Spanish Prime Minister Jose Luis Rodriguez Zapatero has called a general election for November, four months earlier than expected.

He said this would enable a new government to confront Spain's economic problems from January.

Hours earlier, a credit rating agency warned it might downgrade Spain's rating due to weak growth prospects.

The opposition has demanded an early vote since May, when Mr Zapatero's Socialist Party lost in local polls.

"Early elections are what the majority of the electorate wanted, so this is good news," said Mariano Rajoy, the candidate of the main opposition Popular Party.

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I want a new government to take control of the economy from 1 January next year... fresh from the balloting”

Jose Luis Rodriguez Zapatero
Eurozone in crisis graphics
It argues that a change of government is the only way to recover market confidence in the country.

Mr Zapatero will not be seeking a third term as prime minister, and opinion polls suggest his Socialist Party - led by former Interior Minister Alfredo Perez Rubalcaba - will lose.

Economic recovery?
The government's borrowing costs have risen in recent weeks, despite agreement on a second EU bailout package for Greece, reflecting the fact that investors still worry about the weak state of Spain's economy, says the BBC's Sarah Rainsford in Madrid.

Mr Zapatero said he was calling an early election - now set for 20 November - in order to "project political and economic certainty" over the months to come.

"I want a new government to take control of the economy from 1 January next year... fresh from the balloting."

He made his announcement after a speech in which he stressed that the economy was on the road to recovery, citing seven consecutive quarters of growth, and a recent decline in unemployment.

But 46% of young Spaniards remain out of work - and the overall unemployment rate is twice the European average.

There is concern too over the level of debt in Spain's regions, and the health of the banking sector, our correspondent says.

The international ratings agency, Moody's, has just warned that it is putting Spanish government debt on review, for a possible downgrade from Aa2 to Aa3.

elBulli, the beachside Spanish restaurant repeatedly crowned the world's best, will close Saturday

elBulli, the beachside Spanish restaurant repeatedly crowned the world's best, will close Saturday after pushing the boundaries of cuisine for more than two decades under chef Ferran Adria.

The remote eatery in Cala Montjoi, some two hours north of Barcelona, will re-open in 2014 as a non-profit culinary think tank that will investigate new cooking techniques and develop new flavours.

The elBullifoundation plans to grant between 20 and 25 scholarships annually for chefs to spend a year working with elBulli's core staff. It will share its ideas and findings on the Internet.

Adria, whose radical innovations since he became the head chef at elBulli in 1987 include foie grass noodles and potato foam, says he is dispensing with the Michelin three-star restaurant to spend more time being creative.

"elBulli is not closing, it is transforming itself, because its soul is going to remain," he told a group of students in Valencia earlier this month.

Under Adria, the eatery, known as El Bulli until 2008, has never been a commercial restaurant in the strictest sense.

Shortly after becoming head chef, Adria decided to open the restaurant for just half the year to give staff to develop his trailblazing approach to cooking, which uses hi-tech methods to "deconstruct" and rebuild ingredients in surprising ways.

In 2001, just as El Bulli was becoming well known, he decided to close the eatery for lunch to give staff even more time to be creative in the kitchen.

The 50-seat restaurant fields more than two million requests a year for its roughly 8,000 sittings, with tables mostly alloted by form of lottery.

Dinner is a degustation menu of some 40 small dishes and it costs around 250 euros (360 dollars) per head.

The final dinner on Saturday night will be served to longtime staff members of the restaurant and their families.

But despite its popularity, the restaurant was losing half a million euros ($700,000) a a year, Adria said during an interview with AFP last year.

The 49-year-old makes up the shortfall through a series of elBulli spin-offs, including books, a range of kitchenware, speaking engagements and by lending his name to a range of brands, from olive oil to cutlery.

The restaurant is credited with helping to transform Spain from a culinary backwater to a world leader.

Britain's Restaurant magazine ranked elBulli to be number one on its list of the world's top 50 restaurants for a record five times -- in 2002 when the list was first published and between 2006 and 2009.

"It is not the best restaurant in the world because that does not exist, but it is today the most influential place in the world in terms of cuisine, and especially when it comes to creativity," Adria said last week.

Veteran Barcelona restaurateur Ramon Parellada, a personal friend of Adria's, said the closure of elBulli would free up the chef.

"All this exuberance and creative capacity, which gave our sector innovation and creativity in a way that was never done before, will no longer be the target of the criticism that was levelled at the restaurant," he said.

While some critics have described Adria's food as the best they have tasted, he has been criticised as elitist and pretentious -- and even a health hazard.

