IVA increases – small businesses cash in

Posted on 05/09/2012 by Michael

IVA increases – small businesses cash in

The level of Spain’s purchase tax (IVA) went up on many goods from 18% to 21% on September 1^st2012. Are small businesses cashing in on this increase and causing inflation in the cost of some of the most basic of everyday purchases?

On September 1^st the level of IVA in Spain (VAT in the UK) went up from 18% to 21%. This is all in an effort to try to reduce the country’s national debt, please the stronger economies in the EU and make sure that there’s more than enough money to give to the bankers at some time in the future.

When I first started coming to Spain on a regular basis in the early 1990s I’m sure that IVA was much lower than that of the UK and if that is the case then the rate has really raced ahead in recent years. As someone told me last week, at least there is one thing now where Spain is better than the UK, sales taxes here beat even our 20%.

I remember from my economics classes of many years ago that any sales tax was always considered to be a regressive tax as it invariably has a bigger impact upon the poor than the rich and this is just another example where the poor are expected to bail out a system for mistakes that were nothing to do with them in the first place.

That’s an injustice which the present conservative government in Spain (the PP, or Partido Popular) have imposed upon the country and it will be interesting to see if, now that August is over and matters get back to ‘normal’, whether the increase in IVA will be part of the protests when people take to the streets.

But what I want to address here is a hidden, a forgotten or not even noticed, consequence of this tax increase. That is the price hike that smaller businesses, mainly small shops and bars, tag onto the price of everyday purchases.

When the Euro was introduced 12 years ago I remember talking to a taxi driver who was telling me that it wasn’t the major items that saw a price increase in the first few months, it was the morning coffee, the loaf of bread, the olive oil, or the beer at the end of the day where the difference first became apparent.

Those who remember the introduction of decimal currency in the UK in 1971 will understand this completely. For example, the pub I drank in at the time was selling a pint for 2s 6d (equivalent to 12½p) the day before decimalisation but on D-Day itself the price suddenly shot up to 14p. It was a strange sensation to go into your local to be faced with a petition from others who knew earlier in the day what was going on. In that particular pub the price, after all the complaints, was set at 13p, but still a price increase that had no justification whatsoever.

You should remember that this was a period when people were going on strike for an increase in pay of 6 old pence (2½p) per hour, so taken in those terms the increase was not entirely insubstantial.

I’m not really doing a lot of shopping here so don’t have many examples to rely on but I am buying the occasional beer. One bar I quite liked charged €1.40 in August. Yesterday, my first time in there since the IVA increase, the price for exactly the same thing was €1.50.

Using a calculator I found on the net I worked out that, if everything was done strictly as it should have been the pre-IVA price for that beer was €1.19. With the 3% increase on IVA that meant that the price should have been €1.44. If I’ve got the maths wrong please let me know.

So each time anyone buys that beer they are giving 6 centimos to the bar owner. I’m sure that’s being repeated all over Spain as I’m typing this. And almost certainly happened in the UK when VAT increased from 17½ to 20%.

And who takes the blame for this, the government. Now I’m not defending them but are we so used to prices of everyday items going up that we are incapable of analysing and understanding exactly what is happening and that the blame is shared by opportunists in any small shop or bar who looks to make some easy money?

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La lucha continua becomes La lluita continua

Posted on 05/09/2012 by Michael

Activists at the Dia supermarket, Vilafranca del Penedes

Activists celebrate

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La lucha continua becomes La lluita continua

The practice of storming supermarkets, filling trolleys with the basic necessities of life and then leaving without paying is spreading. After starting in a couple of places in Andalusia groups with a similar agenda have carried such activities in Merida, Extremadura and most recently in a town in Catalonia.

I’ve written a couple of times about the groups of people who have invaded supermarkets and taken food without paying in order to then give it to people who haven’t any resources whatsoever and depend upon charity to survive. This in a country that is part of what is supposed to be one of the biggest economic players on the planet.

