steviedeluxe

Spain to suffer less in recession than other European countries:

http://www.newsweek.com/id/215761

bigglesworth

Stevie

They are all in denial as to just how serious this is. The Euro is in large part responsible for the spread of the crisis.
And there is no plan B.
So Spain, (and Italy, Greece, Portugal, Greece Ireland, the Baltic states etc and just about everyone ecxcept Germany and France) have a lot more pain to go through yet

jojojojojojojojojojojojo

I dont really know how this equates to the current crisis and Zappys efforts, but I was listening to a spanish chap the other day who was chatting to some friends of mine, and he was saying that the problem with Spain, its unemployment figures and finances is that too many people dont register as employed, dont pay taxes (the national sport in Spain is tax evasion) and only deal in "black money" so its almost impossible for the government to get accurate figures on anything. Apparently this is what Zappy is trying to crack down on and its making him very unpopular?????????????

Jo xxx

steviedeluxe

Surely if Germany and France are exceptions, then the Euro can't be blamed ! Surely it's down to an unsustainable house price boom fed by loosening of credit - started in the US but also followed by the UK, Ireland, Spain etc. I'm sure you can make claims that the standard Euro currency makes it difficult to make an escape via currency devaluation or hyper-inflation, but I'm not sure at the moment that UK's escape plan that way is the best option (we shall see)! I think Germany (and to a lesser extent France) escaped the worst effects of the house price boom, which is possibly why they're in a good situation to come out of this mess, plus they still make things. End of the day we've all kidded ourselves in the West that we're getting richer because the value of our houses has shot up through the credit-induced boom. In reality most of the productive stuff has been heading out east. We can either decide to let house prices fall back to the long-term average value (as will happen in Spain) or devalue the currency so the net effect is the same (UK). At least we can still sell financial products, English classes and Real Madrid shirts to claw back some earnings, but it isn't going to be enough to keep our populations in 100% work.

cricketman

Yes. Over the past 10 years or the Spanish economy was growing at very high rates year by year - and was very successful at attractive foreign investment into the country via property.

So they didnt have to worry about what was creating the growth or whether everyone was paying tax. As growth was good enough in any shape or form

Now, they realise property cannot get them any further so they have to completely restructure the economy:
1. going into high knowledge industries like biotech etc which dont rely on concrete or manufacturing (will take years to set up though)
2. making sure all residents are paying their taxes

I would advise anyone who is worried to make sure their income and taxes are sorted out, if not they will be coming for you soon!

rachelk

I wonder if this, plus even perhaps the numbers of expats who for one reason or another don't pay tax, or pay it to other Euro states, is the reason why he's choosing to increase VAT instead of income tax. I don't like IVA as a rule, because it hits the poor as hard as the wealthy, but perhaps he feels that too many are exempt, legally or otherwise, from income tax.

HBG

Over many years here in Spain, and having used many Spanish tradesmen of all sorts, I've never even had the offer to pay an IVA invoice. What can you do? Refuse to pay unless they issue you with one and pay the extra? Not me, I want to integrate into the Spanish way of life.

Casa Santo Estevo

http://britishexpats.com/forum/showthread.php?t=630228

yes

BTW IVA added to any bill is normal even in the UK, never heard of a price for cash?

Hondon Rock n Roll

It does seem to be the normal way, from the plumber to garage repairs, even had my solicitor tell me whenever I asked him for an invoice, he would have to add on IVA if he issued one of those!

bigglesworth

[QUOTE=steviedeluxe;7950902]Surely if Germany and France are exceptions, then the Euro can't be blamed !
No, not entirely to blame, or even mainly. Totally( as always) the hubris of politicaians. Little men trying so leave " their mark on the world".

But its expansion across Europe led many new accession states to borrow in local currencies "Pegged" against euros. Their problems are England's but wrir large. Because the peg cannot be revalued. This can (possibly will) get really nasty.

Relampago

I listened once UK had a similar problem in the 90's, but didn't have the Eurus and it could devaluate its currency. Spain now has the Eurus, then we cannot devaluate our currency. Now to leave the crisis is more complicated

HBG

The argument that countries in the Eurozone can't devalue, e.g. Spain, is very true, but why should they wish to? They have the support of the other 25 countries should something go wrong.

The UK can devalue its currency any time it likes, it's not tied to, or supported by any other currency. It's already devalued by 30% against the Euro and Dollar. The exporters and the Bank of England might be jumping with joy, but I'm an expat sinking into poverty if it keeps falling.

When the pound started falling, I did a calculation to see at what level I would have to return to the UK, where my income is from. I knew I would start to wobble at 1.10, parity would mean a lot of wobbling and something like 0.80 would mean packing my cases.

And that's with a decent income from the UK.

jojojojojojojojojojojojo

Trouble is would you be any better off over there??? double edged sword for a lot of us isnt it!?

Jo xxxx

HBG

I've come to the conclusion that the overall cost of living is now the same for Spain as it is for the UK, certainly when it comes to the weekly shopping bill or the cost of the utilities, and a lot of people are now saying that Tescos is in fact cheaper than Mercadona.

Meanwhile, my exchanged income here is Spain has gone down by 30%. If it falls below 50%, I would be twice as well off in the UK, even allowing for things like council tax.

And I'm not calculating that against some previous high of the pound against the Peseta and then the Euro, but the 15-year average against the falls of the past year.

Returning to the UK is not something I want to do, but I don't fancy Panama and a lot of other places, so what choice would I have?

carter71

Choice?

1. Buy your currency ahead. Probably get 1.10 on 12 months or not far from it.

2. Bill in euros - more Spanish / Eurozone clients. If you're employed, your employer will be paying you over here anyway.

3. Cut your costs - shop sensibly, drive economically, repair, recycle and reuse. Cut up your credit cards and budget with cash. Get a good Spanish accountant and pay less tax.

4. Increase your income. Take another job, work longer hours, offer to help out a friend / colleague / client. Check out local grants and allowances.