Paris-based German food critic Jorg Zipprick, the author of "The Unappetizing Underside of Molecular Cooking", says Adria's creations should carry health warnings informing diners of the additives in dishes.

"While it is true that Ferran Adria introduced a great deal of creativity to the kitchen, he also opened the door to additives and aromas from food industry laboratories which have now firmly conquered a place in the restaurant business," he said.

Bristol schoolboy breaks his neck on holiday

17 year old Bristol schoolboy is waiting for a spinal operation at the Arrixaca Hospital in Murcia, after breaking his neck diving into a swimming pool while on holiday with friends.

Craig Nurse had the accident on Thursday last week, and friends jumped in to rescue him after he knocked himself unconscious.
His mother and father have flown out to Murcia to be at his bedside.

It was hoped the surgery could take place earlier this week, but the Bristol Evening Post reports it has been postponed because of swelling. His Grandmother Margaret told the paper that doctors had said the injury is serious, but they are hopeful of him making a slow but full recovery.

 

Man arrested for aggressive behaviour to gay couple in a Madrid restaurant

53 year old man who is accused of assaulting a gay couple he saw kissing in a Madrid city centre restaurant spent Sunday night in police cells and has been charged with causing bodily harm.

The suspect was eating in the restaurant with a companion at lunchtime on Sunday when he allegedly threw a glass of water at the couple after seeing them kiss. He is reported to have shouted at them, ‘Do you not have any shame? It’s a lack of respect that I should have to see this’, before throwing a cup of coffee which hit and injured one of the men, causing a wound which needed four stitches.

EFE reports that he was also heard saying during the meal, according to the official police complaint, ‘I hate gays, I can’t bear them because I pay my taxes’.

Arturo C.A., who was eating in the restaurant with his boyfriend and a friend and placed the complaint, said the assault happened without any provocation. ‘It’s incredible,’ he said, ‘that this type of thing still happens’.

He said it was the first time that he had ever been subjected to homophobic behaviour.

 

Ibiza-Manchester flight diverted to Mallorca after engine catches fire

plane which took off from Ibiza for Manchester on Thursday morning had to make an emergency landing in Palma de Mallorca after one of its engines caught fire.

AENA Spanish Airports said in a press release on Thursday afternoon that the aircraft landed safely and none of the 180 passengers or crew were injured.

The emergency alert for the Jet2 Boeing 738, flight EXS170, went out 26 minutes after takeoff from Ibiza and emergency services were standing by on the tarmac when the plane landed at Palma 51 minutes later. The aircraft landed without incident and none of the crew of passengers needed medical treatment.

Diario de Ibiza reports that witnesses heard a loud noise from the aircraft shortly after takeoff and then saw flames coming from one of its engines. It’s understood that two more explosions were heard as the plane made a control flight around Ibiza Airport

 

In the hills outside Madrid there is a striking symbol of four decades of dictatorship.

The Valley of the Fallen is the vast monument General Francisco Franco commissioned to commemorate his victory in the Spanish Civil War.

Seventy-five years after that war began, there are finally plans to change this landmark.

At its heart is an enormous basilica, scooped out of the hillside. Franco himself is buried behind the altar, beneath a gravestone decorated with fresh flowers.

The Valley has long been a rallying point for the far right in Spain, built to exalt the armed nationalist uprising Franco led against the elected Republican government, his "glorious crusade".

Now the Socialist government is considering exhuming the dictator's remains in order to transform the site into a place of reconciliation.

'Prudence'
Even 36 years after Franco died the government minister in charge admits that is a delicate task.

"Spain's transition to democracy was an act of prudence after the deep wounds caused by the war and the dictatorship," Ramon Jauregui explains.

"We have dealt with the past little by little. Maybe we're tackling this site a little late, but prudence has been the key to our peaceful transition."


A huge number of people will oppose this barbarity”

Jaime Alonso
Vice President, Franco Foundation
Spain held no truth and reconciliation process after the war; there was no accounting for crimes, or punishment. The country agreed to "forget" and look to the future, for the sake of peace.

But as the fear has faded, that approach has been changing.

For the past decade, archaeologists and volunteers have been exhuming the remains of Republicans from unmarked graves. (The bodies of most of those who died fighting for Franco were recovered long ago.)

Then in 2007, the government passed the Historical Memory Law, granting victims of the war and dictatorship formal rehabilitation and compensation. All remaining monuments to Francoism were to be removed.

But Spain's conservative opposition party, the PP, refused to back the bill. There was talk of opening up old wounds.

