Category Archives: News/Finance

Discussion Group Ronda looking for new members

Another fantastic initiative in Ronda is now looking for new members and “The objetive is to improve the relation, integration and debate between English and Spanish people”

Discussion group Ronda is a collective which was created a few months ago to improve the interaction using both the Spanish and the English languages whilst enjoying a pleasant and relaxed atmosphere. Gathering to exchange ideas about different topics and improving the language is the objective for this group, promoted by several people from Ronda and England. Continue reading Discussion Group Ronda looking for new members

Spanish Banks to Transfer Toxic Debts to New ‘Bad Bank’

Mariano Rajoy´s government on Friday approved by decree a fundamental change to the banking sector with the creation of a ´bad bank´ to take ownership of toxic debts held by Spain´s mortgage banks, notably Bankia, Santander, BBVA, and the various cajas with high debt to assets ratios.

Responding to demands from the ECB and other Eurozone members to clean up Spain´s banking industry, the move is expected to satisfy Eurozone partners and start the process of Spain receiving upto 100 billion Euros of banking sector bailout funds to stabilise the economy.

Speaking after the announcement Soraya Saenz de Santamaria, the deputy Prime Minister, said that this additional decree and the creation of the ´bad bank´was needed to “get credit flowing in the economy” again.

Banks with distressed property assets that are transferred into the ´bad bank´ will walk away with a combination of cash, debt or shares to add to their balance sheets, with the requirement that all banks increase their core capital classed as rock solid to 9% of total assets, a shift from the current 8%.

As well, the government announced that remuneration for senior managers and directors of distressed banks would be capped at 500,000 Euros per year, in an effort to stem protests at former directors of failed banks taking home millions of Euros in compensation at the expense of bank shareholders and depositors.

Olli Rehn, Economics Affairs Commissioner for the EU praised Rajoy´s cabinet for approving the decree stating that the creation of a bad bank sends an important signal to the world financial markets that Spain is determined to clean up and strengthen its banking sector.

With unemployment over 25% across the board and important regions such as Catalonia and Valencia asking for central government bailouts, Rajoy´s cabinet needed to do something to stem the banking sector crisis before tackling local government debt.

The Bank of Spain warned at the same time that capital flight to foreign banks had reached 20% of GDP, with June alone seeing net capital outflow of 56 billion Euros, and an estimated total of 220 billion in the first half of the year. Both the Spanish government and Eurozone will be hoping the creation of the ´bad bank´ will be sufficient to restore some confidence and stem the flow of cash leaving the country´s banks.

In a concession to the Spanish public, the economy minister Luis de Guindos announced that the government´s banking agency (Frob) will be given new teeth to take control of failing banks, and replenish funds in the depositor guarantee scheme which have been completely used in previous bank rescues.

Lidl and Decathlon May Soon Come To Ronda

After the huge debacle of the Eroski Shopping Centre project collapsing amidst police investigations of corruption against the former mayor and some of his closest colleagues, news is beginning to emerge that other major brands, namely Lidl and Decathlon, may soon announce projects to establish a presence in the city.

The Eroski centre on Avenida Malaga had been intended to house a new bus station, a hypermarket, cinemas, food court, and other retail space, and the project collapse means hundreds of jobs that were to have been created during construction and then as part of ongoing operations have not materialised, leading the current PP/PA government to seek out new opportunities for investment in Ronda.

Ronda still does not have a current general plan (PGOU) for urban development, leaving many hoped for projects in a state of limbo, including hotel developments in the Casco Historico, and the much hyped tourist information and welcome centre along the Tajo. Of more pressing concern however is the lack of space within the industrial area for job creating investment.

Danial Harillo (Delegado de Obras y Urbanismo) the councellor for urban works has confirmed to Ronda Today that the PGOU is his highest priority, and that in the coming weeks he is hopeful the amendments presented by his team will be accepted by the Junta de Andalucia, and that after a 3 month public consultation it will be possible to sign off on the plan which has been in progress since 1995.

Additional zoning for new industrial and commercial developments is to be allocated on land near to the new hospital, as well as expanding the poligono towards the railway line and ring road, both of which would give much needed space for large developments. Lidl had previously expressed an interest in a plot adjacent to the Ford dealership on C/ Rio Odiel, however this now appears to be in doubt.

