Yep. Spain allowed their economy to get horribly distorted towards feeding the property and construction bubble, just like our own. We are now both having a very painful readjustment, a generation is literally paying the price and will continueto do so for a very, very long time.
Not so sure about this. Spanish prices have increased enormously in the last several years, it is no longer so cheap to live there.
On a related topic, how safe are Spanish banks now?
I think I saw somewhere recently that Santander (reputed to be super-safe, but who went on a takeover splurge over the last decade, if my memory is correct) was refusing to pay on some bond or other - sorry, no link available.
Your memory is correct Mantach, I am living in Spain and got a shock when I heard this on the news last week.
The media here are full of ‘crisis’ stories every day now. Prices are still sticky where I live (northern coast) but are starting to come down, southern areas have already seen falls of 50% (anecdotes, no link). Public anger at the government appears not to have reached Irish proportions but there have been some protest marches, mostly to do with job losses in the motor industry.
The main state TV station (TVE1, equivalent to RTE1) did a 2-hour investigative special just last week, called ‘Desperate to Sell’, where they interviewed a wide range of people: smalltime promoters offering 2-for-one deals, divorced couples and people who had moved towns for work, now desperate to sell their flats; people renting in ghost estates (one guy said he enjoyed the quiet and the low rent!); even some groups of squatters! Now that’s a term I hadn’t heard mentioned much since London in the 80’s, I wonder will they appear in Ireland, plenty of empties and people struggling with accommodation costs!
Anyway here are some more details on the Santander story from seekingalpha:
'The most recent and most obvious example of the push coming to shove situation is the announcement by Spain’s Banco Santander (STD), yesterday (Monday), that its Banif property fund, the largest of its type in Spain, could not meet the avalanche of redemption requests it had been receiving, and consequently had asked the stock market regulator for permission to suspend payments for up to 2 years.
According to the bank’s own statement clients (of whom there are a total of around 50,000) holding 80 percent of the investments, or 2.62 billion euros, had asked to redeem their holdings while what is the eurzone’s biggest bank had had to admit that the Banif Inmobiliario Fund FII lacked the cash to facilitate this, and that they, Banco Santander were not going to inject the liquidity necessary to enable the fund so to do… Full story at seekingalpha.com/article/120888-santander-s-banif-fund-suspends-payments