"There are people in Spain who are afraid of being confronted with the darkness of the past," explains historian Angel Vinas.

"There were horrors committed here, massacres. But we're not unique in that and other countries have come to terms with it. I don't see why Spain should not," Mr Vinas says.

For him, reforming the Valley of the Fallen is all part of the process.

Hidden past
The monument was one of the most visited sites in Spain. But it has no signs explaining its history and no mention that it was built largely by political prisoners.


One suggestion is to move Franco's remains to a more modest site
Nicolas Sanchez Albornoz was one of them - a student activist sentenced to six years in a labour camp for "activities against the state". He escaped in 1948 and has never been back.

"I think it is really shocking that in a European country you still have a huge monument to the memory of one of the bloodiest dictators," says Mr Sanchez, now in his 80s.

"The best thing to do is to remove all the symbolism [from the site]. And what gives such force to that symbolism, is the presence of Franco."

The government is waiting for an expert commission to deliver its proposals before deciding.

But one suggestion is to transfer Franco's remains to a modest, municipal cemetery beside his wife. His daughter has already objected, and the Franco Foundation she heads has vowed to take legal action to prevent it.

"A huge number of people will oppose this barbarity," insists Jaime Alonso, in a room plastered with photographs of Franco, and a life-size portrait. He argues the general's revolt saved Spain from the clutches of Soviet Russia.

"They can't move Franco without his family's permission, that would be desecration. You have to be careful with history in Spain. You can't demonise one part of society and praise the other. That's wrong and achieves nothing," he warns.

Government's challenge
Few Spaniards are so open in their admiration of Franco. But many voice the same aversion to moving his grave.

"It's a ridiculous idea, after all this years," says Jose Luis, on a visit to the Valley of the Fallen. "That way we'll just keep the war going!"

"This is just tampering with the past," Jorge agrees. "And the monument is very beautiful."

For the losers in the war, though, it's quite the opposite.


Fausto Canales' father was shot by Fascists, and his remains are in the Valley
In August 1936, Jorge Valrico Canales was taken from his home in the middle of the night and shot by a Fascist execution squad. His town had fallen to the uprising and he had been singled out as a socialist.

In 1959, his remains were dug from a well and moved to the Valley of the Fallen. More than 30,000 war dead from both sides were transferred there on Franco's orders.

"For me, it's excruciatingly painful that my father's remains are in a place built to the glory of the victors in a military coup," says Fausto Canales. "It feels like a double crime. First when he was executed, then when they moved his body without our permission to a place which is totally inappropriate."

The family is one of a group now demanding they be permitted to exhume their relatives' remains for a proper burial, though a study suggests that might be impossible now.

The challenge for the government is to transform the divisive monument into one for all Spaniards.

"Changing perceptions is not easy," Ramon Jauregui admits. "But if this place is to have a future it must be in remembrance of the horror of the war and all its victims."

Seventy-five years on, that would be the first of its kind here.

 

Spanish Workers Scramble to Learn English in Economic Crisis

Around the world, many workers are scrambling to learn English to find jobs and stay competitive in the economic crisis. An English learning boom is perhaps most pronounced in Spain, which has long lagged behind the rest of Europe in terms of English proficiency. With Hollywood movies dubbed in Spanish and a brisk trade with Latin America, Spain has not had the need to learn English - until now. Globalization and now a recession, though, have sparked a run on English classes in Spain.

Surf the television channels in Spain and you might find American films dubbed over in Spanish or news reports from Latin America. But one of the few English voices you hear on Spanish TV is this one.

Richard Vaughan is originally from Texas, but has lived in Spain for 35 years. He runs the country's biggest English teaching company, which has its own TV channel, called 'Aprende Ingles.' It is Spain's only national channel in English. Vaughan explains why he thinks so many Spaniards tune in to his TV channel and take his English classes.

"To get a better job," he said. "People don't learn English here for cultural reasons. Some do. But the motive is always, 99 percent of the time, professional."

Globalization has led to more people working abroad, often in countries where they cannot speak their native tongue. Now a recession is speeding up that process, as people search for work outside their home country's borders.

"People realize that they're not only going to have to be mobile out of choice, but they're going to have to be mobile because of necessity," said Nick Byrne, the director of the London School of Economics' language center.

"We found that, in our university language centers across the U.K. and indeed across Europe, that language learning is up," said Byrne.  "We're not talking about people doing a whole degree in languages, but people going on evening courses - English courses particularly."

