The sun, sea and sand of the Spanish coast have been a significant enticement to British expats in recent years. According to the Spanish institute for national statistics (INE) between 2007-2009 26,130 Brits have made the move. A strong Pound to the Euro has been a major factor in making Spain an attractive alternative to living in the UK. In particular Britain`s O.A.P`s have flocked in their numbers; the exchange rate having increased the spending power of retirement savings and pension funds as compared to those choosing to remain in the UK. Many businessmen and women have also moved to areas such as Costa Blanca where small businesses providing a taste of home such as British style pubs or fish and chip shops prove popular among the British expat community.

For those who have bought a home in Spain the news is even worse. Spanish house prices have been falling year on year according to the Spanish institute for national statistics (INE); in 2008 the house price index (HPI) was down 1.5 per cent on 2007 and in 2009 the HPI was down 6.7 on 2008. Many expats are trying to sell their Spanish homes in exchange for something back in the UK, but falling house prices in Spain has meant that many simply cannot afford too. A BBC source said that in some areas house prices were down `more than 20 per cent in the last year`.

With national debt at 11.1 per cent of GDP in 2009 and a GDP growth rate of 0 per cent in the third quarter of 2010, confidence in the Spanish economy is dwindling. It is proving hard to reinvigorate Spain`s tourist industry in these times of austerity. What Spain needs in addition to cheap flights is more investment from overseas businesses, such as those set up by British expats. But, the global economic climate is a significant disincentive to budding entrepreneurs. It is also proving harder for those who have already set up shop; according to the Spanish institute for national statistics (INE) in 2007 there were 10,620 Britain`s who emigrated to Spain, however in 2009 the number was down significantly to 7,584. With many moving back to the UK and less tempted to move to Spain due to financial risk businesses are finding it hard to make ends meet.

Luckily today’s ruling wont effect UK pensioners living here in Spain as agreements are in place to ensure that State pensions that are paid to expats in Spain rise in line with inflation each year.

The expatriate pensioners say they have been fighting “tooth and nail” against the UK government in an eight-year court battle.

Pensioners who have moved abroad want their UK state pensions to rise in line with inflation each year.

Inflation-proofing only applies to UK pensioners who live in the European Economic Area or in 15 other countries, but not in some Commonwealth states.

Entitlement

John Markham, a pensioner living in Canada, said: “There is an image of people living well in the sunshine – but there are plenty of cases of real hardship.”

The applicants did not contribute to the UK economy, in particular, they paid no UK tax to offset the cost of any increase in the pension

European Court of Human Rights

He said the decision was the end of the legal road, but they wanted to take the case to the “court of public opinion”.

He told the BBC News website that they would take 48 hours to consider the decision.

The campaigners argue that they paid into the pensions system when they were working and are entitled to the same benefits as those who remained in the UK.

For the oldest overseas pensioners, who retired in the early 1970s, the pension can be as low as £6 a week.

Those who retired in the early 1980s are left on about £30 a week, and those who retired in the early 1990s get about £50 a week.

The current basic state pension is £95.25 a week.

‘First priority’

There are more than a million UK pensioners living overseas – with about half of them affected by the pensions freeze.

South Africa resident Annette Carson was among those who started the case

If pensioners have moved to countries with a reciprocal arrangement – such as in the European Union or the United States – then they receive pension increases.

But if pensioners have emigrated to countries without any such agreement – such as Australia, Canada and South Africa – their pensions have been frozen at the level of when they moved overseas.

The Department for Work and Pensions welcomed the ruling and said the department’s first responsibility was to support pensioners in the UK.

“We note that the court has found in favour of the government. We do not therefore plan to make any changes to the current arrangements, which allow for the exportability and up rating of UK state pensions,” a department spokesman said.

“We will, nonetheless, study the terms of the judgment carefully to ensure that we continue to comply with our obligations under the terms of the European Convention on Human Rights.”

The department has said that pensioners who chose to move to a country without a reciprocal pensions arrangement would have been aware of what it would mean for their state pension.

Link

The case has seen a series of courts reject the arguments of pensioners including Annette Carson, who moved to South Africa in 1990.

After emigrating, she continued to make full contributions to her UK state pension and, on retirement in 2000, began to receive pension payments. But since then, the UK authorities have frozen the level of payments at £67.50 a week.

Judges at the European Court of Human Rights were the latest to declare that National Insurance contributions did not have an “exclusive link” to retirement pensions.

“As non-residents, the applicants did not contribute to the UK economy, in particular, they paid no UK tax to offset the cost of any increase in the pension,” a statement from the court said.

The court said that it was hard to draw any genuine comparison with the position of pensioners living elsewhere.

The European Court of Human Rights rejected an appeal from a group of pensioners by an 11 to 6 majority.

Via BBC

Despite recent reports that Spain itself was feeling “bullish” about the recession, it seems that expats living in Spain would do well to not get their hopes up and to continue to expect the recession to continue well into 2010.

The Spanish economy is struggling to catch up with the European monetary union.

On the same day as the UK announced that it has formely exited the recession, the International Monetary Fund (IMF) have confirmed what many have been saying, that Spain will remain in recession throughout 2010, with low growth forecast for 2011.

To put this into context the Eurozone is forecast to grow at 1% and the world economy by just under 4%

Good news for people with qualifying accounts that plan to travel to Spain, or live in Spain on a part-time basis as they will be able to take money out of any of Santander’s cash machines without incurring any foreign transaction fees.

