The industrial estate in Can Picafort, which currently has only half its capacity occupied, can now be the location for small businesses, Santa Margalida town hall having lifted a requirement as to the minimum size for units on the estate.
See more: Ultima Hora
Showing posts with label Small businesses. Show all posts
Showing posts with label Small businesses. Show all posts
Thursday, August 23, 2012
Tuesday, November 30, 2010
Chain Reaction: Bankruptcies and non-payments
Spain's economic woes are receiving plenty of airing, but what about what is happening on the ground? The crisis is such that one has an impression that much economic life in Mallorca is all but grinding to a halt, brought about by a lack of credit, non-payments, negative cash flows and bankruptcies.
Businesses in Mallorca are caught in the chain reaction of the absence of liquidity in both the private and public sectors. Of the latter, those affected are suppliers to town halls and other governmental bodies and those linked directly to government agencies. Take chemists, for instance. Some had started posting notices to the effect that they could not supply prescriptions through the local health system because the health agency, IB-Salut, was not paying them. IB-Salut, and its problems have been known about for months, is another division of regional government, like the tourism ministry, so in debt that the government is having to bail it out. The government has at least sought to reassure the chemists and patients of the health system that prescriptions will be guaranteed.
The town halls, notorious as bad payers even in the good times, can typically take six months or more in honouring invoices. The Council of Mallorca has had to reach into its pockets to give the town halls some cash that they cannot otherwise raise because central government has imposed restrictions on their capacity to borrow and thus get into further debt.
It's not all bad news. One town hall, Alcúdia's, is being reimbursed by central government, following a protracted legal battle to get back IVA which was wrongly charged to its services agency, EMSA. The 600,000 or so euros that the court has so far agreed to could rise. In the meantime, the repaid IVA will help to clear debts the town hall has to suppliers.
If only all town halls or businesses could benefit from such windfalls. If only, especially for smaller businesses, there were mechanisms to prevent their bankruptcy when faced with what is an increasingly common occurrence, the protection of voluntary administration by larger businesses which then do not make payments while they buy time to try and sort out their affairs. For the smaller businesses, their suppliers, there simply isn't the time. And so they try and come to agreements with their own creditors or go bust and then find themselves blacklisted by banks.
The main business sectors affected have been construction, hostelry (in its widest sense, to include hotels as well as restaurants etc.) and transport. And there have been some big names that have got into difficulty. One of these is Marsans, formerly the ultimate owner, through the hotel chain Hotetur, of the Bellevue complex in Alcúdia. The sale of Marsans' businesses earlier this year looked as though it might have brought salvation. The problems have persisted, though the new owners seem to have arrived at a solution that will see creditors paid and so stave off a court order that was to place Hotetur in voluntary administration, one that creditors had not sought when urging the court to force bankruptcy in pursuit of the money they were owed.
Even if a solution is found, there is also the effect on local business confidence to be taken into account. In the case of the huge Bellevue, any uncertainty sets the rumour mill ablaze, one not helped by staff being paid only 70% of their October salaries (as was being reported in the middle of November). Just the threat of administration for a major employer and purchaser of services, to say nothing of supplier of tourists, is sufficient to drain even more life from the sick body of the local economy.
Lawyers have expressed concerns about the bankruptcy law which came into force in 2004. It was one, they say, drafted at a time when things were good and when bankruptcy was relatively uncommon. Since 2008 the trickle has become an avalanche. While voluntary status has its benefits for the company facing bankruptcy, it does little for suppliers.
One lawyer has described the system as an abuse of the law, and the overwhelming majority of companies that enter administration subsequently fail, some of them emerging later under new names with new owners, for example, a son or daughter, thus getting around the banks' blacklist. It has been said that the law makes it easy to simply close and disappear but also to get re-established in a different guise. And then perhaps to set the same chain reaction in motion, of smaller businesses, the suppliers, being left unpaid and ending up going to the wall all over again.
The chain reaction is likely to continue, likely to get worse. You can also describe the situation as a vicious circle, and the question is when or if the circle will be broken, because there is no sign of it being so.