In Spain, some of those studying English are looking for jobs abroad, in Britain or the United States, but others want to work for multinational companies with offices here in Spain. Many companies now require workers to be bilingual.

Dominic Campbell is an American living in Madrid who works as a part-time English teacher. He says his students are trying to brush up on English in hopes of getting a better job.

"A lot of jobs now are actually mandatory that you know at least two languages, and a lot of them actually want at least Spanish and English," said Campbell. "And, a lot of them are asking for Spanish, English and French - especially airlines."

Compared to other European countries hard hit by the economic recession, Spain has one of the lowest rates of English proficiency. That is because for so long, learning English was not a necessity. About a fifth of the world's population speaks Spanish. There is a huge market for Spanish TV shows and movies, and Spain has long done a swift trade with Latin America - in Spanish.

Campbell said many of his students assumed they could get by in life speaking only their native tongue.

"They just think, you know, 'My English is poor, I don't want to speak it, I don't want to learn how to speak it. I've got Spanish, that's all I need.'"

But more than one in five Spaniards is jobless. Spain has the highest unemployment rate in Europe. Among people in their 20s, more than 40 percent are out of work. Iñigo Gomez is one of them.

"It's really difficult right now," said Gomez. He has a degree in education, but cannot find a job at a school.

"I'm a teacher, and I couldn't find a job here. So I think it's a good idea to go to the United Kingdom and try to find a job as a Spanish teacher," he said.

Gomez has trouble translating his thoughts about the past few years and about the economic crisis into English.

"I don't know exactly the right word. Globalization? So if you have a second language, you will get more possibilities to find a job."

While Gomez heads abroad, many of his classmates - Spaniards learning English - will stay in Madrid, slowly spreading bilingualism across their country for the first time.

 

British woman Jodie Nieman dies in Ibiza

20-year-old British woman has died while on holiday in Ibiza.

Jodie Nieman had been at the Space nightclub in the Playa d'en Bossa resort on the island's south east coast when she fell ill.

An ambulance was called in the early hours of Wednesday.

The woman, of Croydon, south London, was taken to the Can Misses hospital, suffering a cardiac arrest but died shortly after she arrived.

She had been staying in an apartment in the resort with a group of female friends, who accompanied her to the hospital by car.

Police said they were waiting for the results of her post-mortem examination.

A spokeswoman for the Civil Guard in Majorca said: "Police are investigating the death of a British woman. At the moment we cannot confirm the cause of death."

A Foreign Office spokeswoman said: "We are aware of the death of a British national in Ibiza in the early hours of this morning and are providing consular assistance to the family."

 

Six Spanish banks fail European stress tests

As many as six Spanish banks have failed the European stress tests, including five savings banks and one medium-sized bank, ABC newspaper reported on Tuesday, citing unnamed sources.

The European Banking Authority (EBA) will publish stress test results for 91 of the region's top lenders on Friday afternoon.

Spain's Economy Minister Elena Salgado said on Monday some banks had failed the tests as generic provisions - cash put aside by the banks to cover potential losses - would not be counted as core capital.

Spain's banks held some €27 billion in generic provisions at the end of March.

Nobody at the Bank of Spain was immediately available for comment.

 

Birthday dad now accused of Spanish police murder

A suspected terrorist arrested over a plot to assassinate the King of Spain celebrated his daughter’s birthday just days before his "ordinary life" ended.
Eneko Arronategui was known as Cyril Macq by neighbours in Arbury.
But unknown to them he was also suspected of being one of Spain’s ‘most wanted’, on the run for as long as 14 years.
On Thursday he was arrested for a raft of alleged offences including murdering a Spanish policeman and attempting to kill Juan Carlos II.
During a botched grenade attack in Bilbao in October 1997, the police officer was killed near the Guggenheim Museum.

