Expat evacuation plan for those living in Spain and Portugal

IS THE UK REALLY PLANNING TO RESCUE BRITONS IN SPAIN AND PORTUGAL?

Well, I think if I was in Spain in charge of marketing Spanish property to the British (if there is such a person!) then I would probably finally have my head in my hands.  Either that or I would be looking frantically for a wobbly, three legged stool and a short rope.

Why?

Because the UK press has recently been advertising the fact that the Foreign Office is making plans to evacuate British civilians living in Spain and Portugal should the banks in Spain and Portugal collapse.  This may, it is said, leave many expats in deep financial trouble – despite both countries guaranteeing the bank account of an individual to a maximum of 100,000 Euros.

Needless to say, the Press in the UK have pounced on the Foreign Office plans with predictable glee and (in the case of the Mail) resorted to the tired cliché of Dunkirk – this time a ‘financial Dunkirk’ (Heaven help us!) for when expatriates are hit by ‘financial oblivion’.

Gosh.  This really does seem like hysteria in the making.

The Spanish economy – how bankrupt is Spain          Banking scandal Spain 

Of course, I suspect that very few expatriates living in Spain and Portugal have large sums of money in the Spanish banks here.  Virtually every Briton I know has kept their liquid assets back in the UK or off-shore, with monthly pension payments coming from the UK (obviously) and other money being transferred, when needed, from UK or off-shore accounts.  All of this keeps the money transfer companies happily in business and most Britons feeling reasonably secure, even though they may have their biggest asset in Spain.

The Spanish economy and debt in Spain – the town halls are in trouble

Equally, no-one living in Spain over the past three or four years can possibly have any illusions about the ‘security’ of Spanish banks.  The latter have been clearly in deep trouble for all of that time with the Cajas (Savings Banks) melting down one after the other – something consistently highlighted in the news (Spanish, expatriate publications and their home country national Press).

Indeed, quite frankly, any Briton still with a lot of money in a Spanish bank needs his ‘head examining’ with few British expatriates that stupid.  So, the numbers of people seeing financial oblivion from a cash point of view are probably very restricted.

Far more worrying for many expatriates living in Spain and Portugal is the prospect of their homes devaluing even more, if the financial crisis in Spain and Portugal worsens further – let alone if the Peseta returns or the Eurozone splits into two.

As it is, virtually anyone who bought a Spanish property between 2005 – 2007 will have seen their property drop significantly in value, perhaps by as much as 35% – 50%.  This is a massive reduction of equity with any further loss truly devastating.

Banking -the Spanish property crash and the Banks          Banks in Spain – how safe are they

Needless to say, the real curse of property prices dropping radically is that it makes it very difficult for an expatriate living in Spain or Portugal to return to the UK and re-enter the British property market.  This is particularly the case with retired people who have little prospect of regaining their wealth and who may have to very significantly down grade – if they are left with enough money to buy anything at all.  It is these people who will really need help or who have to realise that any prospect of moving back to the UK has disappeared for some time to come.

The question, of course, is whether the banks in Spain and Portugal will collapse – making the UK Foreign Office ‘Dunkirk’ plans necessary?

Well, that is anyone’s guess, frankly, and goes to the very core of whether the Eurozone will be sustained and stability regained.  That, I am afraid is a question that goes well beyond my ‘pay scale’ and is what is confounding our  EU ‘leaders’.

However, one thing is for sure – and that is that this is no time to have a lot of money in Spanish or Portuguese banks for expatriates living in Spain and Portugal and maybe that is the real lesson to be learnt from the UK Foreign Office plans…

Nick Snelling – Culture Spain

FURTHER RELEVANT ARTICLES ON BANKS IN SPAIN

The Spanish economy – how bankrupt is Spain

Banking scandal Spain 

Spanish economy – meltdown?

Budget cuts in Spain

Banking -the Spanish property crash and the Banks

Banks in Spain – how safe are they

Banking in Spain - the four secrets to banking in Spain

A financial Dunkirk – Britain draws up rescue plans

The Spanish economy and debt in Spain the town halls are in trouble