This is now starting to spread.

On August 24^th 50 or so people invaded a Carrefour supermarket in Merida, Extremadura. They were stopped from taking anything away as the police arrived before they could do so but whether actually taking the goods was the aim of the action is not important. The main reason is to bring to a greater public attention the severe difficulties in which some people are living. All these actions are taken in the full light of day and they often film themselves. If you are interested in seeing a short video of the action follow this link:

http://www.youtube.com/watch?feature=player_embedded&v=1748bdwTgY8

One of the things I found interesting about the particular case in Merida was that although the police wanted to arrest one of the leaders this did not happen as Carrefour didn’t make any accusation against him. This, I’m sure, is a directive from up on high in Carrefour as the company wants to avoid any sort of reprisals such as those called for in the boycott of Mercadona who DID make accusations against those who invaded one of their supermarkets in Andalusia.

Not an expert on law but don’t think that would be the case in the UK. If I understand it correctly in UK law it is not for the ‘victim’ to decide whether a crime has been committed, but things might be different in Spain.

What’s important to remember here is that Andalusia and Extremadura are, and have been historically, two of the poorest regions of Spain, not least as there is little industry and the majority of the population depend upon agriculture or tourism for their living.

In the video you can hear the slogan of ‘The people united will never be defeated’ and they also shouted ‘If there’s no bread for the poor then there will be no peace for the rich’.

In a press conference one of the leaders said that there was ‘no Urdangarin here’ (a reference to the husband of one of the princesses of the Spanish Royal family who is currently under investigation for corruption and dipping into the public purse) and ‘no hunter of elephants here’ (in reference to a picture of the King of Spain, Juan Carlos Borbon, standing, gun in hand, beside a dead African elephant). So no royalists in this demonstration.

Earlier this week, on Monday afternoon, September 3^rd, things spread further afield and a similar action took place in the town of Vilafranca del Penedes, close to Tarragona, in Catalonia.

Another of the big supermarket chains in Spain/Catalonia, this one called Dia, was invaded by a group of people who got away with food to the value of €241.45. This time they attempted to pay with a card that had no credit but took the food anyway. The manager tried to lock everyone in until the police arrived but they found a way out and got the food taken away, only to then wait for the police to arrive outside.

The group in Vilafranca was started in order to assist those people whose homes were being repossessed after they had fallen victims ‘in the good times’ to something similar to the sub-prime mortgage scheme that started the whole house of cards falling in the US. However, they see that homelessness, poverty and hunger go hand in hand and see no contradiction in their previous stated aim and what they did yesterday.

There’s never any attempt to do things surreptitiously as they are all wearing t-shirts saying who they are and what their aim is. It seems the only growth industry in the country is that which produces t-shirts with slogans against the rich and powerful. Some of those present were arrested and they will face the courts on Wednesday of this week but they have already planned a press conference and demonstration before they enter the courtroom.

A couple of thoughts come to mind following this latest event. The first is that some employees of the supermarkets are still putting themselves forward as defenders of their company, its shareholders and their millionaire owners. In my first post about these events I made reference to an open letter sent by an activist to the woman who was so upset about the supermarket raid in Andalusia.

Secondly, I have been told by a number of people I’ve spoken to here in Catalonia over the last few weeks that this region is one of the richest in Spain and, in fact, gives more to the Spanish state than it receives. If this is true (and I don’t have the figures to hand to say one way or the other) then why are the people of Catalonia allowing their own citizens to fall into such a desperate economic situation that they feel they have to take food from the groaning shelves of the supermarkets?

The welfare state in Britain has been under attack since the moment it was established and has been chipped away at in the intervening years. However, although some would like to go even further with more cuts in such spending, in theory, at least, people in Britain should never be allowed to get into such desperate straits.

For more information;

This is a link to the blog of the organisation that organised the ‘attack’ on Monday. It’s a bit confusing, I think, but the ‘Los Videos’ link at the top takes you to a page where there are a number of YouTube videos showing what they have been involved in in the past.