Any comments to andrew@thealcudiaguide.com please.
Index for November 2010
Bankruptcies, non-payments and - 30 November 2010
Capdepera, new agriculture and - 13 November 2010
Catalonian independence, Joan Laporta and - 16 November 2010
Celebrity advertising, Rafael Nadal and - 3 November 2010
Chinese tourists - 24 November 2010, 25 November 2010
Christmas, spending and - 15 November 2010
Dunes in Can Picafort and Playa de Muro - 2 November 2010
Ensaïmada - 8 November 2010
Euro, Europeanism and Ireland - 23 November 2010
Facebook and tourism promotion - 4 November 2010
German versus British tourism - 9 November 2010
Golfers in Balearics, low number of - 27 November 2010
Graffiti artists face prison sentences - 28 November 2010
Guardia Civil and Catalan incidents - 18 November 2010
Hotel over-supply - 1 November 2010
Hunting - 11 November 2010
Inca hospital and patient information - 12 November 2010
Loneliness, expatriate - 5 November 2010
Mallorca identity and resorts - 22 November 2010
Muro employees paying salaries back - 25 November 2010
Playa de Palma regeneration - 20 November 2010
Pollensa and local tourism - 21 November 2010
Pope and Spanish secularism - 7 November 2010
Pumpkin, Muro fair and - 14 November 2010
RNE3, Siglo 21 and - 26 November 2010
Royal wedding (Kate and William) - 19 November 2010
Surnames and spelling rules, new - 6 November 2010
Tourism secretary-of-state and ministers - 29 November 2010
TripAdvisor and review sites - 10 November 2010
Underage drinking in Spain - 17 November 2010
Businesses in Mallorca are caught in the chain reaction of the absence of liquidity in both the private and public sectors. Of the latter, those affected are suppliers to town halls and other governmental bodies and those linked directly to government agencies. Take chemists, for instance. Some had started posting notices to the effect that they could not supply prescriptions through the local health system because the health agency, IB-Salut, was not paying them. IB-Salut, and its problems have been known about for months, is another division of regional government, like the tourism ministry, so in debt that the government is having to bail it out. The government has at least sought to reassure the chemists and patients of the health system that prescriptions will be guaranteed.
The town halls, notorious as bad payers even in the good times, can typically take six months or more in honouring invoices. The Council of Mallorca has had to reach into its pockets to give the town halls some cash that they cannot otherwise raise because central government has imposed restrictions on their capacity to borrow and thus get into further debt.
It's not all bad news. One town hall, Alcúdia's, is being reimbursed by central government, following a protracted legal battle to get back IVA which was wrongly charged to its services agency, EMSA. The 600,000 or so euros that the court has so far agreed to could rise. In the meantime, the repaid IVA will help to clear debts the town hall has to suppliers.
If only all town halls or businesses could benefit from such windfalls. If only, especially for smaller businesses, there were mechanisms to prevent their bankruptcy when faced with what is an increasingly common occurrence, the protection of voluntary administration by larger businesses which then do not make payments while they buy time to try and sort out their affairs. For the smaller businesses, their suppliers, there simply isn't the time. And so they try and come to agreements with their own creditors or go bust and then find themselves blacklisted by banks.
The main business sectors affected have been construction, hostelry (in its widest sense, to include hotels as well as restaurants etc.) and transport. And there have been some big names that have got into difficulty. One of these is Marsans, formerly the ultimate owner, through the hotel chain Hotetur, of the Bellevue complex in Alcúdia. The sale of Marsans' businesses earlier this year looked as though it might have brought salvation. The problems have persisted, though the new owners seem to have arrived at a solution that will see creditors paid and so stave off a court order that was to place Hotetur in voluntary administration, one that creditors had not sought when urging the court to force bankruptcy in pursuit of the money they were owed.
Even if a solution is found, there is also the effect on local business confidence to be taken into account. In the case of the huge Bellevue, any uncertainty sets the rumour mill ablaze, one not helped by staff being paid only 70% of their October salaries (as was being reported in the middle of November). Just the threat of administration for a major employer and purchaser of services, to say nothing of supplier of tourists, is sufficient to drain even more life from the sick body of the local economy.
