Spain: Recession is quieter over here

As the British economy staggers from crisis to crisis, as witnessed by the daily poor numbers on sales, mortgages, repossessions, jobless, pensions and business confidence, Spain seems less frenetic, despite having the most unemployed in Europe.

With its massive construction industry in decline and house-building down by a third to 400,000 completions this year, it hardly surprising jobless figures are rising and may reach 15% next year,

The Spanish Government announced an 11 billion euro stimulus package aimed at creating 300,000 jobs and cushioning the Spanish economy from the global crisis. Prime Minister José Luis Rodríguez Zapatero told the Spanish Parliament that the package, which will cost the equivalent of about 1 percent of gross domestic product (GDP) would include about 8 billion euros for public works and an additional 800 million euros to help the country’s ailing auto industry.

Spain has also created a 50 billion euro fund to buy assets from banks that need liquidity and said it will underwrite up to 100 billion euros in new bank debt. The country can afford this because its massive reserves contrast with the “cupboard’s bare” position in the UK.

Said the Prime Minister, “The public investment measures are meant to protect and create jobs. Particularly due to the big contraction taking place in our property sector, Spain is especially sensitive to the poor international environment.”

By that, he means foreigners are not buying second homes in Spain at the same level enjoyed during the last decade. By bank assets, he means the 1,000s of completed homes funded by the banks in the building boom years and lying empty as the recession bites in the UK and other north European nations whose citizens have been buying sunshine homes.

The next move is fairly predictable. In a dash for cash, more developers will offer huge discounts for their key ready apartments on the Costas and even more will themselves under pressure from their funder banks to do the same in order to pay back outstanding loans.

So expect a buying bonanza in 2009 as Brits, Germans and Scandinavians are tempted by discounts of 20% to 50% on quality apartments with swimming pools, paddle tennis courts, gyms and spas close to the golden beaches and amenities of top Costa resorts.

With an asset in the world’s strongest currency it’s an investment that will start to look good in 3-5 years as Spain is expected to remain as Europe’s top holiday destination.

Meanwhile, for buyers in 2009 the new place in sunny Spain will provide a lovely family refuge from the trials and tribulations that will continue to afflict the UK for years to come as a result of the McBroons’ fiscal frolics…