Decathlon had been mooted to be interested in taking control of one of the Supersol locations in the city, and the recent sale of the entire Supersol chain to Lithuania’s Maxima group could yet see one of the two stores close despite assurances to the contrary. Maxima group had been linked with France’s Carrefour chain as possible new owners of the two stores in Ronda, though it now appears Maxima will start a rebranding exercise nationally after an audit of store performance and customer profiling is completed.

Rumours around Ronda suggest the Supersol on Calle Genal would be the likely loser if one of the stores was to close, strong competition from Aldi and Mercadona having made the store uneconomic to operate, and despite the possible conversion of a vacant lot opposite Mercadona as the new location for the city bus station.

In related news, the mayor Maria-Paz Fernandez has confirmed she is keen to close a deal on the location of the old military headquarters in the city on c/ Commandante Salvador Carrasco which would see an underground carpark built along with a cultural centre and outdoor plaza that will likely house a library.

Diamonds Discovered in the Serrania de Ronda

Geologists from the Universities of Malaga and Granada in association with experts from Germany have confirmed for the first time the presence of diamond bearing rocks in the Serrania de Ronda.

A team of geologists had started a survey of rock formations in the Serrania 5 years ago as part of continuing research into rock types in Andalucia, and two years ago stumbled on small diamonds. Carlos Sanz de Galdeano of the University of Granada explained, “we weren’t looking for diamonds, it was a fluke, but there they were”.

The diamonds found are microscopic and for the most part not visible to the human eye, though may still be desirable to commercial miners for industrial uses such as cutting tips or polishing plates. In addition some jewelers use microscopic diamonds joining them together to create small diamonds though pricing is necessarily much lower than a single stone.

Two of the locations surveyed showed different sizes of diamond, the first containing micro diamonds hard to see without a microscope, while the second location found micro diamonds visible to the human eye under light. The density of diamonds was much lower for the larger size.

Asked if commercial mining of Ronda’s diamonds would be viable, Maria Dolores Ruiz one of the project leaders, said only that the discovery of diamonds was still in a preliminary stage and that the volume of rock needed to be crushed would be substantial and that only mining companies with experience of extracting micro diamonds would be able to assess viability.

As a side note, commercial extraction of micro diamonds has been ongoing in Kazakhstan for many decades, with huge impact on the local environment, and that type of mining in Andalucia may face significant obstacles from enviornmentalists and local government.

The survey covered the Betica range, which also includes Jubrique to Torrox and passes through the Sierra de las Nieves Natural Park,though it is understood the diamonds discovered were not within the park boundaries.

Spanish Government Restricts Cash Payments to Close Black Market

On Friday last week the Spanish President Mariano Rajoy introduced a new financial reform bill into congress, which includes a 2500 Euro limit on cash payments where one party is a business person in an effort to reduce the size of the black market and eliminate false invoices.

Rajoy’s government estimates this will bring an additional 8.1 billion Euros into government coffers and is just one of several measures being introduced to combat tax avoidance. Current estimates suggest as much as 30% of the Spanish economy is fueled by the black market, but as the financial crisis deepens this may increase.

Businesses and self-employed who continue to pay or accept payments greater than 2500 Euros in cash will now be subject to fines that could total as much as 25% of the total disbursement.

All businesses are affected, including hotels and guesthouses, and whilst the move may be difficult to police, Spain’s taxation authorities may adopt more stringent assessment criteria in the event significant cash transactions are suspected.

Private individuals receiving an invoice greater than 2500 Euros, for example building repairs or installations, buying furniture or other high value goods, or paying for holidays etc will now be required to pay using their bank issued card (cc or debit) or send an electronic payment.

Spain is Still the #1 Destination for British Property Buyers

A British magazine survey has once again confirmed Spain as the number one property destinations, despite nearly half a million brits leaving the country in 2011 due to the economic crisis in Europe. Official statistics place 391,000 British in Spain, a figure that is usually considered much lower than in actuality due to the number of expats who don’t register for NIE or empadronamiento.

Helping insulate the property market from further losses were 24,815 British new arrivals in 2011 a significant percentage of are presumed to have bought property whilst prices remain depressed.