Lawyers have expressed concerns about the bankruptcy law which came into force in 2004. It was one, they say, drafted at a time when things were good and when bankruptcy was relatively uncommon. Since 2008 the trickle has become an avalanche. While voluntary status has its benefits for the company facing bankruptcy, it does little for suppliers.
One lawyer has described the system as an abuse of the law, and the overwhelming majority of companies that enter administration subsequently fail, some of them emerging later under new names with new owners, for example, a son or daughter, thus getting around the banks' blacklist. It has been said that the law makes it easy to simply close and disappear but also to get re-established in a different guise. And then perhaps to set the same chain reaction in motion, of smaller businesses, the suppliers, being left unpaid and ending up going to the wall all over again.
The chain reaction is likely to continue, likely to get worse. You can also describe the situation as a vicious circle, and the question is when or if the circle will be broken, because there is no sign of it being so.
Any comments to andrew@thealcudiaguide.com please.
Index for November 2010
Bankruptcies, non-payments and - 30 November 2010
Capdepera, new agriculture and - 13 November 2010
Catalonian independence, Joan Laporta and - 16 November 2010
Celebrity advertising, Rafael Nadal and - 3 November 2010
Chinese tourists - 24 November 2010, 25 November 2010
Christmas, spending and - 15 November 2010
Dunes in Can Picafort and Playa de Muro - 2 November 2010
Ensaïmada - 8 November 2010
Euro, Europeanism and Ireland - 23 November 2010
Facebook and tourism promotion - 4 November 2010
German versus British tourism - 9 November 2010
Golfers in Balearics, low number of - 27 November 2010
Graffiti artists face prison sentences - 28 November 2010
Guardia Civil and Catalan incidents - 18 November 2010
Hotel over-supply - 1 November 2010
Hunting - 11 November 2010
Inca hospital and patient information - 12 November 2010
Loneliness, expatriate - 5 November 2010
Mallorca identity and resorts - 22 November 2010
Muro employees paying salaries back - 25 November 2010
Playa de Palma regeneration - 20 November 2010
Pollensa and local tourism - 21 November 2010
Pope and Spanish secularism - 7 November 2010
Pumpkin, Muro fair and - 14 November 2010
RNE3, Siglo 21 and - 26 November 2010
Royal wedding (Kate and William) - 19 November 2010
Surnames and spelling rules, new - 6 November 2010
Tourism secretary-of-state and ministers - 29 November 2010
TripAdvisor and review sites - 10 November 2010
Underage drinking in Spain - 17 November 2010
Tuesday, August 31, 2010
Diamonds And Pearls: Losing Mallorca's industrial treasures
The good news about the tourism industry continues. In August, hotel occupancy in Mallorca has risen by seven per cent, compared with 2009, while September is expected to witness a two per cent increase. It's just as well that the industry is giving some reasons to be cheerful. Other industries make you want to weep.
Economic diversity in Mallorca is essential, but the contraction in sectors other than tourism is alarming. Over a period of five years, industrial activity has declined by just under 30%, a far greater fall than anywhere else in Spain. This reduction has affected more or less all the island's smaller industries, ones traditionally associated with the island - pearls, marine, footwear - as well as those that are less traditional, such as chemicals. You name it, it's on the way out.
It's those stats chaps again. The national statistics office has recorded the fall in the production index and has shown that Mallorca's island geography is not totally to blame for the slump. The Canaries haven't suffered anything like the same scale of decline.
Isolation is a factor, though. It is estimated that because of transport costs alone, it can be 30% more expensive to produce locally, and then you have the costs of going the other way. The call has gone out for help in boosting exports, but it is not clear how this might be done, other than through local management of ports and the airport, as is being suggested. Quite how this might benefit in cost reduction, I'm unsure, as there are also the higher costs of local production associated with land. If you have ambitions of being a light manufacturer in Mallorca, then you probably need your head examining, or you should at least consider an alternative location. Industrial land costs almost twice as much as the Canaries and six times as much as in Aragon, a mainland province within shipping distance of the island.
