Relax? Won't Do It

Credit needed. Fat chance, you might think. The organisation for small to medium-sized businesses is asking for a relaxation of the rules to allow banks to extend credit to small businesses which are, or will be, struggling. I doubt that there will be any relaxation.

One of the reasons why Spain is in a relatively good position to withstand the worst of the financial and banking crisis is the regulation of banks. While some of the smaller savings banks may be vulnerable, the larger ones should be safe enough. At the heart of this is an old stipulation put into place by the Bank of Spain which forced banks to build up reserves to combat precisely the kind of crisis that has engulfed institutions elsewhere. The banks had to create reserves to meet bad loans. Santander, the saviour of Bradford & Bingley, benefited from such sound management as well as an acquisition policy that has made it one of Europe's leading banks. Moreover, the national bank's rules prevented much of the bundling of mortgage risk into financial products, the type of which led to the toxic debt of the sub-prime crisis in the USA.

Nevertheless, there has been an almighty amount of lending, and therefore debt, in the form of mortgages, and now there is the problem of people who have taken on large mortgages for overpriced properties being unable to meet higher mortgage repayments but unable to lower prices of these properties. The banks are trying to be accommodating, but there is also so little mortgage lending occurring at present that those facing negative equity are unlikely to attract buyers even if those buyers were persuaded to pay the prices being sought to cover the high mortgages. In this climate, therefore, it is difficult to see how the banks can be persuaded to take a more relaxed attitude towards their business lending. This could have quite significant repercussions. Businesses, such as bars or restaurants, that are available for purchase might normally be snapped up, but unless a buyer has the cash or certainly the bulk of it, a loan is far less likely to be offered as part of the purchase package. One can anticipate, perhaps, that more businesses may stay closed with no purchaser and the owner unable to trade. Another aspect of the credit crunch is likely to be felt as the new season next year approaches. It is not uncommon, certainly at the start of the season, for businesses to get credit from suppliers. Yet these suppliers may well be seeking credit from their suppliers, and so the cycle goes. If the banks won't assist and if suppliers are reluctant to either, then one does wonder how easy some businesses are going to find even getting going next year.


EVER MORE PEDESTRIANISATION AND ROAD SIGNS
And once more into the breach, dear friends, the breech position of the Puerto Pollensa pedestrianisation, now with added Bot dimension. Where would we be without it? The press had it that the trial closure of the front line was to be between the Calle Elcano and the Avenida Paris. It isn't. Apologies, because I said before that it was, because that was how it was being reported. Yesterday morning, I happened to spy a notice in the El Pozo bar in the port. It said that the closure was to be between Elcano and Calle Bot. For those who do not know, Calle Bot is the road that goes past the Pollensa Park hotel; it is further down the road than Avenida Paris going towards Alcúdia. So I went and checked, and the diversion sign does indeed send traffic along Calle Bot. Thanks for the misinformation.

As far as the Gotmar residents challenge is concerned, this doesn't change things that much, albeit that the Calle Bot and then the Calle Cadernera meet up with the roundabout on the new road for Gotmar. More of an issue perhaps, were this to become a permanentish state, is that the Calle Bot is not a road designed to take great volumes of traffic. It may no longer be the pitted and potted horror it once was, but it is narrow, and when there are delivery trucks parked up by the bars, Bot is also a pain in the arse. However, I sense in all this a cunning plan by Mayor Cerdà. He and his town hall chums will already know that Bot is a botch of impracticality. So at some point they will sit in session and say that it's not quite working, this Bot-ty passage. And some bright spark, who has been rehearsing the lines handed to him, will receive the end of the metaphorical mayoral pointed stick, spring to attention and declare that there is a road that is suitable for traffic, the Avenida Llenaire. And they will all nod their heads and say, "why didn't we think of that?". Though of course they did and had, as this was the plan all along - to pedestrianise the whole of the road from Llenaire. And so it will happen because the alternative has been designed to fail. Cue ever more angst in the ranks of the Gotmar radicals.

Now that the pedestrianisation trial has been started, there is still the question of the road signs. As one comes to the junction of Juan XXIII, the road down to the roundabout by the entrance to the nautical club, and the Calle Vicente Buades, the road signs show right for Palma and Pollensa and left for Alcúdia. Ever since the new road opened, this has been a nonsense; it is now even more of a nonsense, as you can of course no longer get to Alcúdia if you happen to go left, which of course many a tourist in a hire car will attempt. Go left, go right, who knows?


QUIZ
Yesterday's title - Paul Young (http://www.youtube.com/watch?v=8l8D0aFVjvg). Today's title - no prizes except for knowing which DJ saw to its banning by Radio One.

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