Murcia Seeks Emergency Loans

The Spanish region of Murcia became the third to say it will need emergency loans, and Valencia signaled it needs funds to cover current and past overspending, adding fiscal pressure on Prime Minister Rajoy.

A day after Catalonia said it needed 5 billion euros ($6.3 billion) from an 18 billion-euro bailout fund announced by Rajoy last month, an official in southeastern Murcia yesterday put its needs at 700 million euros. In Valencia, an official who asked not to be named in line with policy confirmed remarks by economy chief Maximo Buch to Europa Press that 3.5 billion euros would cover only current needs. 

   

A worried man ??

 Rajoy meets in Madrid today with French President Francois Hollande as he considers seeking a second European bailout after securing up to 100 billion euros ($125 billion) in loans for banks. The country’s regions risk overwhelming a plan to tackle the euro area’s  third biggest budget deficit. They were responsible last year for most of Spain's overspending, which remained nearly unchanged from 2010 at 8.9 percent of gross domestic product.Together with Murcia, Valencia and Catalonia, Spain’s two most indebted regions, aim to use more than half of Rajoy’s last bailout fund, created to enable regions to face bond redemptions and finance their deficits in the second half.

“Everything depends on Andalusia now,” said Juan Rubio- Ramirez, an University economist in Durham, North Carolina. “If Andalusia asks for aid, it could be a similar amount to Catalonia and that means the fund may not be enough.” Rubio-Ramirez co-authored a report this month forecasting the regions may run deficits as high as 4 percent of GDP this year, compared with 3.3 percent last year and a target of 1.5 percent for 2012.

Andalusia, one of the four largest contributors to Spain’s GDP along with Madrid, Catalonia and Valencia, doesn’t rule out making a request, a local official who declined to be identified said by telephone. Along with Castilla-La Mancha, Andalusia, Valencia and Catalonia in June tapped 68 percent of the 17.7 billion euros of loans set up by the government for the regions to settle their backlog of unpaid bills.

The four also used over two-thirds of another mechanism that prevented regional defaults in the first half, an approximately 5 billion-euro credit line from the Spanish government’s bank Instituto de Credito Oficial, or ICO. The region with the highest deficit last year, Castilla-La Mancha, hasn’t yet decided whether to tap the new fund.

Rajoy has said he’ll decide whether to request more aid after the European Central Bank details its involvement in a bond-buying plan aimed at lowering governments’ borrowing costs. Van Rompuy this week said European authorities are ready to assist. 

Economy Minister Luis de Guindos yesterday said a European mechanism to lower spreads would be thrashed out at a meeting between EU finance chiefs in Cyprus Sept. 14-15. The yield on Spain’s 10-year benchmark bond yesterday fell 2 basis points to 6.46 percent, narrowing the gap with similar German maturities to 5.08 percentage points. 

The government has budgeted for Catalonia’s needs, de Guindos told reporters in Madrid. “The government appreciates Catalonia’s efforts and has no doubt that it will continue to do what is necessary to meet this year’s and next year’s deficit targets.”

Catalonia may not be able to pay bills until it receives aid, news agency Efe reported, citing spokesman Francesc Holms. With their debt rated junk by at least one rating company, Valencia and Catalonia started losing access to capital markets in 2010, prompting them to rely on selling securities known as patriot bonds to their residents.

The regions have a combined debt load of 145 billion euros, which has doubled since 2008 to the equivalent of 14 percent of gross domestic product. Redemption's will amount to about 15 billion euros in the second half of this year, according to data from the Budget Ministry.

Economic Crisis impacts on Spanish Culture

Sad but I guess inevitable to read the comments below by the Murcia Culture minister Pedro Alberto Cruz on the economic crisis and how heavily it has impacted upon on the cultural activities in Murcia and beyond.

Spain’s economic crisis has reduced its once flourishing culture scene to a shadow of its former self.  "In no other developed country has culture been hit by the crisis as heavily as in Spain,” says Pedro Alberto Cruz, culture and tourism minister of the southern Murcia region.

The region, with 1.5 million residents, has seen its culture budget slashed from 148 million euros (178 million dollars) in 2008 to only 42 million euros. “The situation is similar” in Spain’s other 16 semi-autonomous regions, Cruz reported recently.  Museums run by the Murcia regional government remain open, but for instance the Conservera contemporary arts center has halved its number of exhibitions.

La Conservera Arts Centre in Murcia

There are no more opera performances in the regional auditorium. Many actors and musicians performing at theaters get no payment other than a part of the ticket revenues. “Big Spanish museums will survive. But everyday culture — theatre and dance companies, writers — is on the verge of disappearing,” Cruz said.

Not only are Spaniards spending less on culture in the country where a quarter of the workforce is unemployed. The central and regional governments have also axed culture budgets, prompting artists to stage unusual street rallies.  “Culture is not a luxury, it is a public good. Cuts in culture (budgets) produce citizens who are unable to think,” actor Juan Diego Botto said.

Before the economic crisis, the culture sector employed more than 600,000 people and contributed 4 per cent of Spain’s gross domestic product. Prime Minister Mariano Rajoy’s conservative government eliminated the culture ministry as an independent entity and integrated it into the education ministry as part of its attempts to cut the 8.9-per-cent budget deficit.

The government also cut spending on culture by 15 per cent this year. From September onwards, value added tax on cinema, theatre or concert tickets will go up from 8 to 21 per cent — one of the highest levels in Europe. The measure will reduce audiences by 43 million people and kill 4,300 jobs, an association of culture entrepreneurs warned.

