Analysis to the Financial Times essay
Last 24th of June, Financial Times magazine published an article about us -about Spain- that deserves to be analyzed here, and now. And with no other intention that response with the same language in order to imply to our neighbors that indeed there exist Spanish people (or Catalan…) knowing English, I would like to expose my unassuming opinion about what is on the cards- and what is hashed-.
The article is called “Investing in Spain”, just an appropriate title taking into account his contents. The FT focuses his attention in some issues, all in relation with one common denomination, TRUST: crisis of trust in the national institutions (enrolling politicians, parties and of course King Juan Carlos and his current abdication), banking bounce, the property market and his buyers and sellers, jobs and investment in companies and hedge funds.
The first point addressed could not have been one better than the Catalonia challenge (perhaps they share the same worries with our State, bearing in mind the hot and current issue with Scotland). It is widely known that Catalonia wishes the independence from Spain, caused by the swelling disaffection with the central state because of the strong nationalist feeling arranged among Catalan citizens. The discussion and problem in this sense is not the citizens but the shortage of dialogue and care between our political representatives. Artur Mas, president of Catalonia, has called for an independence referendum, albeit non-binding, for November 9, and Mariano Rajoy (the current president of Spain but not for long) insists in that such a plebiscite is illegal, and he has the support of the Spanish parliament and constitutional court behind him. Most analysts agree that a Catalan climb-down is not on the cards: if Madrid blocks the referendum, Mr. Mas is expected to call an early election, in the hope that Catalans will give overwhelming to regional political parties that support independence. Certainly it is illegal to call for an independence referendum because it is necessary to change and modify the Constitutional Law. But indeed it is true, from my point of view, that calling for a referendum is not such a bad idea at all whereas Catalan citizens would be happy to join a referendum to express their feelings and opinion (freedom of expressionanyhow), and we will see the final results, consequences that in my opinion, will show up what actually people desire (I feel a no). So, I agree with the referendum execution considering that the assumption in Madrid is that, sooner or later, the economic risks associates with independence will derive a wedge between mainstream Catalan society and the secessionist movement.
The second topic, a tough one -and connected with the prior-, handle the monarchy’s crisis. This is the best way the Kingdom of Spain has to contradict himself when it has been affirming and reaffirming the recovery of our economy since one year ago. Certainly the depth of the institutional crisis became starkly apparent on June 2, when King Juan Carlos stunned the country by announcing his abdication in favor of his son, Felipe VI. His decision is founded on a number of public factors (health, years…) and another kind of no publics factors –but indeed everyone know- as could be the public missteps by royal family members. King Juan Carlos has lived the period of glory and brightness of the monarchy after he was “the salvation” after Franco’s dictatorship. But, let’s be honest, the monarchy business, like everything, has an expiry date that will arrive in a near future. And King Juan Carlos knows it, and how it is literally said in Spain “retreat in time” is the best choice he would has never done (after apologize himself for the elephants’ hunting). Now his son –relied on his wife- will have to handle with the Kingdom of Spain (and the citizens).
After these negative features of our institutional government, the Financial Times article continues softening his tone and it fondly remember our job’s context. Who has already not realized Spain hold a big unemployed rate? But the point here is again an institutional problem. Mariano Rajoy assured time ago that employment would be created months ago, and where it has been created? Al least (for now) not in Spain. But sincerely, it is not necessary to be so clever to keep in mind that this never could have been possible. Then the problem lives inside people, those people who indeed believe in their politicians. A believe not possible anymore nowadays. From my point of view, the Financial Time’s essay is so optimistic with the job issue saying we can be pretty certain the recovery has started, considering the unemployment rate has rose 29,9% over the latest quarter, and a 55% of workers under the age of 25 out of work. In accordance with other labour market expert, however, I warn that it will take many years for Spain crisis-scarred labour market to recover fully and that many unemployed people face the risk of permanent exclusion. The quality of jobs is another issue better not to get into now, just a comment: a bird in the hand is worth than two in the bush.
Our crisis started with the economic one, but now, when Spaniards speak about “the crisis”, no longer clear which crisis they are referring to. How it is said, until recently it was obvious that la crisis could only mean the brutal economic downturn triggered by the bursting of Spain’s housing bubble six years ago. Today, however, the word may just as easily refer to the deepening political and institutional crisis that has engulfed the country, how I’ve told prior.
The “good” news in this report comes with the property market and the bank investments, the best part for me. I said well because the Financial Times draws a perfect brightness context in these sectors at the moment, but certainly I’m not sure how we have to swallow, if positive or ironic.
It is true that is exists a good opportunity to buy, especially for foreign companies –who actually has ready cash- because since years ago, property’s prices have dropped, turning into a bargain for those companies. But is also true that those companies take advantages of our current situation and although there are low prices, they haggle until cost prices. The residential market is more complicated. There are two residential markets in Spain: a healthy market for foreigners who pay cash for primer properties; and a difficult market for locals who cannot get mortgages.
On the other hand let’s comment the financial situation. The essay only refers literally “A London-based hedge fund investor says: many people were looking for value in Spain, because if Europe was cheap in comparison with the US, Spain was very cheap. As public finances have shown signs of stabilizing and the risk of Eurozone break up has faded, many managers fear of touching Spanish assets has passed. This has allowed reassessment of the values that many companies were trading at compared with other locations such is US.
Nothing is said about the bank’s behavior with the costumers, the real citizens –and who actually have been damaged. What about the famous floor clause in mortgages? And who is familiarized with Swaps? Still more significant is the Complaint sent by the important Spanish legal firm Navas Cusi to Brussels, suing the Kingdom of Spain for the abusive and illegal behavior that Spanish financial body had with half country. Unquestionably it was this abusive behavior that triggered the economic crisis 6 years ago- and the consequences analyzed previously-, and Europe must take matters on his own hands because Spain has an amount due to his citizens.
Vía| The Financial Times
El Rincón legal de Anna Artalejo 