Live News From Spain As It Happens

England 1966 World Cup hero Sir Geoff Hurst told the high court in London today that he felt remorse at allowing his name "to be used and abused" in a Spanish property scheme.

Hurst, who claims he lost £600,000, and six other investors are suing businessman Mark Cordner for a total of £2m.

They claim that, because of Cordner's alleged deceit, negligent misstatement, breach of fiduciary duty and wrongful conspiracy, they handed over the full purchase price up front and without security for seven off-plan apartments in a development called Aloha Royal, near Marbella. They say their rights over the properties have now either been destroyed or rendered worthless.

Hurst, 68, of Cheltenham, Gloucestershire, told Mr Justice Keith: "I feel some remorse at becoming involved and allowing my name to be used and abused in the way it has been."Most of the people I have been associated with have been very forgiving of my role."

Cordner, of Knebworth, Hertfordshire, admits that he made some of the representations alleged by the seven: Sir Geoff Hurst, David Barkley, Darren Innocent, Terence Hopley, Paul Kenyon, Martin Roberts and Verna Roberts, but he denies he acted deceitfully or negligently and says he also lost money to a Michael Hone – whose whereabouts are unknown, in that he had invested and lost his own money, time and reputation in Aloha Royal and another development, Aldea Beach. Counsel Peter Knox QC said Cordner's claim that he was a mere salesman was "patently untrue", and he was "in partnership" with Hone.Hurst said he first met Hone and Cordner in June 2003, and was offered an apartment as part of a three-year image rights contract to promote the properties through 15 personal appearances and media endorsements.

He was also approached about buying further apartments in Aloha at a heavily discounted price, as long as he paid up front.

"I believed that Mark Cordner owned the apartments and had the legal right to sell them to me."

At the start, he trusted Hone, who he considered "the boss", but now thought it was a cynical scheme right from the beginning.

Cordner's counsel, Michael Jefferis, said: "So you were taken in by Michael Hone completely?"

Hurst said: "By Michael Hone and Mark Cordner."

"It is easy to say in hindsight, but if I'd seen the documents, we wouldn't have gone anywhere near this."

Hurst denied that he became friends with Hone, although he had a few meals with him, he and his wife, Judith, stayed in a cottage at Hone's Spanish home and they attended his wedding.

"What I try to do when involved in promotional contracts is go beyond the contract and form some kind of social bond."

Hurst said that when he met Cordner, he seemed to know a lot about the business and had said he was the chairman of the company.

Hurst said that he did virtually no research and took no legal advice, as Cordner said that his in-house lawyer would deal with the legal work.

Hurst, who also has a claim against Cordner arising out of a loan, added: "I was at fault in not looking at the whole deal more closely."

He said that the content of the promotional brochures changed until they began to contain "absolute lies" about his involvement as a figurehead, such as that the World Cup team was coming over and that he was designing a golf course which, Hurst said – for an ex-footballer – was "ludicrous".

Source:  Guardian

Two Britons who allegedly held up a Spanish supermarket were arrested after returning to the shop as customers.

 The proliferation of English bars and eateries in Spanish coastal resorts is eroding the country’s attraction as a holiday destination because Britons no longer consider it foreign enough.

Even as the 27 finance minsters of the European Union gathered in Brussels yesterday and ordered Greece, again, to impose yet more hardship on its people in order to slash the national deficit, some may have been eyeing their colleagues around the Brussels meeting room warily.

For all are concerned about which nation might next suffer from the dreaded "contagion." The fear is that the next member of the so-called "PIIGS" — Portugal, Ireland, Italy, Greece and Spain — to suffer a crisis of confidence will be Spain.

Representatives of the continent's stronger economies chimed in on the need for austerity in Athens. The German deputy finance minister Joerg Asmussen, whose government has proven resistant to calls for a bailout, said that Greek efforts will "have to measure up" to steps taken by Ireland, which cut public-sector wages sharply. "We certainly won't let them off the hook," added the Austrian finance minister Josef Proell. His Swedish counterpart, Anders Borg, called for Greece to take more "concrete steps to regain credibility."