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‘Privatisation’ of Parc Guell?

Posted on 19/08/2012 by Michael

Information Board Parc Guell

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‘Privatisation’ of Parc Guell?

The Barcelona municipal council are considering charging admission for entry into Parc Guell, one of Antonio Gaudi´s gems, in order to get more money from visiting tourists, without improving access or services. This is opposed both by tourists and the local residents.

Parc Guell, to the north of Barcelona, is the green area which offers one of the iconic panoramic views of the city below as well as being the place to see some of Antonio Guadi’s unique designs. If you haven’t yet been able to visit the park then you´d better do so soon if you don’t want to pay.

‘There’s money in them there hills’, according to the municipal government, now in the hands of the CiU party, the right-wing Catalan nationalist party. Every day thousands of tourists visit the park, most seemingly wanting to have their picture taken beside the dragon – which has become the symbol for the park itself. It pains the local grandees that so much money is virtually flowing out of the open gates.

So many people want to visit the area so why not charge them?

Many of the residents around the park are against this virtual privatisation as it would affect them directly and they are also angry that an increasing amount of the park has been paved over, presumably because that makes it cheaper to maintain.

As far as I can remember the park was accessible at all times but when I visited yesterday (the first time for more than 10 years) I was surprised at the substantial gates that prevent access after sunset. This restriction on access would have been instituted by the previous ‘socialist’ local government – who had had control of Barcelona City Council continuously since the death of Franco in 1975 – so a change of government would not necessarily mean a change of policy, if payment is introduced in the near future.

Especially in the peak summer months of July and August Barcelona is teeming with tourists and, as in so many other cities throughout the world, tourism is vital to the local economy. But as is becoming increasingly the case elsewhere, instead of being open and welcoming to visitors the main emphasis seems to be on how to milk them even more.

So far this policy has not had an adverse effect on tourism where surcharges have been introduced already for the mere temerity to want to visit the place, as has happened in Venice. Perhaps people will be prepared to pay ever more to see these places, perhaps not. But it is sad to read, yet again, that politicians consider that almost everything has a price. Don’t be too concerned about the pickpockets operating on the Rambla, it’s the bandits in the town hall who are after every cent you have.

It’s good that the local residents are against charging for entry to Parc Guell. However, one of the lines in their little poster to be seen in the vicinity of the park I find disconcerting. They talk about the ‘poor management of the affluence of visitors’. Does this mean that they don’t care where the tourists are fleeced as long as it doesn’t directly involve them?

March 2014 Update.

It was with a great deal of annoyance that I received the news that you now have to pay for entrance into the park. It was on the day before leaving Barcelona that I was told by Catalan friends that payment was now required to visit the Gaudï structures part of the park, the green space that is the majority of the area is still free to enter.

So the struggle against the privatisation of yet another public area has been lost. I know that the local people were against it but the state, whether local or national, and the greedy and avaricious will never give up until they lose their influence and power. They will always grind us down by their sheer determination to win – we, all too often, give in.

Not having visited Barcelona for more than I year I had missed out on the arguments. I’m sure I’d read that Güell himself had left the park to the people of Barcelona but by maintaining that the green spaces are still freely accessible and by employing a high-flying and expensive lawyer, together with a right-wing administration and judges with fingers in many lucrative pies the privateers have been able to get around whatever he might have desired a hundred years ago .

Not only do you now have to pay there is also a limit of 800 people visiting a day and if you arrive too late you might have a long wait.

Opening times:

25^th October – 23^rd March 08.30 – 18.00

24^th March – 24^th October 08.00 – 21.30

Entrance Fees:

Adults €8.00

Child (7 – 12)/Over 65/Disabled €5.60 – Under 7 free

Tickets can be bought at the ticket vending machines at Lesseps and Vallcarca Metro stations and at various ATMs close to the park, or at the park entrance itself.

7^th March 2014

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