making loads of money from their businesses in Spain-the police are tolerant and ignore them. All that road tax not being paid!

It is tragic! I suppose many of you are retired folk and are probably not greatly affected by the crisis unless you need to sell a property but you’re Spanish counterparts are suffering more than ever. With retirement pensions being tight as they are, the economic crisis is affecting family dynamics in Spain in a massive way. Many families can only survive due to financial help being passed down through the generations. The burden on the elderly is enormous and crippling many of them. No one is oblivious to the crisis here. 

33% of Spain’s senior citizens has had to help family members during the last two years with money taken from their pension, while 25% has had to house one or more children who have moved back to the parental home. This happened not so long ago to one of our neighbours, he finally had his house repossessed and was forced to move with his wife and three children back to his mothers house. His mother is a widow and retired, an absolutely heart breaking situation. The elderly have become many peoples only option to alleviate the consequences of the crisis. The Red Cross analysed how the crisis had affected 674 people aged over 65, and found that for 70% of them, their saving capacity had been significantly reduced or erased because of increased prices or higher family expenditures.

 The money flow between generations has gone into reverse. Normally it would be children that helped out their parents once they retired. Now those over 65 are supporting the youngest generations financially, a clear result of the high youth unemployment in Spain affecting about 50 % of those under 25.

Also, as a consequence of the crisis many elderly spend much less on food and 20 % said they couldn’t afford to eat fruit, meat or fish regularly. 50% of them said they have couldn’t even afford to visit a dentist or an optician!

What is really shocking with the winter upon us is that 50% of the elderly cannot afford to maintain an adequate temperature in their house and 80% cannot allow themselves any expenditure on leisure activities.

So for those who thought they could finally relax and enjoy their retirement, a new reality has kicked in and most certainly doesn’t seem to be going away. It is not just the young who are desperate, now it’s even the old. Ones who have earned the right to finally relax and enjoy the years they have left will not be able to as they have now been forced to adopt the role of “government” or “banks” by giving no-questions-asked “subsidies” or “loans” to their family members at 0% interest due to the austerity measures here.

This (brilliant!) thread is really putting a different perspective on life in Spain at the moment.  Anyone that's thinking of moving to Spain should take note. We all knew that some people are having a hard time but I, for one, had no idea how bad things have become for some families. 

Every day, we read about expats in Spain who continue to enjoy their lives there for the same reasons that many of us were tempted to leave the UK and set up house in Spain.  Some don't  appear to have been too affected by the economic crisis.  Is this because things aren't so bad in some areas as others?  If so, why?  Is it because some expats live in an area or community that leaves them isolated from what's happening to the local Spanish?  Or is it because they are so settled into Spanish life that they have become part of the community and, as such, will take the rough with the smooth in the same way as we all do when we're part of a community?   I think the answers to these questions could be a deciding factor to anyone thinking of leaving the UK to try out a new life in Spain....

To clarify, the major effect of the crisis is upon the Spanish and particularly the young or unemployed who as referred to in a previous post are now becoming reliant upon the elders of the family.... thanfully Spanish families are very deep and very supportive of each other in both good and bad times.

The reason for many expats returning home is not the same and not due to the crisis, most expats are retired, yes on fixed incomes but as such a gauranteed income in a relatively low cost of living environment.

The crisis is real and here in Spain very punishing for those affected which is not generally the expat community, lets be realistic, honest and not use the crisis as the reason for returning to the UK because that is very rarely the case unless you came to Spain expecting and needing to work.... if thats the case you didn't do very much research as that was a very big ask even in the good times.

It is still a very good life if you have a fixed income at a level that will afford a lifestyle of your choice... if it affords it in UK it will certainly afford it here in Spain plus some.

Barry

Barry you are absolutely right. Spain is still a fantastic place to retire to. The problems arise around those who are looking to find an income in Spain as you clearly pointed out. Spain is tough for the Spanish or foreigners working here but if it's retirement you're after it's cheaper than ever. If you have financial peace of mind I can't imagine a better place.

It would be good to hear of those expats who are comfortable to be also supportive of those in need in these changing circumstances. Nothing will alienate more than to turn a blind eye to these realities, so I wonder if there is a spirit of co-operation gathering from across the different nationalities?

eos-ian,

Highly informative comments from you - many thanks !!

On a broader note, would like to hear feedback from retired expats whether they are affected by the crises in any way ie directly or indirectly ????

Cheers,

Harry

Harry,

                      On a purely personal note.

Prices have risen generally, but also in some areas, bars, restaurants etc, they have fallen a little. 

I am retired. 

My income is in GBP and as the rate has risen over the past months, on balance I don't notice any differences.

I remain very content here (25 years)  and no intentions of leaving.

I do know that for worker things are bad and I expect after the budget announcements today, will get worse.

As a UK pensioner,  of course all the money I spend I have 'imported' so, like others in a similar situation I am contributing to the Spanish ecconomy.  I also choose Spanish products over imported goods.

There is of course a lot of money unaccounted for in Spain, i.e. a lot of money that must have gone into individuals' hands.  I am aware that the authorities are checking through the accounts of the town halls of Andalucia, alphabetically.  If this were done correctly, I reckon hundreds of millions of euros could be 'found.'  For example, if a Mayor, planning officer, town architect etc., was earning, for argument's sake, 30,000 euros a month and was the sole earner in a family of four.  This person was then in their position for four years.  One could assume that such an income would mean that they got by okay, could afford to run a car, maybe even go on the odd holiday.  If, on the other hand, during that period they had bought a piece of 'rural' land on the outskirts of the town, had this reclassified as urban, making it worth 20 times as much, had then found the money to construct an apartment block or several villas and fully furnish them and then either rent them out or sell them, shouldn't they now have to account for how they managed to do that?   Where did the money come from?  And if they can't explain it, then that money should be returned to the coffers of the local authority, who could use it to pay its vast debts and get the local economy moving again.  This pattern has happened time and time again in Spain and I have not heard about the money and properties being seized; this would raise a vast sum of money legitimately. 

There was also an incredible amount of waste in the past.  I don't know if it's true, but we were told that a big cement roundabout near us cost one million euros to construct - and it was funded by the European Union.  How could it have cost a million?  How was that broken down?  How many bags of cement were used?  Where did the rest of the money go?  Did it cost 100,000 euros to design it.  Where I live in the UK we have some lovely roundabouts; simple, sometimes very large if it's a big motorway junction, with some lovely trees on it.  No fancy concrete or water features.  How on earth could money have been squandered like this?  Again, there should be an argument for recouping some of this money.  I've heard that the Spanish tax authorities can just take money directly from a person's bank account if they suspect them of evading taxes.  What about the Government looking at either implementing laws they already have at their disposal or passing some new ones to get their hands on some of the money that has been stolen over the years?

Yes, John.  You're right.  No money went astray in Spain over the last few decades and the public officials are incorruptible.  The anger being demonstrated in the Madrid protests was irrational and the legal cases that have been occurring throughout Spain, including Malaya, are built on sand. 

In fact, it is critical that all avenues are explored to get Spain out of this mess and if it is evident that many people have a source of wealth that they cannot explain, this should be investigated, initially by the tax authorities.  The Spanish people are very aware of all of this; it is only some expats who bury their heads in the sand, and believe we should gloss over these aspects of Spanish life.

Hi John,

You mentioned below that prices have risen generally & I am sure what you say is correct.

Are you referring more for example to utilities, Government charges etc since I imagined most service industries would be under even more pressure to compete.

Glad all is well in Spain for you !

Cheers,

Harry