Photo of Arronategui released by Spanish authorities
Arronategui, 44, lived in Fortescue Road, in Arbury ward, with his two young children – pupils at Arbury Primary School – and their mother.
On Sunday they celebrated their daughter’s 5th birthday – but days later their quiet life was shattered when armed police raided their house.
Alison Flack, who knows the family, said: “My only experience of this family is that of a loving, tight family, friendly and unassuming.
“My daughter spent Sunday at their house at their daughter’s 5th birthday party and had a wonderful time.
“I am also aware that there are two small children whose lives are now going to be turned upside down, who will have no understanding of why their daily routines, school friends and home life have been taken away from them.
“My thoughts are with them, and hope that they are in a safe and loving environment.”
A burst balloon from the party now hangs on the wall near the back door of the home.
Evidence of family life remained, with a trampoline, sandpit and children’s chalk marks on a wall where they had played noughts and crosses.
The suspected member of terrorist separatist group ETA lived a quiet existence as a father, polite neighbour and a respected work colleague at Play.com in Histon.
He was also membership secretary of Cambridge Squash Club in Histon Road.
Friends and neighbours told of a “very friendly guy” who went on weekend cycling trips with his partner and their two children.
He is accused of hijacking a lorry and two cars after gunning down a policeman following the attempt on the king’s life in Spain in 1997.
Speaking yesterday while his friend awaited possible extradition to Spain, neighbour Neville Doe, 40, a governor of Arbury Primary School, told the News: “He was just an ordinary, regular guy and very friendly. He would go out with his partner and two children on their bikes at the weekend.
“He was keen on keeping fit and I asked him where he went running. He told me he went to the lake near the Holiday Inn Hotel off the A14.
“There was nothing really to raise any suspicions. He never spoke about politics. I just find it incredible he had allegedly lived such a dramatic life like something out of James Bond. I feel so sorry for the children.”
The Spanish national spent the past five years working as a computer programmer providing IT support for online retailer Play.com.
He will next appear in court via video link from prison on July 25 for an extradition hearing. The Spanish authorities have applied to have him deported to his homeland, but he is fighting the warrant.

 

The clouds over the initial public offerings of Bankia and Banca Civica are getting darker.

The clouds over the initial public offerings of Bankia and Banca Civica are getting darker. The two caja savings banks, who have to raise equity to meet new capital requirements, already faced investor scepticism over their real-estate exposure. Now they also have to battle the storm over the country’s sovereign risks.

Fears of Spain following Greece, Portugal and Ireland into a bail-out increased on Thursday after the Greek situation remained unresolved at talks in Paris and following Moody's downgrade of Portugal. The country sold five-year bonds but had to pay 4.8%, the highest level for a five-year issue since 2002.

The country’s benchmark 10-year bond yields jumped to 5.7%, the highest since May 2000, according to Bloomberg data. Portugal was pushed into a bail-out after its borrowing costs surpassed 7% for weeks, considered an unbearable cost for almost any country.

Despite the negative sentiment, Bankia and Banca Civica are pressing ahead with their simultaneous road shows. Moody’s said yesterday it rated Bankia as “Baa2,” two levels above “junk,” and also placed a negative outlook on the lenders’ credit rating, due to the quality of its books. Blackrock, the world’s biggest investor, placed a “strong dislike” rating on Bankia, according to a document seen by Financial News.

Moody’s said: “Moody's believes that the bank's capital base continues to remain vulnerable to further expected losses under Moody's scenario analysis, especially given Spain's uncertain economic outlook and the uncertainties within the real-estate sector. Furthermore, Moody's expects that this very challenging domestic operating environment will continue to subdue growth and exert downward margin pressures arising from the high level of non-earning assets and increased funding costs. This is likely to limit internal capital generation from recurrent sources.”

The domestic situation could worsen as other cajas may have to be nationalised, after failing to raise the funds they need to meet the new capital requirements. CAM, UNIM and Catalunya Caixa are particularly under threat, more than three bankers involved in the domestic banks’ restructuring process told Financial News. More than a dozen potential investors have looked at CAM, including Barclays Bank, but none was interested, the three bankers said.

Investors fear the cajas have not revealed the true value of their loan books.

Antoni Valverde, a partner at Freshfields in Barcelona, said: “The cajas have not written down all of their bad debts as Spanish law doesn’t require them to do so until an insolvency process has been declared.”

The tension is unlikely to decrease next week, as the new European Banking Authority is expected to unveil the results of the Europe’s bank stress tests.

Almost one-third of Europe’s 91 banks may need more help, Moody's said yesterday.

Credit Suisse Group (CS) said it is hiring three bankers for its Spanish private banking arm, in a bid to bolster its business with Spain's wealthy.

The Zurich-based bank is hiring former M&G Valores analyst Mariano Alierta Sancho and former Caixa and Morgan Stanley (MS) private banker Rocio Ceron Sanchez as client advisors, as well as UBS AG (UBS) banker Veronica Lopez-Ibor Vega-Penichet for the fund management arm of its private bank in Spain.

The positions are new ones, a spokeswoman for the bank said.

"We continue to be proactive about monitoring the size of our business relative to client opportunities and market conditions. This involves realigning resources to growth areas and adjusting capacity to meet client needs and to manage costs across the business," the bank said in an email.