And yet fears are growing that, even though the Greek crisis is far from resolved, Spain could be the next "weak link" as the Greek Prime Minister, George Papandreou, described it a few weeks ago. It would certainly be standard market practice, analogous to the way they chased successive investment banks into the ground in 2008. Now the Spanish Prime Minister, Jose Zapatero, has virtually admitted as much is happening to him, blaming "speculators" for Spain's travails.

At first glance, Spain is in a much more secure position than her "Club Med" neighbours, because she starts with a level of national debt that is comparable to the UK, France and Germany – around 60 per cent of GDP (against well over 100 per cent in Greece) – and her banking sector has not, yet, suffered from quite the same meltdown as other economies that enjoyed a property bubble in the early years of this decade, notably the British, and Irish.

Spain's banks are strong and acquisitive, stronger than most other countries' institutions. But Spain's annual budget deficit, like the UK's and Greece's, has spiralled well into double figures – at almost 12 per cent of GDP it rivals Greece's Olympian disregard for the old Maastricht treaty rules of prudence.

And the markets are worried. Not, admittedly as fretful as they are about Greece, but the market price of insuring Spanish government debt has jumped in recent weeks (the mysterious-sounding credit default swaps), and now stands at €139,000 per €10m of debt – four times the cost of insuring an equivalent German bond.

The problem is size. The Nobel Prize-winning economist Paul Krugman put it this way: "In economic terms the heart of the crisis is in Spain, which is much bigger". The EU's Competition Commissioner Joaquin Almunia – a Spaniard – has suggested that Spain's economic problems look increasingly like those of Greece and Portugal. But in a worst case scenario, Greece is affordable – about 2.5 per cent of European GDP.

Spain, conversely, accounts for about 16 per cent of EU GDP, and is a much more expensive proposition for restoration work. Indeed, there are some grounds for supposing that, even if Berlin wanted to, it might be unable to afford to take on Spain's fiscal challenges. The IMF remains an option, but the damage to the eurozone's cohesion and credibility would be that much greater if an IMF team had to do what the EU demonstrably could not.

Underlying Spain's problems is a badly distorted economy. Unemployment is the obvious threat to stability. At almost 20 per cent of the workforce, there is little doubt that the Spanish economy seems peculiarly unable to generate jobs. Its bubble economy depended on a real estate boom; now its underlying competitiveness is in doubt.

In the 1980s, Spain was the location of choice for many foreign companies wanting access to the European market; now the showpiece GM factory in Zaragoza, only 30 years old, will be one of the hardest hit in the GM Europe restructuring. Jobs are heading to Eastern Europe, India and China.

Spanish productivity growth is disappointing. The labour market is also notoriously inflexible. That has helped push the property downturn into a slump, and left Spain teetering on the edge of a deflationary disaster. Elena Salgado, Spain's finance minister, recently declared Spain "is not Greece." She may have to start working harder to convince the markets that the similarities are just coincidental.

Source:  Businessweek.com

It is the only economy in Western Europe still in recession: property prices are crashing, unemployment has risen to more than 4 million, and some are already muttering that it could end up with a financial crisis worse than Greece's.

But at least Spain now has someone to blame: the country's intelligence services are investigating the role of British and American media in fomenting financial turmoil, the respected El País daily reported .

The newspaper said the country's National Intelligence Centre (CNI) was investigating a series of "speculative attacks" against the Spanish economy amid bond market jitters about the country's growing national debt.

"The (CNI's) economic intelligence division … is investigating whether investors' attacks and the aggressiveness of some Anglo-Saxon media are driven by market forces and challenges facing the Spanish economy – or whether there is something more behind this campaign," El País said.

The report follows claims from prime minister José Luis Rodríguez Zapatero's socialist government that speculators and newspaper editorial writers had launched a concerted attack.

The Financial Times has been especially critical of the government's handling of the Spanish economy in recent weeks. It has been joined by the Economist and other publications which have questioned Zapatero's economic management.

The newspaper said its report was based on "various sources" but said CNI sources declined to comment. Officials at the defence ministry, which runs the CNI, and Zapatero's Moncloa Palace offices were unable to confirm or deny the report.