People with accounts or mortgages with Santander or Alliance & Leicester can now also apply for the Zero Credit Card, offering no interest on balance transfers for the first year and zero interest on any purchases made with it in the first three months.

Emma Roberts, director of Santander Cards, commented: “By offering the Zero Credit Card with no balance transfer fee to our existing mortgage and current account customers we are providing customers with a completely unique proposition within the market.”

The Spanish Government’s recent plan to extend the smoking ban to bars and public spaces has been opposed by the Spanish catering industry because of the economic consequences it might have on the industry which is already suffering from financial turmoil.

President of the Federacion Espanola de Hosteleria (FEHR), Jose Maria Rubio, said that the ban will lead to closure of several businesses, job losses and economic losses. FEHR, taking the example of Ireland, where almost a quarter of bars were closed as a result of smoking ban between 2004 and 2008, proposed that about 70,000 of Spain’s 360,000 bars might have to close down as a result of this ban causing one-sixth or 200,000 people serving the catering industry to lose their job.

According to the government, about 8.3 percent of people die because of lung cancer making smoking the biggest killer in Spain and the new ban would bring Spain in line with other European countries like Ireland, Britain, France and Italy.

Original Source – Spanish News

A report issued by the Almeria Farmers Association (COAG) together with consumer associations UCE and CEACCU confirms that in 2009 the price difference between what farmers sold produce for and the price consumers had to pay had increased six-fold. Especially in produce grown in Almeria green houses such as courgettes, aubergines, cucumbers, peppers, tomatoes, melons and watermelons.

The price of Almeria produce has increased by an average of 620 per cent while in the rest of the country the increase is of 490 per cent.

The most expensive products where melon and watermelon with a 753 to 740 percent increase which COAG deems “scandalous”

Over the spring season last year some products saw a difference of a record-breaking 1,800 per cent increase from what farmers received for products and what consumers had to pay for them. This matter is being denounced by farmers and consumer associations whom ask for the situation to be regulated, once and for all.

Original Source – Euro Weekly

The European Central Bank (ECB) has kept eurozone interest rates on hold at a record low of 1% for the eighth month in a row.

The decision was widely expected by economists, with Europe still recovering from recession.

But it follows positive data on the eurozone, with industrial production found to be growing twice as quickly as expected.

Interest rates have been at 1% since May last year.

Greece fears

Economists argue that rates are unlikely to increase while eurozone inflation remains well below the ECB’s target of 2%.

There are also questions over the state of Europe’s economic recovery, with the state of Greece’s public fianances a particular concern.

Last year, Greece admitted that its budget deficit was expected to reach 12.5% of GDP, attracting the condemnation of the European Union.

The eurozone prohibits budget deficits of more than 3% of GDP.

Original Source – BBC

The worst British recession in almost 90 years came to end in the final three months of 2009 with economic growth of 0.3pc, a think tank has estimated.

The National Institute of Economic and Social Research (NIESR) data showed a 4.8pc fall in gross domestic product (GDP) for 2009, Britain’s biggest contraction since 1921.

Describing the downturn as a “depression”, NIESR said that output fell sharply for 12 months until March 2009, “and has not changed very much since then, although evidence of a recovery is starting to emerge.”

NIESR’s GDP figures include an assumption that industry output grew by 0.5pc during October to December.

If NIESR is correct and the economy did start growing again in the fourth quarter it would mark the first rise in GDP in six quarters, since the first three months of 2008.

Official confirmation of whether or not the UK emerged from recession at the end of last year will come on January 26, when the Office for National Statistics publishes fourth quarter GDP data.

On a monthly basis, NIESR said the economy grew by 0.5pc in December.

Martin Weale, director of NIESR, said the outlook for growth during the early part of 2010 was not as good: “There is a worry that the first quarter may be weaker, following the VAT rise in January.”

Original Source – Telegraph

Spanish giant Santander has stepped up the high street banking revolution by kicking off the rebranding of its Abbey and Bradford & Bingley branches.

Around 300 branches in London and the South East will be the first to undergo the name change, with another 700 outlets across the rest of Britain getting the treatment within the next three weeks.

The Spanish bank, which bought Abbey in 2004 and added B&B and Alliance & Leicester to its portfolio in 2008, will carry out a similar exercise on its 300 A&L branches in the autumn.

Abbey and B&B customers will be able to carry out transactions in any Santander branch, regardless of which group they formerly belonged to.

They can continue to use their Abbey and B&B cheques and credit cards, although these will be changed to Santander when they come up for renewal.

Santander now has 25 million UK customers, and is actively seeking to grow its share of the current account and mortgage markets.

It is marking the start of its rebranding exercise with the launch of its fee-free Zero account, which is available to mortgage customers only, while Abbey and B&B current account customers will henceforth be able to make free cash withdrawals from Santander ATMs in Spain.

Alison Brittain, Santander’s executive director of UK retail banking, told Sky News a shake-up in the banking sector was long overdue.

“This of course gives us massive efficiencies but the most important element is how good this will be for UK high street and for competition in the financial services industry,” she said.

“Santander is both a very safe and secure organisation as a global bank and a challenger to the established names on the high street.”

Ms Brittain said she had sympathy for those who would miss the historic British names, but pointed out that the 150-year-old Spanish bank has already enjoyed five years operating in the UK as Abbey.

Kevin Mountford, head of banking at moneysupermarket.com, said: “Santander will be keen to maintain and grow their position as a major player in UK retail banking and they are challenging their rivals by offering competitive rates and unique deals to their customers.”

Original Source – Sky News