Spain's Housing Crisis Deepens

This interesting N.Y. Times video explains why the markets cannot afford to let Spain, the world's 12th largest economy, follow the same path as Greece.

Unlike the U.S. housing bubble, which was dominated by creditory subprime lending, in Spain it was more the enthusiasm of buyers from across Europe who were attracted to second-home properties, that fed the real estate boom. As a result of this massive overbuilt sector, banks are now so heavily exposed to real estate, real estate services and construction that almost 40% of all their bad loans are from this sector.

Unfortunately, according to Gretchen Morgenson, Spain lacks the policy tools to resolve this massive housing crisis because it is in the Eurozone and cannot monetize its debt as the U.S. was able to do.

Leaving the Euro would not be a solution to these problems for an economy the size of Spain. The domino effect would be inevitable, Italy being the first to suffer its effects.

Watch the N.Y. Times video: http://nyti.ms/LpeVgN

Luar na Lubre: Camiño de Caión

Luar na Lubre, one of Galicia's best-known folk music bands has just released its new album "Mar maior", which includes the song "Camiño de Caión" (on the way to Caión).

Today the group performed the song live on the Spanish Public Radio Station (Radio Nacional de España) on the show "En días como hoy"

You can find the song lyrics on Luar na Lubre's website: http://www.luarnalubre.com/letras_disco.php?cat=226&id=180&idioma=es

The EU requests that Spain remove tax breaks for home buyers

It's one of lime and one of sand for Spain's current real estate market scenario.

On a negative note, we find the European Union's harsh criticism of Spain's fiscal policy, especially regarding tax deductions for home-buyers.
We should soon witness to what extent the possibility of a Spanish bailout — which still clouds Europe's skies — or the inevitable recapitalization of Spain's banks, mark government policy regarding tax exemptions for home buyers, a likely rise in the VAT rate or a further adjustment in housing prices. With this outlook, Europe's request may soon become Europe's demand.

On a more positive note for mortgage payers is the decrease of the Euribor rate in the month of May. As you can see the good news fits into just one, short sentence.

For the full story (in Spanish):

bruselas pide a españa retirar las desgravaciones por compra de vivienda (idealista.com)

Un alivio de 730 euros para los hipotecados (ventadepisos.com)

Breathtaking Galicia

You live there. You work there. You see some of those places every day. Yet sometimes it's only when those sites are photographed or shot  in such a spectacular way that you realize just how beautiful your country, region, city or village really is. Enjoy Televisión de Galicia's (TVG) promotional video, which you can also view on the website of CIRCOM (European Association of Regional Television).

Foreign investment in Spain's struggling economy

The Galician government has just announced that the Chinese company Beijing 3E is contemplating a €270 m. investment in an oil recycling facility in A Coruña's outer harbour "Punta Langosteira" (located near Caión). The company has agreed to conduct studies on the feasibility of building the plant in Punta Langosteira, the provincial capital's outer harbor. Reactions were not long in coming. As soon as the news was out the provincial capital’s mayor, Carlos Negreira, said the agreement was “…the white hope for the Galician job market.”

Read more: http://technorati.com/business/article/hope-for-spains-struggling-economy/#ixzz1w8xtai5U

This news follows yet another optimistic announcement regarding a contract that was signed earlier this week between the Galician government and Pemex —the world’s 4th largest oil company —for the building of 14 tug boats. 

Read more: http://technorati.com/business/article/hope-for-spains-struggling-economy/#ixzz1w8tt79Qc

As the Spanish press shows, not everyone is in such happy spirits:

El País

Feijóo pide perdón a Pemex por las dudas de la oposición

europapress
Unha empresa china estuda invertir 270 millóns en Punta Langosteira

With the prospect of these major companies investing in the area, I see the land we're selling--and the apartment--as an even better real estate investment. Think about it. Should you let these opportunities slip you by?

Nice news for Spanish real estate. It seems that Spain still tops the list for British citizens wanting to invest in a second home. Let's hope it stays that way.Click here to read more on PropertyWire.com

Simiocracia (de Aleix Saló)

Book-trailer for "Simiocracia, Crónica de la Gran Resaca Económica", published by DeBolsillo. This is part of a series of videos and comics that explore the causes of the current financial crisis in Spain. More information at http://www.aleixsalo.com