Public works minister José Blanco, who is deputy leader of the Socialist party, has already said "somewhat murky manoeuvres" were behind market pressures on Spain. "Nothing that is happening, including the apocalyptic editorials in foreign media, is just chance. It happens because it's in the interest of certain individuals," he said recently.

"Now that we are coming out of the crisis, they do not want the markets to be regulated so they can go back to their old practices," he added.

El País reported last week that Zapatero had made a similar allegation to his party's executive committee.

Today it reported the prime minister had insinuated the media were part of a bigger offensive against the euro.

Source:  Guardian.co.uk

On Monday evening, after 19 years in Italy, the British writer Steve Farrand walked out of his flat in the city of Livorno, Tuscany, for the last time. Having spent one final night on Italian soil in a local hotel, Farrand then headed for Pisa airport: destination Stansted, and a permanent return to the UK.

It had been nearly two decades since Farrand drove the 1,200 miles from Oldham to Livorno in a battered Volkswagen Golf, fell in love with Italy, and decided to try to carve out a life there. But while his writing for UK publications provided a fairly steady income, the combination of a weak pound, the recession and the rising cost of living made his Italian life increasingly precarious. When the offer of a job in Bath came up last month, he took it.

Farrand is far from alone in ending his expat dream. According to research by the UK foreign exchange specialists Moneycorp, 70 per cent of Brits living in mainland Europe are now thinking of moving back. The biggest factor is the drop in sterling's value against the euro, by roughly 30 per cent over the past three years. Compare that with 2006, when it was estimated that more than 200,000 Britons emigrated from the UK, with France, Spain and Italy the principal destinations.

For long-haul removal companies, business is flourishing – in one direction at least. "Since the start of last year, we've had an increase of nearly 50 per cent in people coming back to the UK," said Vince Robinson of removalstofrance.com, a Kent company specialising in European destinations. "Some of the smaller UK removal companies are struggling to get enough vehicles out there to cope with the demand because there's not so much of an outbound market."

Mr Robinson dates the start of the "comeback boom" to early 2009. "An awful lot of people began saying the cost of living had increased in Europe. It's been mainly retired couples [one in five of all British expats worldwide], who've seen the value of their pensions fall by over 30 per cent because of the exchange rate... And if people still want to go to Italy, they are buying much further south where it's a lot cheaper."

The recession has left some Brits trapped abroad because their foreign property has lost value at the same time as their British savings have become worth less abroad. "Some people have been hit badly from both sides," says John Goldie of Moneycorp. "On one hand, their pensions have dropped because of the exchange rate, and, on the other, they've sold their UK properties."

Although Germany is the European country that expats are apparently keenest to return from, Mr Goldie believes the considerable presence there of British armed forces – around 50,000 – may have distorted the figures. He thinks Spain, second on Moneycorp's survey, is the country that has the most expats thinking about packing up.

On the ground, Mr Goldie's impression is easily confirmed. "Everybody's feeling the pinch," says Silvia, who moved with her husband, Ken, to southern Spain in 2002. "It's the young British couples with children who've had it worst – the ones who sold their businesses and properties in the UK, burned their boats, and now can't get work out here. They're living hand to mouth."

Many expats, Silvia says, supplemented their British income with local work. But as the Spanish economy is suffering its worst recession in decades, some parts of the unofficial job market available to Britons have shuddered to a halt. "All the odd jobs, the plastering and teaching private English classes, which used to bring in a few euros here and there, that's all drying up. We're scraping along, but if this situation continues, we'll have to make some serious recalculations."

Mick is a former Anfield taxi driver whose El Rebujito bar in the Spanish village of Fuente de Piedra caters largely – as his weekly curry and quiz nights suggest – for the 300-strong British community. "Older people on pensions are suffering so much," he says. "That third of the money they've lost, that's their going-out money. Just in Fuente de Piedra next month three couples are going back; one for health reasons, another because they can't get a job. It's something people are talking about all the time." Trade, he says, has been affected by the exchange rate, "particularly in the last two summers, and bills keep going up. It's hitting everybody really hard. Having no money puts a strain on relationships, too – that's why one couple I know are leaving for the UK".

