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AteMoose

Spain (Madrid) Is Booming

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Just came back from a week in Madrid, bars were packed every night (although I was told it was quite as Wednesday AND Thursday last week as both days were bank holidays, apparently most people don't go into work on the Friday and they have a bank holiday week off and get out of the city). Food and drink is mega cheap, all I heard was how great the Spanish culture is. Talking to people most people have two jobs to make ends, one is cash in hand. Everyone talks about the recession, the % reduction in public sector salaries, not getting 14 pay slips a year (you used to get double pay at Christmas and double pay in the summer) but you now only get paid 13 times a year. There are beggars on the streets I didn't get the feeling there was mass unemployment. I did get the feeling that the people who are unemployed weren't really unemployed, but rather are earning low amounts cash in hand. The minimum wage is 600ish euros a month (which I honestly believe you could live on relatively easily), but there aren't as many struggling people as you expect, if you can get a job in a bar cash in hand aswell or cleaning your sorted.

The view from some Spaniards was the country is lazy, going out drinking and partying is key. Kids/men never get kicked out they live at home for as long as they want, kids can do no wrong, wealth that is passed between generations with no IHT (anymore?). A large chunk of the middle classes appear to be very wealthy, owning whole buildings or 10s of flats/properties which they rent out which means they don't need to work (including a lot of the younger middle class who appear to take take cash for the properties they rent out). Madrid's house prices are still relatively high and show no sign of falling. The black economy is huge, everything by everyone is paid for in cash. The cash in hand money pays for all the partying.

Spains 14 public holidays each year:

http://en.wikipedia....lidays_in_Spain

In summary a lovely trip to an amazing buzzing city, but don't believe the unemployment figures and don't believe the economy is struggling. The economy is there its just tax free. What the country needs is a good slap, it needs high tax on alcohol and eating out it needs higher property tax. But I don't see it coming. Spaniards protect there partying behind the excuse it would destroy tourism and they are right. In summary I can't see a way out for europe, spain will continue to spend and if anyone tries to do anything about it there will be strikes and the threat to leave the euro. The sense of entitlement to party every day of the year and not to pay tax is staggering.

Edited by AteMoose

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Heh. Someone on this forum has mentioned this before, wonder who that is?

But you have to remember that Madrid's economy is totally different to that of southern parts like Andalucia, Murcia etc.

Also May is the big fiesta month in Madrid. Go in August and the place is deserted.

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Yes, i think this has been mentioned on MISH blog amongst others, the large grey/black economy there.

Compared to the UK and US where the 'unemployed' are simply sentenced to a life on disability or become permanent students.

frankly i doubt if the actual % doing productive work in the UK and US is any higher than the PIIGSS.

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.......What the country needs is a good slap, it needs high tax on alcohol and eating out it needs higher property tax. .....

Why would you need a higher tax on eating out? To scare off tourists? One of the things I loved in Barcelona last year you could feed a family of 4 in a lovely pasta bar for 15-20 Euro, and food was great as well. Massive difference to France. So this year we go to Valencia and not to France where we went last 3 years. I've had enough of paying 60 Euro+ for below average food and you have to beg to be served.

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Why would you need a higher tax on eating out? To scare off tourists? One of the things I loved in Barcelona last year you could feed a family of 4 in a lovely pasta bar for 15-20 Euro, and food was great as well. Massive difference to France. So this year we go to Valencia and not to France where we went last 3 years. I've had enough of paying 60 Euro+ for below average food and you have to beg to be served.

To pay back the debts I guess...

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They did increase their IVA sales tax to 21% in the past year. It has had quite a big effect on some big tourist events and festivals this year with cut backs and hindering prospects in the future without price increases.

The middle of Madrid may not appear poor and full of wealth but it is the capital city so not a good barometer. The middle of London bares no relation to many of its grim suburbs or awful towns in Kent or places like Jaywick in Essex, or the many other corners of the country. Taking a train out of Madrid shows some grim suburbs.

Still Spain does have wonderful, clean, continually improving cities all over the country even after the recession (though street and park improvements often cost less than the crap UK councils spend money on), and true their are less signs of obvious poverty than the UK. Though that could be because it doesn't cost a lot to dress well though these days by buying very cheap decent clothing such as shirts and shoes from H&M or the myriad other cheap places, whereas many people in the UK delight in buying awful clothing from sports world. The Spanish are a bit more stylish and would look better even if less in their pockets!

