The Pain In Spain 2012

Welcome to 2012. If you live and work in Mallorca, the good news is that you will be paying more income tax. A nice way to bring in the new year.

The announcement by the Spanish Government that income tax will rise is just one of a package of austerity measures. It shouldn't have come as a surprise, except that prior to the election Mariano Rajoy had implied that income tax wouldn't go up. Promises or statements can swiftly be reneged upon and can easily be justified by putting the blame on a situation left behind by the Zapatero administration that was worse than had been expected. It is a wholly disingenuous justification. Voters were idiots if they had really believed taxes wouldn't go up.

The government, in increasing income tax rather than IVA (VAT), argues that this will be less damaging to economic recovery. Who are they trying to kid? Fiscal measures, be they direct or indirect taxation increases, are harmful. At least with keeping direct taxation at the same level, there is theoretically more disposable income. The government's argument is fatuous.

A sensible measure that the government has taken in respect of IVA is not to reduce it for tourism businesses. Again, it is something of a broken promise, but it was a promise that was flawed. Tax receipts from IVA rose in 2011, thanks to a one per cent rise to 8% for tourism businesses. With prospects for tourism in 2012 bright and northern Africa still in turmoil, an IVA reduction would have been unnecessary and a mistake.

The government is faced with an enormous challenge. Of course it is, and it is being realistic in terms of the degree to which it can get the deficit down, but its measures will do little to stimulate recovery. IVA will be reduced for new-property purchase, which may help, but with credit in such short supply, it is mere tinkering.

Spain is pretty much back in recession and Mallorca and the Balearics are as well, despite what the regional government might think. The banks don't think the same and have said so. Tourism, for Mallorca, will be the saviour as it was in 2011, but the island's prospects are otherwise as bleak as they are for the country as a whole.

There must have been consternation in the corridors of Balearics political power when the news came through that central government intended not to extend financing to the islands (along with three other regions) as had been promised. Whether President Bauzá was on the phone to Rajoy demanding to know what was going on we don't know, but the central finance ministry issued a further announcement saying that there had been an error and that no agreement as to a finance cut (elimination in fact) had been arrived at. Again, who are they trying to kid? You don't just make a mistake when it comes to this sort of an announcement, or if you do, it doesn't say much for how joined up central government is.

The swiftness with which the mistake was admitted does suggest that some stern words were had. For Bauzá, so intimately linked to Rajoy, it was news he could have done without, as pressure starts to mount on him and dissent from within his own party increases, the result in part of the closeness both personally and in philosophy between Bauzá and Rajoy. The withdrawal of central finance would also, in all likelihood, have put the kibosh on certain projects in Mallorca; bad PR again for Bauzá who would find it extremely difficult to criticise his PP masters, having so slavishly been prepared to follow them.

Away from the budget, another announcement by central government has a distinct Mallorcan flavour, and that is the appointment of Isabel Borrego as tourism secretary of state. It had been expected that a Mallorcan would be appointed, even if Miquel Ramis had been the front-runner, but is Borrego's appointment as positive as Ramis' might have been? Ramis does have direct experience of tourism, where Borrego doesn't. The government says that this doesn't matter as Borrego's predecessor, Joan Mesquida, also didn't have direct experience. It's a weak argument to say the least.

Various organisations have been quick to support Borrego's appointment, but then they always are; it is known as being diplomatic. The most positive thing that is being said about Borrego is that her background in property and in law is an advantage. An advantage? What for exactly? Or for whom? One guess. Hotels. The worry is that Borrego will be inward-looking in addressing more arcane aspects of tourism, such as the application of various laws as they apply to the industry and to developments, rather than outward-looking in terms of marketing.

So, here we are at the start of 2012. It is going to be a rocky ride this year and unfortunately it hasn't started very encouragingly.


Any comments to andrew@thealcudiaguide.com please.

MALLORCA TODAY - Mallorcan becomes new Spanish tourism secretary of state

A Mallorcan has, following much speculation that a politician from the island would be appointed, been made the secretary of state for tourism in the Spanish government, but it is not Miquel Ramis, as had been widely rumoured. Instead, it will be a woman - Isabel Borrego, one of the deputies from the Partido Popular who was voted into Parliament on 20 November. Borrego will be tourism secretary in the ministry for industry, energy and tourism, which is headed by the former president of the Canary Islands, José Manuel Soria.