In nearby Mollina, which has two huge, largely British-owned mobile home colonies, Mick claims "things are even worse; quite a few people are going back. If you're just keeping your head above water, you're doing well."

In Spain, 85 per cent of British expats say the weak pound has hit them financially, according to Moneycorp's survey. In Germany, it is 67 per cent, in Italy, 66 per cent. Small wonder, then, that in Spain – the only G20 nation to remain in recession, according to the International Monetary Fund – where an estimated one million Britons have permanent or semi-permanent residence, 37 per cent of expats are reported to be contemplating a one-way ticket back.

As for Italy, where up to a third of expats are now said to be thinking of a return, some Brits' financial woes stretch back further. "Life suddenly got a lot more expensive with the introduction of the euro [in 2002]," Steve Farrand says. "There weren't any real checks on the prices when they swapped them over from the lira. Since then it's got worse. And on top of that, with the economic recession, it's been tougher finding work."

Any kind of mass return or economic doom and gloom, though, is by no means Europe-wide. In the Dordogne, France's most British region, business owners are adamant that the English-speaking community continues to flourish. "It's true that six years ago, when I moved here, just to talk to an estate agent you had to make an appointment – there was so much demand from Brits, and that's no longer the case," says Tony Martin, who runs Aquitaine Computers in Eymet, a tiny Dordogne village where almost a third of the population is British.

"The differences are minor. Estate agents tell me the middle-priced properties are not selling as well as before, while renting's becoming more popular; and some people want to move on from the Dordogne to different parts of France which are cheaper. However, the lifestyle out here is still too good, compared with the UK, for most Brits to want to return."

"Yes, there is a problem, and some people have panicked," says Marzi Fiske, who moved to Brittany with her husband, Tony, in June 2007. "But in our part of Brittany, at least, there's no major rush back; we have a wide circle of British friends and we know of just three couples who are returning."

Returning, of course, is as drastic a decision as leaving in the first place, and remains very much a last resort. According to one recent survey by a British website specialising in life in France, frenchentree.com, 9 per cent of Brits who were living in France in 2009 returned – although five times that number said they had said goodbye to family or friends returning, or knew somebody who had gone back.

The return voyage, if made, is not easy. For Farrand, "it's a massive, massive end to it all – so big I couldn't face staying with friends my last night in Italy and opted for a hotel instead". Others are more phlegmatic. Jan Shepherd, who left Spain in 2007 after a year without work, says she "ended up seeing it as an extended holiday".

In her case, perhaps it was. Neither she nor her husband, Roger, spoke Spanish and their decision to live in an isolated inland village while looking for an advertising job or bar work proved more complicated than they had expected. Within 12 months they were back in Britain, perhaps wondering why they had left in the first place. Should current trends continue, they will not be the last "ex-expats" to do so.

Source:  The Independent

MADRID — Could Spain be the next Greece? The government bristles at the very thought, and points out its debt burden isn't nearly as heavy.

It's a stinging comparison nonetheless for a country that only a few years ago had burgeoning growth but is now lumped with other deficit-laden countries on a watch list for a Greek-style crisis.

The collapse of a real estate- and consumer-fueled boom has left Spain with a eurozone high jobless rate of nearly 20 percent, and the government ran up a deficit that in 2009 equaled 11.4 percent of GDP. That is way over the eurozone limit of 3 percent and earned Spain a place as the letter "S" in the inelegant PIGS acronym coined by analysts (the others are Portugal, Ireland, and Greece).

Spanish officials argue they are better off in several respects. National debt as a proportion of GDP — 66 percent this year and peaking at 74 percent in 2012 — is well below the EU average and far under Greece's 113.4 percent for 2009.

It does not have credibility problems like Greece, which is accused of fudging its debt numbers, and its banking system is relatively sound compared with other countries that had to bail their banking systems out.

Still, Spain has tried to spend its way out of recession with costly job-creation and stimulus measures, running up a budget shortfall that has spooked markets and lenders. Spanish sovereign debt has come under pressure, with creditors demanding a steeper interest rate to buy it and rates also rising for insurance against default.

Spain's economy is much larger than that of Greece, so it's a far bigger problem for the European Union and the euro if markets begin to doubt Spain's ability to pay.