Spain is one of the main strategic European markets that larger Swiss banks such as Credit Suisse have begun tapping, as offshore business in Switzerland shrinks.

Spain's heavily indebted professional soccer clubs need a new management model that is better suited to the current period of economic stress,

Spain's heavily indebted professional soccer clubs need a new management model that is better suited to the current period of economic stress, secretary of state for sport Albert Soler said on Wednesday.
"We have arrived at a moment when we must reassess whether our soccer model is valid," Soler said in a speech to the Spanish soccer federation's (RFEF) general assembly.
"I want to urge those responsible to adjust the management (of clubs) to the times we are living in," he added.
"I believe it is the time to define, to be the best at a sporting level but also at a management level in the world of soccer. This will be achieved with contributions from all."
Many of Spain's top-flight clubs have been living beyond their means in recent years, spending huge sums on players' wages and transfer fees to try to remain competitive and accumulating crippling debts.
Some, such as first division sides Real Mallorca and Real Zaragoza, are in administration, along with all three teams that were promoted from the second division at the end of last season, Real Betis, Rayo Vallecano and Granada.
Analysts have accused the soccer authorities of sitting on their hands, while the Socialist government's position has been that the problem must be resolved by the clubs themselves without new legislation.
A study by a professor of accounting at the University of Barcelona published last month showed that the 20 clubs in the top flight made a combined net loss of some 100 million euros ($144 million) in the year to the end of June 2010, up from 19 million in the year-earlier period.
Total debt fell slightly from the previous year, to 3.43 billion euros, but was still more than double revenue of 1.61 billion euros.

British pensioners and holiday home owners are finding themselves trapped as buyers hunt for a bargain.

‘There are bargains everywhere, although the market seems to be bottoming out,’ says Kim Brown, a partner in the international payment specialists Smart Currency Exchange, talking about prices for holiday and retirement homes in Spain.

‘There are a lot of British owners who want to come home [to the UK] and they are now prepared to drop prices just to get out. But some cannot. Much depends on the value of their loan.’ In other words, prices are such that even if they did manage to sell their homes, they would not be able to repay the mortgage.

While property prices in France continue to rise, property in Spain has been an unmitigated disaster. The value of property in France rose by 8.7% between the first quarters of 2010 and 2011, while values in Spain fell by 5.3%, according to the Organisation for Economic Co-operation and Development (OECD) that promotes economic and social development worldwide. 

‘I would not say that prices in Spain have bottomed out, but a lot of people are looking for bargains,’ says Tom Whale of online property agents Rightmove. ‘Last month, we had 350,000 searches for properties in Spain.’ And there are bargains to be had. Estate agents Connells, for example, is currently advertising properties at half price after striking a deal with the banks to sell off repossessed homes.

Prices slide 30%

The latest Spanish property report from independent house price index compiler Tinsa shows that the general Spanish Real Estate Market index (IMIE) continues to slide. In May, the index recorded a 5.9% year-on-year decline in prices, compared with 4.4% in April. The general index fell to 1,794 points, a level last seen in May 2005.

In May, properties on the Mediterranean coast were at the forefront of this trend falling 8.1%, followed by the major cities at 6.7%, and the Balearic and Canary islands at 6.6%. In the same month, the cumulative fall in prices from the highs of 2007 exceeded the 20% mark for the first time at 21.5%. Over this period, the Mediterranean coast properties top the list again with a 27.8% decline in value, according to Tinsa, but some estate agents are reporting falls of up to 30%.

The situation is most painful for UK pensioners who retired to Spain, some of whom have seen the value of their property drop by as much as 50%. Their situation is made worse by the fact that sterling has fallen against the euro by around 25% since the credit crunch. This means many British pensioners are trying to survive on an income that is 25% less than when they first left the UK.

Their situation is not being helped by the volatility in the markets. According to foreign exchange dealer HiFX, the worth of a monthly pension income of £628 will have fluctuated between €756 in January and €698 in May, a difference of €58.

And things are not about to get any easier for homeowners in Spain, says Mark Bodega, director at HiFX. ‘Looking ahead, we see the potential for sterling to weaken [further],’ he says.

Buyers’ market

All of this is very bad news for those who own Spanish property and want to get out. But for buyers there are bargains and financing deals to be had. In an attempt to move properties, many of the developers have arranged finance with the banks that initially lent them the development money and agents report that there are 80% and 90% mortgages available.

