Warning to investors: Spain has problems!

“Beware of investing in Spain,” a journalist on Germany’s n-tv warned some years ago, before the debt crisis hit. “If you invest, you must fire the complete Spanish management...” he went on. And that has its reasons. In fact Spain is blocking foreign investments whenever its possible, by ignoring articles 52-55 of the Rome Treaty and the article 43 EG, that gives all EC-companies the right to open businesses wherever they want in EC. Two famous cases: 

1/ Eon (a German electric-power supplier) wanted to buy Endesa, a Spanish electric-power supplier. That deal was finally blocked by the Spanish parliament “for national reasons”. The head of Madrid’s stock exchange resigned because of that, saying he could not tolerate the action of the Spanish government as it had nothing to do with free trade. 

2/ Ikea, the Swedish furniture firm, wanted to open a store in Alicante. That was blocked by the local government to protect the furniture industry of that region against competition from Sweden. After a long struggle the local government signed the necessary contracts finally.

These two cases happened, although Spain was found guilty of breaking European law by the European Court (Case C400/08, 24.03.2004), as it had made a law to make it more difficult for foreign companies to open their business, if they threaten local companies. But small companies have problems with the Spanish state also. Buying VAT-free inside the EC is guaranteed by European law, but blocked as long as possible.

That Mr de Mesa is “playing down” the Spanish problems is a good description of what is really happening in Spain at the moment. The leadership there has not checked out yet what is really going on. Their nationalism brought the country into the heaviest crises ever in the EC until now – about 50 per cent unemployment of youths, 25 per cent of adults... because their education level is one of the lowest in the world.

In Alicante more than 45 per cent haven’t finished school successfully. And foreign investors (even from the EC) are kept off as much as possible.

Again: If You want to invest in Spain, be very careful!

A Siemund 

Bangkok