Edited by sf-02

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But you have to remember that Madrid's economy is totally different to that of southern parts like Andalucia, Murcia etc.

Also May is the big fiesta month in Madrid. Go in August and the place is deserted.

Totally agree. It was the same in Bilbao last year - the place was humming and looked prosperous. Lots of families out and about, bars busy but no-one getting hammered and heaving up in the gutters. No wonder that both regions have been wanting to ceceed.and are big net contributors to the economy. I can't really criticise the family centred, low car ownership, cafe lifestyle we saw.

A lot of it had been acheived with European money of course - fantastic transport systems, public facilities and so on. A magnificent but under-utilised airport.

Elsewhere in Spain was a different story - closed shops, graffiti, beggars, generally grey air. We couldn't credit the differnce from 3 years preiously when we were last in the same place.

Edited by Stainless Sam

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Totally agree. It was the same in Bilbao last year - the place was humming and looked prosperous. Lots of families out and about, bars busy but no-one getting hammered and heaving up in the gutters. No wonder that both regions have been wanting to ceceed.and are big net contributors to the economy. I can't really criticise the family centred, low car ownership, cafe lifestyle we saw.

A lot of it had been acheived with European money of course - fantastic transport systems, public facilities and so on. A magnificent but under-utilised airport.

Elsewhere in Spain was a different story - closed shops, graffiti, beggars, generally grey air. We couldn't credit the differnce from 3 years preiously when we were last in the same place.

You could say that about the different places in the UK.....except our transport system is not so fantastic. ;)

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But you have to remember that Madrid's economy is totally different to that of southern parts like Andalucia, Murcia etc.

This. A tourist visiting London and doing the usual tourist circuit will also think the UK is booming, with all those luxury cars driving around central London, bars in Soho and Mayfair that are packed and Oxford street stores busy as ever.

Go to the equivalent of Middlesbrough, Hull or Bradford in Spain and then come back and tell the real story.

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Also remember that places get fully occupied at their fiesta time (early May is Madrid's) with visitors from within Spain and without. All hotel rooms are now fully booked for the San Fermin festival in Pamplona in July - fantastically high prices too. At the same time you'll find many rural hotels struggling due to a fall in demand from the internal economy.

yes the black economy is large (estimated at around 25% of gnp) but there are still people unable to get work. No different to the UK I'd argue, but here you have housing benefit or tax credits that hide the true picture (many folk going self-employed and claiming benefits as there really isn't work).

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You could say that about the different places in the UK.....except our transport system is not so fantastic. ;)

No one getting hammered and heaving up in the gutters??

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Guest eight

Go to the equivalent of Middlesbrough, Hull or Bradford in Spain and then come back and tell the real story.

There is no equivalent of Middlesbrough anywhere in the earthly realm at least.

Was in the Yorkshire Dales yesterday, heaving with wrinklies and bikers (although there is a lot of overlap). Looked like people were chucking it around although to be fair if you wanted to purchase anything you had to flash the cash like an Arab sheik in a Ferrari showroom. We paid the neck end of twenty five quid for three sandwiches and three drinks but it doesn't mean I'm rich - in fact quite the opposite, now! Something else will have to be sacrificed later in the month.

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Worth noting that even during the height of the Weimar hyperinflation, Foreigners visiting the capital Cities of both Germany and Austria reported seeing massive night life, people out enjoying themselves in restaurants and hotels etc - ostensibly a booming social and entertainment scene.

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Worth noting that even during the height of the Weimar hyperinflation, Foreigners visiting the capital Cities of both Germany and Austria reported seeing massive night life, people out enjoying themselves in restaurants and hotels etc - ostensibly a booming social and entertainment scene.

The reality, the money's going to be worth f*** all tomorrow, might as well spend it today.

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From the anecdotals forum: Unemployment Anecdotal From Spain

My mum is retried in Spain and I was chatting on the phone to her last night. When we visited recently we left a nearly full pack of nappies behind - cost about E17. My mum gave them away to some Spanish neighbours seeing hard times who were delighted beyond measure. They have no work or benefits. My mum asked the man of the family what he does and he shrugged and said, 'I steal', before giving her some helpful security advice about her car. Another neighbour, where the family has no income, has moved the grandmother out of a nursing home so they can share the pension out. Absolute devastation, and it appears that removing benefits does not incentivise people to work when there are NO JOBS.

