The Pain In Spain

I recently nipped down to Spain with my wife to get a Spanish will. During the course of this we went to the local notary, Antonio J. Jimenez Clar, to swear the will, and took with us our lawyer, Jose Ramon Garcia Baladia, who runs the Lex Law Firm in the port of Javea.

We walked into the notary’s offices, which were surprisingly quiet. As we waited for Sr Clar, Jose said that a year ago it would have taken three months’ notice to get an appointment with him, but now, with the collapse of the building boom, he has time on his hands.

For Sale

Se Vende signs are everywhere

The collapse has been astonishingly swift. Since my last visit to Javea a year ago all construction work has stopped except for one restaurant refurbishment in the port. All the other projects have simply been abandoned, including a shopping mall on the southern edge of Javea’s Arenal, and a large urbanizacion on the road to Benitachell. Se Vende and Se Alquiler are everywhere.

Consequently, all the construction workers are jobless, which has led to the unusual sight of Spanish unemployed workers begging at cafes and bars. Previously, the beggars were North Africans but they’ve all gone home. At Diego’s e Julie’s restaurant, business still seemed fairly brisk, but Julie said that was simply because of the Moors and Christians fiesta, which coincided with our visit. She also said that she’d pulled out of a new business project because of the lack of finance. At Azorin, a fish restaurant we know well, the owner asked that we pay by cash rather than by card. Furniture shops, estate agents, kitchen shops, swimming pool contractors and so on have noticeably started to disappear in Javea.

On the national level, graduates are leaving the country for Latin America, or for Germany or the UK. Adult unemployment is running at 25% whilst youth unemployment has reached 50%.

How are the Spanish going to turn this around?

The King foretold Spain's economic collapse

King Juan Carlos warned of the building boom’s likely consequences

I don’t recall the exact date, which was probably five years ago, but I do recall King Juan Carlos warning his fellow Spaniards that the building boom was not only ruining Spain’s coastline, but that it would also end in disaster. He was right on both counts.

In earlier blogs, I’ve written about the economic calamity in Greece, but I don’t think Spain’s problems share the same roots with the Greek ones. The Greek collapse is partly to do with its poor export performance and the general unwillingness of the Greeks to pay their taxes. Spain, on the other hand, has an industrial base with, for example, a strong car manufacturing industry, a good export trade, and a generally honest attitude concerning taxes.

The economic implosion in Spain was mainly due to the building boom, and the subsequent collapse of credit. In this respect, the Spanish situation is much more like the sub-prime mortgage disaster in the United States three years ago than the situation in Greece.

Later, after we had returned from Spain, we borrowed a cottage in the Cotswolds in Kingham, and spent some time wandering round the shops of Chipping Norton, Moreton-in-Marsh and Hereford. I am relieved to be able to report that the antiques shops in this part of the UK are still doing vigorous business, a long way from the troubles in Spain.