So Many Miquels: Tourism secretary

You have to be a tad careful when sifting through all the information as it applies to Miquel Ramis, and that's because there are so many Miquel Ramises and more than just one of them are involved with the hotel industry, or have been implicated in cases that have required their presence in front of m'lud, or both.

The particular Miquel Ramis who is the subject here is not the Miquel Ramis who is the founder and president of Grupotel, the ex-mayor of Muro, disqualified from public office for ten years and mentioned in dispatches regarding the ongoing investigations into the affairs of former regional president Jaume Matas.

The Miquel Ramis, for our purposes, is the Miquel Ramis who was, confusingly enough, born in Muro but who is resident in Alcúdia, a former mayor of Alcúdia, a member of the family which is the major shareholder in the Alcúdia Beach apartments in Puerto Alcúdia and who came to an agreement in July with a court in Inca which allowed for cases against him, related to the apartments, to be archived. He is also the secretary-general of the Partido Popular in the Balearics and he is being lined up as the probable secretary of state for tourism in the national government.

A curious aspect of Ramis' continuing involvement with the PP locally is that President Bauzá made such a big thing about there not being any candidates at the regional elections who had any legal cases hanging over them. So much of a big thing did he make of it that this was one reason why there was a split in the party. Jaume Font had been implicated, albeit that his case was archived well before the elections. Nevertheless, Bauzá's stance, along with stances on other matters, was sufficient to suggest to Font that he was better off outside the PP and in charge of his own party.

There was perhaps a hint of double standards in that Ramis was secretary-general at the time of Bauzá's elevation to the PP leadership and beyond. He has recently been a candidate at different elections and was voted into the national parliament as a Balearics deputy. Now he might find himself with added responsibility in Madrid.

The closeness between Bauzá and Mariano Rajoy had led to some speculation that Bauzá might himself have been given a post in the Rajoy administration. To his credit, Bauzá dismissed the idea; it wouldn't have looked good to have walked away from the presidency only a few months into the job.

Nevertheless, the closeness may well explain why Ramis is in the frame for the secretary of state post, and were he to be chosen, there would be a sense of continuity, as the outgoing secretary was the Mallorcan Joan Mesquida who has gone on record as saying that he hopes his successor will also be from the Balearics.

Notwithstanding the little legal difficulties he found himself in, Ramis, widely regarded as having been a good mayor of Alcúdia, would represent an interesting appointment, as it would give the two island tourism regions of Spain - the Balearics and the Canaries - a dominance of national tourism policy. The new minister for industry, energy and tourism, and thus potentially Ramis's boss, is José Manuel Soria, a former president of the Canaries.

Soria, on being appointed minister, said that the Canaries "will have singular attention", but he added that the Balearics would not be forgotten as the islands also need "special attention" because of the importance of tourism.

Though many in the tourism industry had called on Rajoy to appoint a minister for tourism alone, so raising the importance of tourism around the cabinet table, the necessity for a dedicated minister is questionable. So long as the multi-tasking supremo, Soria, has a feel for tourism, which he will have, and there is a secretary-general of sufficient competence and experience, a minister is probably unnecessary.

The question is whether Ramis really fits the bill. In one respect, he does have an advantage over Mesquida, whose previous background in office was that of responsibilities in the Balearics for finance and the Guardia Civil. On the face of it, a combination of Soria and Ramis would look to be positive for the Balearics, but not everyone might agree, as the minutiae of the tourism industry won't allow them to agree.

Ramis has business interests in hotels. Which are the two regions of Spain most subject to the hotel lobby and which therefore are the strongest opponents of alternative accommodation, e.g. holiday lets? The Canaries and the Balearics.


Moving on ... Christmas 2011 -
Time, I guess, to forget all the matters that bother us for the rest of the year. If only for a day or two. A happy Christmas to all the many of you who come here every day or less frequently, and enormous thanks to the many who correspond with me and/or who provide support through appreciation (and criticism) as well as through invaluable feedback and information.

As has become traditional, here is the blog's Christmas song. Not that it is particularly Christmassy, just that somehow it captures a spirit. Plus there are the heavenly stars. Laura Veirs.





Any comments to andrew@thealcudiaguide.com please.


(Please note: As with other areas of the media, especially the broadcast media, I shall be taking a rest for a day or two but will be handing over to a guest blogger tomorrow. And she may even still be with us on Boxing Day. So I hope you will send a special Christmas welcome to Leonora Madd. Tomorrow - on the blog.)