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Timing is all important in Spain. If you go on a public holiday then the bars and restaurants will be heaving

Still, things are nowhere near as bad as they should be given a 27.2% unemployment rate, despite a 5 year month on month reduction in consumer spending

I live in Oviedo, a relatively wealthy Northern town. A decent 3 bed flat here costs 300-500k and that is even with a 30% reduction, they were even more expensive a few years ago

Salaries are pretty low, maybe 2k euros per month average, but people have lots of assets as nobody ever sells anything. So a middle class family may have a house in the village, a flat (or 2 or 3) in the city and a flat/chalet by the beach. As nobody is ever in a rush to sell then effectively there is no property market, you have to pay what the sellers ask or go and live in a cheaper new build on the edge of the city. Familes share everything, kids never get kicked out or pay rent as in the UK, so they may live in the great grandparents flat that is "worth" hundreds of thousands for free. State pensions here are very generous, up to 2.5k per month, and grandparents subsidise their children and grandchildren and normally do most the childcare as well

Things here are a factor of n more prosperous and people much wealthier than in the Northern English town I grew up in, it is incredible. Old ladies walk around in 1000 euro fur coats and the kids are dressed in outfits from the many independent clothes shops costing 100s of euros. After so many years here, I am still trying to work out how the economy works and why people "appear" to be so wealthy

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Like the other southern Mediterranean countries the family is tight knit and each look after their own and work for and provide employment to the people close to them......a nations of small businesses, you don't get so many of the multi national companies like you do here.......people/families are richer in land and property that stays within the same family for generations, they also seem have a better work/life balance, most stores are closed on Sundays and the siesta is still just about holding on. ......also in Spain they are not long out of the Franco era and so are used to a bit of austerity and making do and mending....adapt or die....just my observations. ;)

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Very different place. They won't waste money on repairing cars either. If they collide on a roundabout and wreck it down the side (compulsory it seems)...it'll be that way for the next 20 years (cars don't rust either so full of old wrecks with no rust).

As said above, the country shuts down on Sundays (except for Chinese shops).

If you're young you can also be a drug dealer. Plenty of foreign customers.

Edited by cica

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Very different place. They won't waste money on repairing cars either. If they collide on a roundabout and wreck it down the side (compulsory it seems)...it'll be that way for the next 20 years (cars don't rust either so full of old wrecks with no rust).

.

There is a bit of a North South divide here

Andalucian cars are a disaster, but in the North the cars are immaculate. Although, again, people tend to buy a car new and then drive it for the next 10-15 years and then perhaps give it to a son/daughter or a nephew etc. The second hand car market is por value for money as a result

One difference is you dont see many top of the range flat screen TVs in the houses you visit, even if the family is well off. Plenty in the shops though!

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Just came back from a week in Madrid, bars were packed every night (although I was told it was quite as Wednesday AND Thursday last week as both days were bank holidays, apparently most people don't go into work on the Friday and they have a bank holiday week off and get out of the city). Food and drink is mega cheap, all I heard was how great the Spanish culture is. Talking to people most people have two jobs to make ends, one is cash in hand. Everyone talks about the recession, the % reduction in public sector salaries, not getting 14 pay slips a year (you used to get double pay at Christmas and double pay in the summer) but you now only get paid 13 times a year. There are beggars on the streets I didn't get the feeling there was mass unemployment. I did get the feeling that the people who are unemployed weren't really unemployed, but rather are earning low amounts cash in hand. The minimum wage is 600ish euros a month (which I honestly believe you could live on relatively easily), but there aren't as many struggling people as you expect, if you can get a job in a bar cash in hand aswell or cleaning your sorted.

It's not as buzzing as it used to be and I've seen many bars close down. With fewer bars open those who do go out end up concentrated in the remaining bars that haven't closed. You also have to bear in mind that the weather has only just turned in Madrid and everyone was out. It's a different story in winter. One big difference with Madrid is that it is cheap to go out - I've never paid to get in anywhere apart from the really big nightclubs. And once you're in you can make €10 last a few hours. One of the other diferences with Spain is that you can meet up with someone in a bar and there is no pressure from the barman to have a drink. So you may see many Spanish out and about, but they might not be consuming that much.

The 14 payments thing is a bit misleading. I had it a few years ago. It's not that they give you extra payments but rather your salary is broken down into 14 payments rather than 12. You don't get any more money overall, you just receive it in a different way (double payments in July and December usually)

The view from some Spaniards was the country is lazy, going out drinking and partying is key. Kids/men never get kicked out they live at home for as long as they want, kids can do no wrong, wealth that is passed between generations with no IHT (anymore?). A large chunk of the middle classes appear to be very wealthy, owning whole buildings or 10s of flats/properties which they rent out which means they don't need to work (including a lot of the younger middle class who appear to take take cash for the properties they rent out).

