Archive for Spanish Banks

To Beat Austerity Measures, Pay Your Taxes

Posted in Benefits, Budget Cuts, Europe, Government Spending, Spain with tags , , , , , on 22/02/2013 by floroy1942

The people in both Spain and Greece have made it known they are fed up with their governments austerity measures, but in part, they are the ones making them necessary. The number of tax dodgers is rising day by day, and that fact alone means governments are not getting the money they need to get the economy back on its feet.

More People Want Cash Transactions

More People Want Cash Transactions

I can talk from personal experience here in Spain, because when someone does something for you here they invariably ask for cash instead of a card payment or bank transfer. Why? Because a cash payment does not go through the bank and is therefore not recorded, hence they do not have to pay tax on it. Even some shops will only take cash now as the economic squeeze bites. Many big businesses are not paying the level of taxation they should, and this too is hurting the economy.

Falling House Prices In Spain

Building Boom Collapse

The government is hemorrhaging money to keep the economy afloat and the ever-increasing number of tax dodgers only makes the situation worse.  Both the Spanish and Greek governments are struggling to pay social security and unemployment benefit to those who need it, and the number of unemployed is rising daily, which only increases the load.

With prices rising, pensions and benefits being cut, people are looking for any way possible to make ends meet and the most obvious is to avoid paying taxes. It is a cycle for destruction of the entire economy and both countries are heading into the abyss.

A Comparison Of Tax Evasion By Country

A Comparison Of Tax Evasion By Country

The Greeks have always avoided paying the proper level of taxes on a massive scale, and that is the main reason for the breakdown of their economy in the first place. Spain is now going down the same road. I do not blame just the people, for the governments of both countries need to get their spending priorities right and make the paying of taxes fair across the whole population.

The Greek Rich Are Moving Their Money Overseas

The Greek Rich Are Moving Their Money Overseas

Many super rich in Greece have not paid taxes for decades because they were bringing investment and money into the country, and the ordinary people had to carry the load, although most of them avoided paying their full share through corrupt tax officials. In the last few years the rich have been moving their capital out of the country to off-shore accounts to avoid heavy tax bills. Many of them have so much money they could probably settle the Greek debt on their own. It’s the old story; if you are rich you can easily move your money around, unlike the man in the street.

Unfinished Apartments Due To The Building Trade Collapse

Unfinished Apartments Due To The Building Trade Collapse

The big problem with Spain, unlike Greece, is that the catalyst for this current debacle was that everyone put ‘all their eggs in one basket’, i.e. the building industry. The collapse of the banks, coupled with the massive fall in property prices and the related stagnation of the building trade put Spain on the road to economic collapse.

Keeping Out The Stench Of Corruption

Keeping Out The Stench Of Corruption

Corruption has also cost the economy dear with just about anyone in a responsible position taking bribes and in some cases, skimming money. The April 7 2006 arrest of practically the entire local council of Marbella on corruption charges is a prime example. Recent allegations of corruption have even been made by the press against the current Spanish Prime Minister, Mariano Rahoy and his Party, although it is not for me to speculate on whether they are true or not. Since that time Rahoy has stated that he will crack down on corrupt practices in both national and local government, but that is hard to do when most people are at it. I wish him luck.

Roy.

Why A Spanish Banking Crisis?

Posted in Europe, Government, Insanity, Modern World, Spain with tags , , , , on 18/06/2012 by floroy1942

More than enough people have been asking why and how the Spanish banks got in to such a state that they needed another bailout. Well, I can tell you from personal experience that one of the reasons is massive inefficiency.

My wife and I had cause to go to the S……… bank in Marbella to send money to a friend in Romania, and I was appalled at the sheer inefficiency of the service. If you wish to send money outside the country to someone who does not have a bank account of their own, you can only do it from certain banks, and then only if you have an account with them. In our town the only one that would do it without us having an account is the one ‘mentioned’.

We regularly send money to Romania, but to do it I have to show my passport and give them the special code of the place where the money is to be sent, one of the most popular being a Western Union office. A couple of years ago my details were entered into the banks computer and we made the transfer. Last year I had to renew my passport, but instead of just being able to update my information I found they had deleted it all. So with the new passport I had to start from scratch, meaning we had the approval process of one month to go through again. More time wasted. This finally worked for a short time, but when we went back last month they couldn’t find me in their computer again.

We were told that once they had sorted out the problem they would give me a call and we could make the transfer. Guess what? After a month we still didn’t get a call (surprise! surprise!). So off we trotted to the bank again to find out what the hell was going on. After waiting a considerable time, we got to talk to the lady who took another fifteen minutes to find my data, check my documents again and finally fill in the transfer form.

By this time a queue of at least twenty-five people had built up behind us at the cash desk, but we were told we would have to wait in line. If the service had been even adequate, she could have taken the money and we would have been out of there. Instead we spent another thirty-five minutes waiting in the cashier line. There were three positions but only two were manned and the cashiers themselves seemed to know only two speeds, dead slow and stop!  Finally a young man opened up the third desk and things moved to just above a snail’s pace.

To cut this short, it was a very frustrating hour and fifteen minutes waiting around at the whim of a bank that doesn’t have a clue on what the word efficiency means. The money clutched in my hot sweaty little hand waiting to be sent was my money, and on top of that I had the €3 admin fee in my hand as well, so if I am taking my money into the bank, paying their expenses for doing the transfer, why am I given so much hassle???  With most banks, why can I only do if I have an account with them?

I am sure that most people will not believe this but it is a verifiable fact that Spain has 109 different banks, only 9 of which are inter/national. This means that there are 100 regional and spanish city banks. The UK for example has only 9 banks, while France has 24, and these figures include regional banks that come under the main banking groups.

In Spain however, the 109 are independent banks all trying to make money from the Spanish people. Personally I fail to see how such a system has developed, because it seems that apart from the regional banks, cities like Seville, Malaga and San Sebastian all have their own local banks, but it goes down to town level too. To a foreigner it is without doubt a chaotic system especially when you consider that many of the smaller banks do not provide a full banking service at all.

One thing we all need to remember is that the Spanish way of doing things is to say the least, chaotic. The banks in Spain cry about their ‘toxic debts’ and cite that as the reason for the banking crisis. True, there is a massive slump in house purchases and many economic problems over the last three years, but their attitude to solving them is crazy to say the least.

Families who bought property during the ‘good old years’ are being thrown out on the street because they can no longer keep up with their mortgage payments. When this happens the house is repossessed by the banks and is added to the massive number of houses that cannot be sold (currently estimated at 215,000) because no-one can afford them. Surely it makes more sense for these people to stay put and pay off their mortgage at a reduced rate until things get better. In this way at least the banks would have some form of income from their holdings instead of the property standing empty with no-one wanting to buy, and thereby generating no income whatsoever. In our area alone there are places that have been repossessed and are still waiting to be sold after three years. 

There is no doubt in anyone’s mind that Spain is sinking deeper and deeper into crisis and how they are going to extract themselves is still a mystery. It will not change until someone in the government decides that the lazy individuals in the country need to get up off their asses and start working efficiently. Government, local council offices and the law all need a swift kick up the backside and some rapid instruction on how to do things in an efficient and cost-effective manner. Otherwise, I see more dark clouds on the horizon. Don’t get me wrong, this is a great country and most of the people are great, but the leadership and know-how needs to come from the top. For decades this has not been happening because most of those in charge are too busy lining their own pockets. Come on Spain – Get off your backside and start marching forward!

Roy.

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