If there is an EU country next in line for troubles with financing itself, it is Spain, even if the likelihood of this is low for now, said Javier Diaz-Jimenez, an economist at Madrid-based IESE Business School.

"Spanish public finances are under severe stress. Nobody in their sane mind can deny that," he said.

Spain's Socialist government rejects suggestions that the eurozone's fourth-largest economy, which had posted budget surpluses and robust growth as recently as 2007 but has suffered dearly following the collapse of a real estate bubble, has a debt mess similar to Greece's, which has driven down the euro and shaken the European Union.

But Spain did see fit to dispatch a team led by Finance Minister Elena Salgado to London and Paris last week to meet with ratings agencies and investors in an effort to explain Spain's deficit-reduction plans and restore its credibility.

And at times the government has looked on the defensive.

Last week it sent Brussels a document that raised the possibility of lowering most Spaniards' retirement pensions by changing the way it measures their working life. Amid a furious outcry from unions, hours later the government literally erased that paragraph from the document, saying it was not a firm proposal but rather an accounting simulation.

This fueled long-standing criticism from opposition conservatives that the government lacks a coherent policy to confront the recession and just makes things up as it goes along. Polls say that if elections were held now, Prime Minister Jose Luis Rodriguez Zapatero would lose to the center-right Popular Party.

One of the government's most prominent spokesmen, Infrastructure Minister Jose Blanco, also raised eyebrows by saying that shadowy outside forces are ganging up on Spain. He said: "Spain is the victim of an international conspiracy designed to destroy the country's economic status and, then, the euro."

The deficit-cutting blueprint calls for euro50 billion ($70 billion) in budget cuts over the next four years, with the goal of cutting the deficit to the EU limit of 3 percent in 2013.

When Salgado announced it, she left out the deficit numbers for the intervening years, and markets were rattled when days later Spain released projections for them that were about two points higher than they had previously banked on.

There are also concerns that the plan is short on details and not aggressive enough.

Ireland, by comparison, has slashed pay for state workers, cut welfare benefits and imposed new environmental taxes on fuel to try to contain its runway deficit.

Read the rest of the article

When renowned academic Nouriel Roubini said that Spain, not Greece, was Europe's No 1 problem, he created a stir. He also created a problem for an old university friend, Spain's economics secretary José Manuel Campa, who has since been forced to work round the clock to reassure international investors that Spain is a "solid" country and should not be compared to its fellow eurozone struggler.

Roubini, the man who foresaw the sub-prime crisis, raised the heat on Spain, where the financial crisis has left nearly 20% of the workforce unemployed as the country's model of growth based on a construction boom has unravelled. The past week has forced up interest rates on Spanish bonds and the share prices of profitable companies such as Banco Santander have dropped by 13%.

Putting on a brave face, Campa told the Observer: "Markets react drastically, we're better off this week than last before we announced our budget cuts."

The country's four million jobless are certainly not better off. Far from Madrid's bureaucratic centre, or the elite gatherings of Davos, thousands live on €1,000 (£870) a month. Service sector and office workers have their salaries capped at this level as employers know that, with 18% unemployment, they are unlikely to rebel.

"We're all taken by the balls – we can be forced to go at any minute and you don't know if you'll find anything else," says Maria, an employee of a fashion chain in Barcelona. "They give me three-month contracts, so if they want to get rid of me, they won't have to pay me. I spent one year unemployed, without being able to go out."

An hour's drive south along the Mediterranean coast, schoolchildren in Tarragona do not go on school trips as their parents can't afford the €12 cost. "You can see some children buy their textbooks at the beginning of the month, after pay day," says a teacher.

Further south, in Jaén, "where nothing, is moving," Javier Díaz's family ring constantly for advice as they seek to follow him to Madrid where he has found work as a taxi driver. But opportunities are scarce even in the capital. "Things are going to get worse as soon as people stop receiving their unemployment benefits," he says.

Every Spaniard seems to know somebody caught in the real estate bubble burst. Cheap credit and the arrival of about six million immigrants over the past decade allowed the construction sector to become the country's leading economic driver, representing as much as 25% of gross domestic product at the peak of the boom. Villages on the Valencia coast, dependent on fish and agriculture for centuries, started building state-of-the art glass buildings in a country that has always been more labour- than capital- intensive.