There is a lot of hidden money. In fact I've given up feeling sympathy for most people here - I had a friend in negative equity to the tune of €100k with 3 kids and felt really worried. Last week she told me she got so stressed out by the whole situation that she ended up paying off her mortgage with her "savings" so she could sell her house and move on. this stuff happens all the time - the Spanish don't trust each other when it comes to money (although they are generous) gbecause they think everyone is ripping each other off by not paying taxes. It stems from corruption at govermnment level.

However I must add that many Spanish do work very hard. The problem is that stupid employment laws making it very expensive to sack certain people (and illegal to sack civil servants) so you end up with half the workers working their arses off to support the other lot who do nothing (this might sound eerily familiar, but in fact it's much worse than the UK)

Madrid's house prices are still relatively high and show no sign of falling. The black economy is huge, everything by everyone is paid for in cash. The cash in hand money pays for all the partying.

House prices in Madrid have crashed by at least 40%. The friend I mentioned above bought for about €220k at the peak and has recently had her house valued at €80k. Other areas might not have crashed so much, but they're down. Many Spanish people are in denial about it though. Many have no idea of how a market works and think that by advertising their property at 2006 levels they will eventually get a buyer.

Spains 14 public holidays each year:

http://en.wikipedia....lidays_in_Spain

In summary a lovely trip to an amazing buzzing city, but don't believe the unemployment figures and don't believe the economy is struggling. The economy is there its just tax free. What the country needs is a good slap, it needs high tax on alcohol and eating out it needs higher property tax. But I don't see it coming. Spaniards protect there partying behind the excuse it would destroy tourism and they are right. In summary I can't see a way out for europe, spain will continue to spend and if anyone tries to do anything about it there will be strikes and the threat to leave the euro. The sense of entitlement to party every day of the year and not to pay tax is staggering.

What the country needs is to change employment laws so people who don't work can be laid off and it needs lower business taxes (sole traders currently have to pay over €300/month tax regardless of income). Much of the Spanish state is stil structured around the Franco years, with the attitude that the worker serves the state rather than the other way round. There is a black market but the wages are pitiful. The waiters in those bars you went to might have been paid cash in hand, but the ones I know work 12 hour days, with 1 day off a week, and the money is crap. Property purchase tax is 10% for new builds and 7 or 8% for second hand properties. Higher than the UK. And I repeat, the reason why people are out and about is because it is cheap. Increasing taxes will lower consumption rather than increase tax revenue.

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...

Things here are a factor of n more prosperous and people much wealthier than in the Northern English town I grew up in, it is incredible. Old ladies walk around in 1000 euro fur coats and the kids are dressed in outfits from the many independent clothes shops costing 100s of euros. After so many years here, I am still trying to work out how the economy works and why people "appear" to be so wealthy

Spain is constitutionally structured so that anyone with any connections to local government has been able to write blank cheques. There are stories going round of small villages with a few hundred inhabitants who have managed to build enormous olympic sized leisure centres. Each villager is left with enormous debt but the mayor's mates who were contracted to build it made a fortune. Similar story with all these empty urbansizations in the middle of nowhere. Councils were able to raise debt through corrupt banks and build stuff that was never going to be sold. The banks sold the debt on through securitization, paid themselves handsomely for being so clever, the developer made a fortune, and so did the council from the sale of the land. Of course you'd find the same few people sitting on the board of both the bank, the council and the developer. A massive scam. It worked.

Edited by LiveAndLetBuy

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Spain is constitutionally structured so that anyone with any connections to local government has been able to write blank cheques. There are stories going round of small villages with a few hundred inhabitants who have managed to build enormous olympic sized leisure centres. Each villager is left with enormous debt but the mayor's mates who were contracted to build it made a fortune. Similar story with all these empty urbansizations in the middle of nowhere. Councils were able to raise debt through corrupt banks and build stuff that was never going to be sold. The banks sold the debt on through securitization, paid themselves handsomely for being so clever, the developer made a fortune, and so did the council from the sale of the land. Of course you'd find the same few people sitting on the board of both the bank, the council and the developer. A massive scam. It worked.

Yes that is true, but didnt really happen here in the Asturias and most of the North. It doesnt account for why so many people here seem so well off

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  • 276 Brexit, House prices and Summer 2020

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      • down 5% +
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