This high, prohibitive almost, cost of land is attributed in part to speculative developments and property acquisition. Go around Mallorca and you will find industrial estates in most towns. Some, such as in Pollensa and Can Picafort, are under-occupied. The Alcúdia one is completely unoccupied, but that's because they haven't sorted out the electricity supply. In Inca, they are planning to build a third industrial estate, this for a town of under 30,000 people. On the larger estates in Palma, units are being abandoned because the costs are simply too great.
Why are all these industrial estates needed? The answer is that they're not. But built they nevertheless are, with a suspicion that someone might have profited illicitly. And they all come with a mix of usage. The new Inca estate has provision for a percentage of land for entertainment purposes; you might recall the talk of a theme park there. It is this sort of provision, as well as that for large car showrooms and banks (which can afford the higher rents) that is one reason for driving up the cost of what is then limited land for industrial purposes. This is not the whole story, however. Over supply would suggest that costs would be lower, but they're not. It's a familiar tale where Mallorca land for residential purposes is concerned. Greed is probably one element, and the Mallorcans are renowned for it, on top of which is the fact that units and land on industrial estates are bought by speculators who have no intention of renting them out at what might be affordable levels for smaller businesses.
Clearly if industrial activity slumps to the degree that it has and may continue to, and if nothing comes along to replace the old factories, then there is an employment problem. Decline of manufacturing may be compensated by an increase in services, but the question then is, which ones. Mallorca needs an economic strategic plan, one that has been necessary for years. But it is no nearer getting one, and all the while the traditional industries and small businesses fold or shift out of industrial units with their inflated price tags.
QUIZ:
"Diamonds and Pearls". His finest moment?
Any comments to andrew@thealcudiaguide.com please.
Index for August 2010
Air-conditioning - 5 August 2010
Air-traffic controllers' strike - 4 August 2010
Albufera information centre closed - 18 August 2010
Alcúdia corruption accusation - 17 August 2010
Alcúdia power station - 19 August 2010
AlcudiaPollensa.blogspot.com - 29 August 2010
All-inclusives in Puerto Pollensa - 3 August 2010
Balcony diving - 22 August 2010
Beach and sea, calm - 28 August 2010
British market, promotion aimed at declining - 6 August 2010
Can Ramis building, Alcúdia - 10 August 2010
Carl Cox, event tourism and - 7 August 2010
Climate change - 23 August 2010
Ducks tradition, Can Picafort's - 8 August 2010, 17 August 2010, 19 August 2010
Fires - 25 August 2010
Football replica shirts, British bars and - 11 August 2010
Industry, rapid decline in Mallorcan - 31 August 2010
Land development and policy - 13 August 2010
Lilos - 24 August 2010
Literature, Mallorca and - 26 August 2010
Majorca Daily Bulletin - 9 August 2010
Muro golf course - 13 August 2010
Petrol stations - 20 August 2010
Porto Cristo: the correct name - 2 August 2010
Prostitution in Magalluf - 27 August 2010
Puerto Pollensa's swimming pool - 16 August 2010
Statistics in July, tourism occupancy and spend - 30 August 2010
Theme park, Inca - 15 August 2010
Topless sunbathing - 1 August 2010, 2 August 2010
Tour operators' profits - 12 August 2010
Town halls have to repay - 21 August 2010
Traffic police - 14 August 2010
Weather, unusual summer - 18 August 2010
Economic diversity in Mallorca is essential, but the contraction in sectors other than tourism is alarming. Over a period of five years, industrial activity has declined by just under 30%, a far greater fall than anywhere else in Spain. This reduction has affected more or less all the island's smaller industries, ones traditionally associated with the island - pearls, marine, footwear - as well as those that are less traditional, such as chemicals. You name it, it's on the way out.
It's those stats chaps again. The national statistics office has recorded the fall in the production index and has shown that Mallorca's island geography is not totally to blame for the slump. The Canaries haven't suffered anything like the same scale of decline.