Spain’s once showcase movie industry has already suffered heavily from subsidy cuts and from internet piracy. Cinema audiences dropped from 144 million people in 2004 to 98 million in 2011. The country that gave birth to the likes of actress Penelope Cruz or director Pedro Almodovar sees its production figures tumbling.

Bookshops and art galleries are also languishing. “My paintings used to sell for thousands of euros, but now my gallery is only offering me 800 euros for them,” says a Madrid painter with a long career.  The crisis has even hit giants such as Madrid’s Prado art museum, home to masterpieces by Francisco de Goya or Diego Velazquez. Such top museums, however, can rely on income from entrance fees, souvenir and catalogue sales. The Prado has amplified its opening hours and plans to seek more sponsors.

Smaller venues and individual artists are also increasingly relying on private money. Murcia, for instance, has adopted the model known as "crowd-funding", initially developed by artists seeking small contributions on the internet. Companies can get the status of official sponsors by contributing at least 500 euros to cultural institutions or projects, Cruz explained. More than 100 companies have already joined in.

The Spanish culture scene is surviving through “efforts and imagination,” Cruz said. Some theatres, for instance, survive by renting out rehearsal rooms or by giving acting classes. Bookshops open cafeterias. Some cultural venues have taken bank loans.

The Spanish culture scene has depended too much on state subsidies, leaving it excessively vulnerable to the economic crisis, Cruz argues. “We want more sponsoring agreements and less of a subsidized culture,” said Jose Ignacio Wert, the minister responsible for culture, education and sports

Presidential Coup at Condado

The political machinations over Mileniun and the level 1 presidency continued over the weekend...

I received a request dated 14th August calling the Level 2 presidents to an EGM on the 17th to remove Mr Phillip Tann as the incumbent Level 1 president.

Its worth backtracking slightly at this point to clarify the presidential "structure" of the resort...

• There are 46 Presidents within the community
• These 46 elect 5 Presidents at Level 2
• The 5 presidents at level 2 elect the Level 1 President

Each Level has its own responsibilities and function with the resort , the Level 3 presidents are required to approve minor expenditure and repairs to their individual gardens / block area. The level 2 presidents are responsible for the facilities, street lights, cleaning etc. The level 1 president covers off security and the day to day strategy and financial administration.


This EGM request by Mileniun was in direct violation of the agreed constitution of the resort as specified under Article 21. To call a such an EGM with 24 hours of the request is not legal

If you were being exceptionally cynical, you would possibly surmise that this EGM had been called at a time to ensure that certain presidents concerned would be absent from the resort ??

The level 1 president responded to the request and agreed to hold an EGM within thirty to forty-five days of the original request (as per the agreed articles of the resort) the revised date for the EGM was suggested as  18th September..

To be clear this was not an attempt to delay the EGM and Mr Tann was happy to attend any meeting and despite being supported at all the previous meetings by the Level 2 Presidents he has already stated that he was prepared to stand down from his position if the majority voted to replace him.


There was no response to this request and the next thing we were all aware of, on Friday 17th  was the notification sent directly from Mileniun to all the owners informing us that we have a new president

Is this what passes for democracy in Spain in 2012 ?

Presidents and Politics.....

There has been a mass of vocal debate recently over what I have titled here as  "Presidents and Politics" or maybe "Condado-Gate", this has been initiated by the documents sent out recently to all owners by the resort administrators Mileniun Levante.

The first document issued on August 9th was a 20 page document containing a number of comments and accusations of impropriety and intractability against the standing Level 1 president of the resort.

The second document issued on August 10th runs to 78 pages and purports to be the minutes of the Presidents meeting held on 28th July.

I have no desire to delve into a line by line dissection or an audit of these documents and I wasn't present at the recent meetings so to do so would be unfair, as such my comments are based only on my personal experiences as a president and on the the interactions that I have had with Milenium and the Level 1 president.

Mileniun are employed by the "the community" and we all pay to employ them pay as such it is not correct procedure for them to issue such inflammatory statements to all owners under their own volition. It is also worth noting that the minutes sent out so publicly have not been approved and nor have they been signed off by the presidents as a "true and fair reflection"  of the meeting.  It is also telling that Mileniun chose to release these documents when the Level 1 president is away from the resort and unable to respond.

So why have they done this.....I am sure we have all been involved in commercial and social committees where the relationships have broken down - this seems to be very much the case here, one thing I am sure we are all in accordance with is we need less "war and more jaw"  we all want the resort to be well run but with adequate checks and balance on all parties who are spending our money and effecting our investment.

In a resort like Condado with several thousand apartments and a geographically diverse ownership base, the rule of 80/20 almost certainly applies, with 80% of the owners having little or no interest in what happens "in the background" as long as...when they arrive the grass is cut, the place is clean and they have water and electricity into their property.  To engage such a vast number of owners into a cohesive and decision making body is wholly impossible and as such, and whether we like it or not this power must be ceded to our representatives whether we have actively elected them or not .

The Presidents are elected on straight majority at the AGM, in reality... this may mean that if your Jardine has 200 separate properties and only 1 individual has offered his name as a president, he/she could be elected on a handful of votes. A major issue all the presidents have, is that we have no official listings of who lives in our specific garden  / block,  Mileniun have this information but under data protection are not allowed to pass over to us - this does make lines of communication difficult as we rely on the owners to contact the presidents, this was the key reason I started this blog to try and offer a heads up on important issues to the owners in P16.

I am sure that this debate will either gather steam over the next few weeks and blow up...or cool down and blow itself out, certainly it is not a time for knee jerk reactions on either side that risk putting the resort on a poorer commercial footing.

If you have any specific questions please do mail me.