Properties worth €1m stretch along a coast that, far from Madrid and Barcelona, rarely generated much wealth. People on €1,300 a month owned BMWs and couples making €30,000 a year bought €500,000 homes.

Campa and economy minister Elena Salgado are working to help the unemployed, and to make services and tradable goods fill the part of GDP that construction once accounted for. "This won't be a good year for jobs, but at least the rate of job destruction is slower," Campa says.

As he spoke last Friday, financial markets kept hitting Spain. Although it has not had to spend billions to bail out banks, the country has lost credit in the international community, which is "looking for the next Greece, and looks at the numbers, instead of politicians talking the talk", says Gary Jenkins, at ­Evolution Securities in London.

Last week Spain announced higher taxes and draconian cuts to the deficit from a staggering 11.4% of GDP to reach the EU target of 3% by 2013. But markets have been unimpressed and now demand a record $183,000 to insure $1m of Spanish debt, twice as much as Britain.

Alien to the London-based derivative markets, most Spaniards are suffering the consequences: winegrowers in the Priorat area are idle as the prices for grapes are lower than the cost of harvesting them. "Many winery owners are selling out – they can't afford to pay for the loans," says Rafael de Haan, owner of Bodegas Albanico, a wine exporter. "Some are selling top-quality wine at wholesale prices – and in wholesale amounts."

But while the wine may be cheap, with some economists saying Spain won't recover until 2016, there is not much to celebrate.

Source:  Guardian.co.uk

MADRID (Dow Jones)--The Spanish government Friday said its budget deficit was a higher-than-expected 11.4% of gross domestic product in 2009, as it announced a new plan to shore up its accounts in the short and long term.

"It's a plan that is essential after our most recent deficit figures," Finance Minister Elena Salgado said at a meeting with journalists after the government's weekly cabinet meeting. Spain had forecast a 2009 budget deficit of 9.5% of GDP.

European Union rules require member states to keep their deficits within 3% of GDP. The European Commission, the EU's executive arm, has given Spain until 2013 to meet that target, and the government of Socialist Prime Minister Jose Luis Rodriguez Zapatero has promised to do so.

At the same time, investors' concern over Spain, along with the other euro-zone countries considered to be most weakened by the global economic crisis, has been mounting since Greece admitted late last year that its budget deficit was much bigger than previously thought.

Spain is grappling with the collapse of a decade-long housing boom that has pitched the wider economy into a deep recession, sent tax revenues plummeting and social welfare costs soaring.

Furthermore, in the aftermath of the housing bust, the government doesn't expect the economy to return to pre-crisis growth rates anytime soon, making it impossible to meet spending commitments taken on during the boom years.

In order to bring its deficit down to 3% of GDP in 2013, the government said Friday it will seek a broad consensus with Spain's powerful regional and municipal governments to take revenue-raising and spending reduction measures worth around EUR50 billion, or 5.7% of GDP, through the year 2013.

The central government will shoulder the bulk of the adjustment, with measures worth around EUR40 billion, or 5.2% of GDP.

Some of the measures, such as a tax increase equivalent to 1% of GDP, were included in the government's 2010 budget plan. But most are new and include measures such as commitments to replace just 10% of departing public-sector employees and to reduce capital expenditures by 0.5% of GDP.

With an eye on the longer-term sustainability of its finances, the government also revealed a proposal to raise Spain's mandatory retirement age to 67 from 65.

The government confirmed its forecasts of a GDP contraction of 0.3% in 2010 and growth of 1.8% in 2011. It raised its 2012 forecast slightly to 2.9% growth from 2.7% growth and gave a new forecast of 3.1% growth in 2013.

Ben May, economist at Capital Economics, said there are risks that the government won't be able to carry out the deficit reduction plans because they are "heavily reliant on a strong recovery of the economy". He also highlighted the government's substantial 2009 deficit overrun.

-By Jonathan House, Dow Jones Newswires; +34 91 395 8120; jonathan.house@dowjones.com

(Daniel de la Puente contributed to this report)

Source:  Wall Street Journal