Gov. boost for property in Spain

As the McBroons shed their crocodile tears over being found out on dodgy expenses and go on the telly waving repayment cheques to reconnect with the voters - so they are not X-outed at the next election - it’s clear that the head of the bandit clan himself is to blame for the fiasco.

McBroon was in charge of the economy for ten years and so-called in charge of the country for two years and the unspeakable Mick Martin was in charge of the House of Commons for this current Parliament allowing the buying spree of MPs. Brit taxpayers are suffering from the antics of this useless pair.

Another catalogue of fiscal failures to heap upon the many that have blighted Britain and surely to be followed by McBroon failure at future elections, starting with the European and local elections next month.

Unlike McBroon, who has failed to say “Sorry” for his ministerial failures, his equivalent, Spanish Prime Minister Jose Luis Rodriguez Zapatero admitted that his government had erred in managing the country’s deepening recession. “It is obvious that the government made mistakes in its forecasts,” the socialist premier said during the annual parliamentary debate on the state of the nation.

Wow, words we have yet to hear on these shores?

But then Snr Zapatero, revealed, among a list of new economic stimuli, the removal of tax breaks on mortgages as a way of future control of the housing market, but effectively a great incentive for folks to rush out and buy now - before the threat becomes real in 2011.

Like McBroon, the Spaniard faces the electorate on 07 June with the EU elections and, as in the UK, serious consequences are likely. His other incentives included tax cuts to small and medium-size companies which maintained or increased employment, incentives to car purchases, measures to stimulate the property market, and cutting government spending by a billion euros.

Those measures can be helpful to over-50s British buyers of property in Spain, using the Libertad tax break and co-ownership deals on offer from leading specialists in the market and Spanish banks.

Can property buyers bank on Spanish galleon?

With all front pages of the national press covered in “international banking crisis” stories and wall to wall coverage on the TV news, would-be property buyers thinking of a house move in the UK or even a place in the sun to get away from it all, may be as puzzled as the rest of us?

“Unsinkable” Lehman  Brothers sank at Titanic speed because of their own greediness – the boss’s pay topped 22 million – and forays in derivatives uncharted waters without a life raft. Other banks doing business with them could go down with similar Titanic timing, while others can pick up the juiciest remains. Regulators in the US and UK seemingly failed to stop what was going on and merely moved the deck-chairs around…

Not in Spain though, where it appears their banking galleons are in smoother waters . This is because the central Bank of Spain cracks down on uncharted and risky speculative investment, so Spanish banks have minimal exposure – in fact “practically non-existent” - to Lehman Brothers. Spain's banking system also has some of the world's strictest reserve requirements.

While Spanish banks remain in a fairly healthy state, the worsening global financial market conditions will have an impact on Spain's economy and smaller Spanish banks could be forced to seek fresh capital if the crisis drags on and bankruptcies continue to soar in the property markets.

Bank of Spain Director General of Research Studies, Jose Luis Malo de Molina said: "The direct impact of the Lehman bankruptcy for Spanish banks will be minimal, given their exposure is practically non-existent. The Spanish banking system is facing the international crisis from a healthy position, with good levels of solvency and profitability,"

 "However, it is necessary to recognise this episode signals an intensification of the serious international financial crisis, that also has consequences for the Spanish economy," Malo de Molina added. Spain was the only one of the euro zone's four biggest economies not to contract in the second quarter after the government drew on its budget surplus to launch a 38 billion euro economic stimulus package.

The Bank’s proactive statement contrasts with the wall of silence from the British Government – busy scrambling for the political lifeboats - and from the Bank of England that reported high inflation, but failed to change course again.

Buy a property in Britain? Only if you really need to and can get a half decent mortgage. Buy a property in Spain?  Plenty of bargains, good mortgages, a better managed economy, oh, and the sun shines for 300 days a year along the Costas.