SPAIN FINANCES 2011

Quite what the state of Spanish Finance is, is unknown to the general public, particularly the expat community.

It is obvious that the banks do not have any money. Moreover the crippling property market has left buyers reeling and being unable to pursue their purchase because that once available mortgage was no longer there.

Employment levels have dropped despite the unadjusted figures provided. Unemployment has reached 20.8%.

More and more employers are putting employees on part time contracts and the increase in people working on the black economic is more marked.

It is generally accepted that Spain has no money. Hacienda is short to repay monies due and despite the fact that their website states that Capital Gains Refunds will be made within 90 days it fails to do so. In reality it is expect it when you see it.

With the situation prevailing regarding Ireland and its budget deficit and the need to borrow from the EU this raises questions over Spain and Portugal alike. Both have delicate financial situations and notwithstandings Spains Austerity Budget in September there are clearly many anxious faces around.

The reality is all we can do is wait and hope that the situation is not as bad as is anticipated.

The worrying part is what happens if it is and at the moment no one has the answer. There will undoubtedly be further difficulties.

The banks need to work together to create a level playing field. They are not known for their compassion when it comes to mortgage payments, something many expats find hard to understand. However, they do need to realise that there is often the will to pay at a lower level which is often preferable to no payment at all.

Furthermore the cost of repossession is high and with the many properties with no or negative equity repossession is often a way out for an owner. Banks really need to think hard about this. There is no logic in having the number of properties they have with no buyers and they being unable to offer mortgages to buyers. It seems like financial suicide.

The problem is that they have had it so good for so long and have never really had to contemplate the situation as it exists at the moment.

As this blog is written we know that times may still change and there is a glimmer of hope the trouble is it is out of our hands and in those of the politicians, maybe they will think in view of the impending elections about the effect of their actions.

Costa Blanca Lawyers will keep you updated as events unfold but if anyone does need advice then please contact us via http://www.costablancalawyers.com