Spanish real estate website Property In Spain, for example, is offering two bedroom, front line golf apartments in Polaris World, at Costa Calida on Las Terrazas de la Torre, from €96,180 with a 100% mortgage. Or for those who want more space, you can buy a repossessed six bedroom, six bathroom, luxury Vistal Mar Duquesa villa on the Costa del Sol that is within a five minute drive of the beach for €525,000 – down from €735,000 – once again with a 100% mortgage.

200 chanting protesters gathered in a Madrid neighbourhood on Wednesday, preventing the eviction of an unemployed woman and her two children, one of whom is disabled.

The demonstration was part of a new wave of protests sweeping Spain, in which groups gather at unemployed people's homes to block their eviction, raising pressure on politicians to help a million Spaniards struggling to pay their mortgages.

The movement gathered steam in May as part of the "indignados" (indignant) protests against the government's spending cuts, failure to revive the moribund economy, and the European Union's highest unemployment rate of 21 percent.

"With the housing bubble burst and unemployment rising, people have had to make a choice -- either they feed their children or they pay the mortgage," said protester David Cobo, a member of a mortgage victims' group called Affected by the Mortgage, shouting above the noise of the crowd.

There are several such protests around Spain every week, organised through social media. In dozens of cases crowds have successfully blocked entry to the building, making it impossible for an official to deliver a court order for eviction.

Of around 300,000 people kicked out of their homes in the last two years, most are among Spain's nearly five million unemployed. Unemployment benefits stop after about two years, leaving many with little or no income.

Last week the government announced measures to help those struggling with high mortgage payments, but consumer advocates said the moves would help only a handful of those pushed to their financial limits.

The ruling Socialists are likely to be defeated in elections due by March 2012, and officials have begun criticising the banks, the major mortgage lenders. Consumer groups dismiss their attacks as mere rhetoric.

Opinion polls show most Spaniards, on both left and right, feel the political class has failed to provide real solutions to the economic crisis.

The government's borrowing costs have soared as international investors worry that Spain could head into a fiscal crisis and need a bailout, like Ireland, Greece and Portugal. The government has responded by cost cutting that has angered Spaniards and hampered economic growth.

HOUSEHOLD DEBT BURDEN

The value of mortgage debt roughly doubled in the five years to 2009, according to Bank of Spain data, as Spaniards were enticed onto the housing bandwagon by easy loan conditions.

"Everyone speculated in some way, giving the impression that prices were going to keep on rising for ever," said Fernando Encinar, analyst at real estate firm Idealista.com.

Property prices have fallen 16 percent in Madrid since the peak of the boom in 2007, and the drop makes it impossible for many to sell their homes without remaining saddled with debt.

Under Spanish law, if a bank forecloses on a home and evicts the borrower, the former homeowner still owes the balance of the mortgage to the bank.

That has kept the property market from an even sharper fall, as borrowers try to hang on to their home no matter what. As a result the Spanish banking sector has stayed afloat, though badly in need of capital .

The overall national level of bad mortgage debt is very low at 2.6 percent of total mortgages, as Spaniards struggle to keep up repayments by renegotiating terms or digging into savings.

"The main problem is not that Spain's (mortgage) law differs so dramatically from other countries. The issue is that Spain has been so much more exposed to the property bubble, and that prices have started to come down while unemployment has gone up massively," said Idealista's Encinar.

Conventional wisdom in Spain has always been that renting was throwing money away. Spanish home ownership is high compared with other countries at 85 percent, according to property firms.

That makes it difficult for any government, of left or right, to draw up a policy which takes the steam out of property prices.

MAKING ENDS MEET

Banking customers' association ADICAE estimates that more than one million families face severe mortgage payment problems, and says many Spaniards are eating in soup kitchens so they can keep up their mortgage payments.

Anti-eviction groups have managed to stop banks and lawyers from repossessing property in dozens of cases, though banks often serve a new notice of eviction some months down the line. So far there has been no violence and police involvement has been limited.

"I'm here because I'm sick of the same people always being at risk while the banks always seem to get away with it," said Javier Gallego, a 41-year-old sound technician who took part in Wednesday's protest in Madrid.

Official data released on Wednesday showed the property hangover could continue for years to come, with about 700,000 properties still empty across Spain at the end of 2010, three years after the boom ended.

Spanish police rescued a 48-year-old Dutch woman who had disappeared 18 days ago while hiking in southern Spain.

A group of mountaineers discovered Mary-Anne Goossens trapped near the resort town of Nerja and alerted authorities. She was airlifted to a nearby hospital where she is stable and doing well, a hospital spokesman said.

