Spanish Property News Roundup
September 7th, 2010
Most of this week’s news stories have a positive theme – albeit with some darker undertones.
In Spanish Bonds Attract Global Banks we read that “The use of Spanish government bonds shows that confidence in Madrid has risen in recent weeks as fears recede that the country’s sluggish economy will trigger defaults on bonds and loans.”
However, the same article also concludes: “Analysts also caution that improving sentiment in Spain is only one factor, especially as the US and many of the eurozone economies are still under a cloud.”
Then, the fact that the mortgage rate in Spain is increasing is an early indicator of a return to health for the economy, but short-term, this is likely to further hinder first time buyers and put further strain on those already paying mortgages. Both of these will slow Spain’s emergence from recession.
On the face of it, Austerity Cuts Halve Spain’s Deficit is very good news indeed. Aside from reduced government spending, revenue rose 10.4 percent, largely due to a higher VAT rate, a tax on goods and services.
However, the article also notes that this increase in revenue “is a one-time boost widely attributed to Spaniards rushing to buy big-ticket items like refrigerators and washing machines before those tax rates rose on July 1.”
It seems that Mr Zapatero’s austerity budget is slowly having the desired effect, but the Spanish public are understandably angry about footing the bill – and may indicate their displeasure at the next elections in 2012.
A poll released Wednesday said that if elections were held now, the conservative Popular Party would win by eight percentage points. The margin of error was three points. Less than 28 percent of those polled said they approve of the prime minister’s performance.
El Pais reported that some lawmakers think that if Zapatero fails to pass a budget, something which has never happened in post-Franco Spain, he could face early elections.
Personally, I believe that for all his faults and his initial reluctance to tackle Spain’s problems swiftly and significantly, Mr Zapatero is now taking effective action to ensure Spain’s future.
It certainly won’t be an easy road to recovery for Spain, but they do seem to (finally) be headed in the right direction. I just hope that Mr Zapatero is given enough latitude and public support to see his plans through to fruition. Any about-face change in policy over the next few years would be a disaster for the country.
Martin Dell, Kyero.com
