Expats in Spain feeling the squeeze
Pensioners currently don’t pay for prescriptions but new measures that have been announced to save €3,700 million in the health care market include a plan for elderly expats to pay 10 per cent of the cost of the medicine. This is capped at up to €20 a month, but joins a range of other increased living costs that have left many expats with less in their pocket. Molly Sears-Piccavey, an expat from Nottingham based in Barcelona and Andalucia, said matters have changed hugely since she arrived in Spain 14 years ago. Pay cuts or freezes or reduction in hours of employment are being discussed by disgruntled Spaniards and expats on the streets every day. “There have been poll tax rises of 10 per cent in my area and even more in other towns in Spain,” she said. She added that there also are many unfinished houses or empty properties without buyers, especially seaside homes, which used to be second homes for many Spaniards. A lot of her friends in the construction industry have now changed jobs or accept lower pay. VAT was increased from 16 per cent to 18 per cent in 2010 and Ms Sears-Piccavey’s particular region has also seen the prices of groceries rise 0.7 per cent in March alone. “Tomatoes have gone sky-high in price over the years,” she said. “It’s basic food in a Mediterranean country." Recent gossip sweeping financial markets speculates that Spain will be next in line to formally request a bail-out from Europe, joining the likes of Portugal, Ireland and Greece. Expats in Spain warned of faulty hip replacements 13 Mar 2012 William Poole of FX Exchange said: “Concern over Spain’s public finances has prompted fear. With yields in and around six per cent, we are perilously close to the seven per cent level where international governments can no longer afford to raise money on the international bond markets. Simply put, the higher the yield, the more expensive it becomes to raise money.” Spain’s economy is more than five times larger than Greece and the country that once created one in three eurozone jobs now has the highest unemployment. But Mr Poole says that a bail-out is unlikely – at the moment – as there is still room to turn the situation around. “In reality, Spain is in much better shape than rising yields imply, and with the current account shrinking, and falling labour costs boosting exports, it is clear that Spain’s new government have shown great political will in implementing deficit cutting measures,” he said.
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