Goosens, mother of two, was rescued from the bottom of a ravine and survived by drinking water from the banks of the ravine, Spanish media said

Tourist attacked outside York Minster

The South African was hit repeatedly over the head with a rock or cobble after a stranger struck up conversation with him at around 8.30pm on Friday, police said.
Witnesses dialled 999 and the pair were found in the Deans Park area.
The victim was taken to York District Hospital for treatment to a serious head injury and damage to his hand. He has since been released from hospital and his injuries are not believed to be life-threatening.
North Yorkshire Police said officers arrested a 43-year-old man from Tadcaster at the scene on suspicion of attempted murder.
He was charged with attempted murder on Saturday and was remanded in custody to appear before York Magistrates' Court on Monday.

 

1 dead, 4 injured in Spain arms factory explosion

An explosion at an arms factory in central Spain used mainly to dismantle cluster bombs killed one person Saturday and wounded four others, one of them seriously, an official said.
Two rescue helicopters were deployed to the factory just outside the town of El Gordo in Castilla-La Mancha, 175 kilometers (110 miles) west of Madrid, and a wounded person was flown to Getafe hospital in the capital, a regional Interior Ministry spokeswoman said on condition of anonymity in keeping with ministry rules.
Three people were taken to a hospital in Navalmoral de la Mata, a nearby town in the neighboring region of Extremadura, and roads to the factory had been closed off by local Civil Guard officers, state television said.
The cause of the explosion was under investigation. State TV reported it is believed to have occurred in an incinerator furnace used to destroy bombs. Calls to the factory went unanswered Saturday afternoon.
State TV said the facility was used by the Defense Ministry to decommission cluster bombs.
Cluster bomblets are packed by the hundreds into artillery shells, bombs or missiles, which scatter them over vast areas. An international treaty banning the weapons took effect last year, and 58 states are party to it, including Spain.
The origin of the bombs being destroyed was not known, but Spain has manufactured cluster bombs in the past.

 

Married couple defraud their wedding guests in Ciudad Rodrigo

A newly married couple has been arrested in Ciudad Rodrigo, Salamanca, after they defrauded the wedding guests.

They asked the guests for their personal data and DNI identity cards using the excuse that Valladolid Ayuntamiento wanted them to formalise the wedding, and then used the data and other falsified documents to obtain mortgage credits.

The Gaceta de Salamanca reports that the Guardia Civil think that as many as 100 people have been defrauded in the Ciudad Rodrigo district and in Medina del Campo, Valladolid.

The Guardia Civil codenamed their work as ‘Operación Enlance’ and say that two disabled brothers with 70% incapacity were among those defrauded.

The couple even carried a portable scanner with them, so that it was easy for them to copy the guests’ documents. The man claimed that he had some extra watches from the company where he works, but he needed the DNI to justify to his boss giving them as gifts.

The couple have been released on bail and with charges remaining after making a first declaration to the judge.

 

12 Spanish football clubs are to lose their category in the league and will be relegated because they have been unable to pay their players.

They teams are Alicante, Castellón, Cultural y Deportiva Leonesa, Ejido, Palencia, Rayo Vallecano B and Universidad de Las Palmas GC, which now all fall to the Third Division.

Benidorm, Cerro Reyes, Unión Estepona, Jumilla and La Muela fall even further from the third and lose the category of being in the national league, and return to their regional competitions.

It comes as part of the General Rules of the Spanish Football Federation which says that the clubs of the Segunda B division have to fully meet or guarantee their contracted economic obligations with their players, technicians or other clubs. Those who do not meet that requirement are relegated to the third division under rule 192.2.b.

It’s a clear indication of the economic problems in Spanish football in the lower divisions. In a separate move some players from clubs in the Liga BBVA and Liga Adelante have started legal action to obtain their wages. The time limit for others to make a denuncia ends on July 31.

Spain: Libya war may be al Qaeda weapons source

Spain's interior minister says he and EU colleagues are worried that Libyan army weapons are being trafficked and possibly sold to al Qaeda's affiliate in North Africa.

Alfredo Perez Rubalcaba said al Qaeda of the Islamic Maghreb, or AQMI, is a growing threat that could conceivably spread outside its home of the Sahel region of Africa.

He briefed reporters Thursday during a break in a meeting with colleagues from five other EU countries and U.S. Homeland Security Secretary Janet Napolitano.

Perez Rubalcaba says fairly sophisticated weapons from Libyan army forces fighting to keep Moammar Khadafy in power are being sold by traffickers at Libya's southern border and possibly ending up in the hands of AQMI.