The value of property in Spain has fallen by around 30% in major cities Madrid or Barcelona, and as much as 50% or 60% in some places where availability is higher than demand. Coastal areas popular with British expats like the Costa del Sol, Costa Calida, and Costa Blanca were particularly hard hit.

The annual ‘Ten Best Places to Buy Abroad’ conducted by A Place in the Sun is widely considered a barometer of British perceptions about the overall safety and desirability of foreign property destinations, and Spain placing first will no doubt be a huge relief to real estate agents who specialise in expat property sales.

Destinations appearing in the top ten list in order of popularity were Spain, France, Portugal, Italy, USA, Turkey, Greece, Cyprus, Caribbean, and Malta. Seven of the ten destinations are Eurozone countries including the top four.

The USA has risen in the list, notably due to the availability of foreclosed homes in sunny states such as Florida, and the Caribbean is a new entry, suggesting that cashed up buyers are willing to relocate considerable distances.

Reasons for continuing to buy in Europe haven’t changed, with Liz Rowlinson, editor of the magizine saying “What’s really interesting about our annual ‘Ten Best Places to Buy Abroad’ survey is that it shows UK buyers as sticking to tried and tested European countries – yet also willing to travel further to destinations such as Florida and the Caribbean to find their perfect holiday home location.”

Antonio Marin Lara and Former Councillors Arrested

This morning Antonio Marin Lara, and three other PSOE councillors Francisco Cañestro, Rafael Lara, and María José Martín de Haro were arrested and will be charged with corruption and money laundering offences.

Agents from the National Police division, the Unidad de Droga y Crimen Organizado (UDYCO), the drugs and organized crime unit, this morning arrived with warrents to arrest the four former councillors at the offices of the town hall and the Office of Urban Develepment, both of which have been registered as crime scenes.

The investigation against former town councillors has been ongoing for more than 12 months with specialist agents drafted in from Malaga to collect and assess evidence against the accused.

Ronda Today understands that all charges will likely be related to urban planning discrepancies. This morning staff arriving for work in both of the offices affected were prevented from entering the premises as further police arrived with large numbers of empty boxes to remove files and documents.

Police have confirmed that they will be widening their investigation and that the private homes of the accused will be sequestred to collect further evidence. Court approved wire taps have been used, and police say several other people, including civil servants and private citizens will be questioned with possible further arrests.

Update 12pm: The regional PSOE-A of Andalucia moved this morning to suspend all four of the accused, meaning that their seats in Ronda’s town council will shortly be filled by other list candidates from the recent municipal elections.

Update 3:30pm: A further three people have been arrested and will join the first four detained in Malaga where all will be formally indicted in court. The police have further announced that crimes being investigated also include forgery, malfeasance, destruction of evidence, and bribery.

Spain to Reintroduce Wealth Tax

With growing concern at the state of the Spanish economy and ongoing efforts to reduce the budget deficit failing, the Spanish government will today reintroduce a wealth tax (patrimonio), which it abolished just 3 years ago. Spain’s deficit reduction is part of a stability agreement with the European Union in response to the current financial crisis affecting the Eurozone.

The new tax is expected to assess wealth in the 2011-2012 years, with income to the government coming into treasury in 2012-2013. Hoping to raise an additional 1 billion euros, Elena Salgado, finance minister in the PSOE led government stated that the tax will likely affect 160,000 of Spain’s wealthiest people, who will face tax bills of upto 2.5% of their declared assets.

Citing concerns within PSOE that Spain’s former wealth tax unfairly targeted middle class savers, Salgado confirmed the new wealth tax threshold has been raised from 120,000 euros to 700,000 euros, but refused to speculate on post-election threshold. In addition, exemptions for people’s homes will be set at 300,000 euros.

The introduction doesn’t require parliamentary approval, a full sitting of cabinet being sufficient, and it is understood the opposition PP who have previously rejected a reintroduction of the wealth tax will accept the measures, and may choose to retain the tax after the election if successful in forming a government.

The move is expected to be popular with left wing voters, and could reduce the 15 point difference in opinion polls between PSOE and PP, though with decisions by PP recently to back the government on stimulus measures, including the constitutional change to ensuring Spain’s central and community governments balance their books, polls may not be as affected prior to the Nov 20 general election as is hoped by PSOE leaders.