The general election in Spain is scheduled for the 20th November 2011. Is the socialist government 'on the rocks'?
The past few days in Spain have seen some interesting responses to the present economic crisis in Spain including the revival of the wealth tax in Spain. Meanwhile, in some areas, there is a teacher’s strike in Spain with educators (amazingly!) complaining about an increase in their current working hours. Finally, temporary work contracts in Spain are being made unlimited (as opposed to the previous existing obligation for an employer to employ a worker full time – after the employee had worked a maximum of four temporary contracts).
To me, the wealth tax in Spain is the most confusing event in the Spanish news at the moment. So much so that neither a gestor nor a Spanish lawyer that I spoke to yesterday could tell me exactly what the wealth tax covers, let alone the percentage at which it is taxed! However, if you are wealthy, it may well affect you – so if you live here now and are tax resident in Spain or thinking of coming over to Spain as a permanent resident then you should check this out. Our QROPS specialist may be of help as he is a UK qualified accountant living permanently in Spain and will probably know the ins and outs of this law as it becomes clearer.
From what little I can establish, the wealth tax in Spain will only affect those people with assets (excluding that of their primary residence) of over 700,000 Euros. According to the Spanish government this means some 160,000 people in Spain – which I find somewhat incredible, frankly. I cannot believe that as few as only 160,000 people will be affected, given the significant wealth evident in Spain in so many areas, whether on the Costas or within the major cities.
Of course, the wealth tax in Spain is about trying to raise more money. This is understandable given the parlous state of the economy in Spain. However, what is less credible is the PSOE’s (socialist party) claim that the tax raised (estimated at some 1.1 billion) will create some 300,000 work contracts for young people. That would be great, of course, but anyone with any sense will be curious as to how exactly the jobs will be created. I have no idea and doubt that the present, incompetent socialist government knows either – probably they have picked this number out of the ether.
As to strikes in Spain by teachers complaining about increased hours. Well, this beggars belief! As I have written before (The State System in Spain – an hilarious insight) full time teachers currently work an 18 hour week with, I gather, a proposal now to increase this to 20 hours a week. Hardly what most of us would consider onerous, let alone justification for strike action when 20%+ of the Spanish population have no work at all and the unemployment rate for 18 – 24 your olds is somewhere in the region of 45%.
On a vaguely more positive note, both the PP (Spanish conservative party) and the PSOE (governing socialist party) have agreed to legislation to allow employers to employ workers on temporary contracts indefinitely. Or at least without a time limit for the next two years. This is in an effort to circumvent employers being obliged by law to offer an employee a permanent contract after the employee has worked for them for a maximum of four temporary periods.
I say that this change is ‘vaguely more positive’ because, whilst it is of help now to employers, it dodges the perennial problem of permanent work contracts in Spain. These are expensive and restrictive to employers who have traditionally avoided them ‘like the plague’. Needless to say, this has resulted in a significant percentage of the Spanish workforce being condemned to temporary work throughout their lives.
In reality, the existing employment legislation in Spain works, long term, for neither workers nor employers. So, few people would argue against a wholesale redrawing of the employment laws in Spain to make employment more flexible for employers – which would encourage them to offer more permanent contracts to Spanish workers and perhaps make Spanish industry more dynamic.
Of course, I hardly need emphasise how important it is to tackle employment within the state system in Spain and the utterly untenable and crazy situation where there are guaranteed jobs for life for state employees…
Lastly, the existing current Spanish government (PSEO – socialists) appear to be heading for a resounding defeat in the general election in Spain scheduled for the 20th November 2011. A recent poll gives the conservative PP party a 14.1 point lead and a potential absolute majority – with 81% of socialist voters polled expecting a massive rout. I suspect that this will be nothing less than the socialists deserve given their appalling economic record over the past few years.
Of course, it is open to question whether the PP (conservative) party will make a better job of governing Spain than the socialists. This is something about which most of the Spaniards I know are sceptical, along with the supporters of the Indignado movement - which may play an important part in the general election…
Nick Snelling – Culture Spain
FURTHER RELEVANT INFORMATION ON THE STATE SYSTEM IN SPAIN AND POLITICS IN SPAIN
The state system in Spain – an hilarious insight
General election in Spain 2011
Politics in Spain, the political parties
The Indignado Movement (riots in the UK, protests in Spain)