Isolation is a factor, though. It is estimated that because of transport costs alone, it can be 30% more expensive to produce locally, and then you have the costs of going the other way. The call has gone out for help in boosting exports, but it is not clear how this might be done, other than through local management of ports and the airport, as is being suggested. Quite how this might benefit in cost reduction, I'm unsure, as there are also the higher costs of local production associated with land. If you have ambitions of being a light manufacturer in Mallorca, then you probably need your head examining, or you should at least consider an alternative location. Industrial land costs almost twice as much as the Canaries and six times as much as in Aragon, a mainland province within shipping distance of the island.
This high, prohibitive almost, cost of land is attributed in part to speculative developments and property acquisition. Go around Mallorca and you will find industrial estates in most towns. Some, such as in Pollensa and Can Picafort, are under-occupied. The Alcúdia one is completely unoccupied, but that's because they haven't sorted out the electricity supply. In Inca, they are planning to build a third industrial estate, this for a town of under 30,000 people. On the larger estates in Palma, units are being abandoned because the costs are simply too great.
Why are all these industrial estates needed? The answer is that they're not. But built they nevertheless are, with a suspicion that someone might have profited illicitly. And they all come with a mix of usage. The new Inca estate has provision for a percentage of land for entertainment purposes; you might recall the talk of a theme park there. It is this sort of provision, as well as that for large car showrooms and banks (which can afford the higher rents) that is one reason for driving up the cost of what is then limited land for industrial purposes. This is not the whole story, however. Over supply would suggest that costs would be lower, but they're not. It's a familiar tale where Mallorca land for residential purposes is concerned. Greed is probably one element, and the Mallorcans are renowned for it, on top of which is the fact that units and land on industrial estates are bought by speculators who have no intention of renting them out at what might be affordable levels for smaller businesses.
Clearly if industrial activity slumps to the degree that it has and may continue to, and if nothing comes along to replace the old factories, then there is an employment problem. Decline of manufacturing may be compensated by an increase in services, but the question then is, which ones. Mallorca needs an economic strategic plan, one that has been necessary for years. But it is no nearer getting one, and all the while the traditional industries and small businesses fold or shift out of industrial units with their inflated price tags.
QUIZ:
"Diamonds and Pearls". His finest moment?
Any comments to andrew@thealcudiaguide.com please.
Index for August 2010
Air-conditioning - 5 August 2010
Air-traffic controllers' strike - 4 August 2010
Albufera information centre closed - 18 August 2010
Alcúdia corruption accusation - 17 August 2010
Alcúdia power station - 19 August 2010
AlcudiaPollensa.blogspot.com - 29 August 2010
All-inclusives in Puerto Pollensa - 3 August 2010
Balcony diving - 22 August 2010
Beach and sea, calm - 28 August 2010
British market, promotion aimed at declining - 6 August 2010
Can Ramis building, Alcúdia - 10 August 2010
Carl Cox, event tourism and - 7 August 2010
Climate change - 23 August 2010
Ducks tradition, Can Picafort's - 8 August 2010, 17 August 2010, 19 August 2010
Fires - 25 August 2010
Football replica shirts, British bars and - 11 August 2010
Industry, rapid decline in Mallorcan - 31 August 2010
Land development and policy - 13 August 2010
Lilos - 24 August 2010
Literature, Mallorca and - 26 August 2010
Majorca Daily Bulletin - 9 August 2010
Muro golf course - 13 August 2010
Petrol stations - 20 August 2010
Porto Cristo: the correct name - 2 August 2010
Prostitution in Magalluf - 27 August 2010
Puerto Pollensa's swimming pool - 16 August 2010
Statistics in July, tourism occupancy and spend - 30 August 2010
Theme park, Inca - 15 August 2010
Topless sunbathing - 1 August 2010, 2 August 2010
Tour operators' profits - 12 August 2010
Town halls have to repay - 21 August 2010
Traffic police - 14 August 2010
Weather, unusual summer - 18 August 2010
Sunday, October 05, 2008
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.
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
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.
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
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