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Are you staying informed?

By Gareth Horsfall
This article is published on: 23rd April 2020

23.04.20

What is your barometer for political talk? Where do you go to get informed? I think most people would say that polls are a useful, if often wrong, source of information, then there are the International Monetary Fund reports, the European central bank forecasts, newspapers, economic reports, financial institution analyses (which are basically economic reports) etc. I worked out some time ago that most of these were self serving and although some of that information is useful it shouldn’t ever be a real gauge for what the average man on the street is really thinking or doing.

For me, I get that information some where else….mercato Trionfale in Rome where I do my weekly food shop. I find it a hub of differing opinions and characters that all have something to say on the state of the country, world politics and the health of their country. OK, I admit it is probably not quite as well reseached as the other methods mentioned above, but I do find it gives a different perspective on what people are thinking.

Pension Transfer from the EU Institutions

However, whilst writing this I stand humbled because I attended a webinar on the state of the EU, which I will write about for you here. The webinar was hosted by a large Assurance company called Utmost and they had as their

guest speaker a man named Ashoka Mody. I openly admit I had never heard of him before but he has a string of book titles to his name, a career at the World Bank and also influence in the EU’s bailout of Ireland in 2009. The reason I stand humbled is because he was a pretty straight talking economist, it would seem. He had very strong opnions on what is likely to happen in the EU as a result of the Covid 19 crisis and particularly how the crisis will develop in Italy, which is, of course, very important to a lot of us.

So without further ado, here goes my summary that webinar and the evolving situation and some of the thinking about the future of ‘Il bel paese’ and the European Union.

Where is the money going to come from?

Let’s start by saying that whatever predictions are currently being made about the financing needs from the effects of COVID-19, the true reality is that it is likely to be a hell of a lot more than we think. It is likely that the global effects of COVID-19 are going to be felt long after the virus disappears (assuming it doesn’t make a return in the winter) and to return to normal the best estimates are that we will need at least 2 years for travel, business and supply chain to return to pre virus levels

At the moment there is little point looking much further than 2020 as this is so unprecedented no-one really has any answers, but the realistic thinking at the moment is that the cost for BOTH Italy and Spain will be upwards of 20-25% of their GDP in 2020. In monetary terms that is a potential €500 billion black hole in the finances of Italy and about the same for Spain.

To look at the viability of filling this hole, we have to turn to the EU. Just last week they announced a potential €500 billion recovery package which, as we can see, does not even come close to the potential needs of the countries worst affected by the virus. So, what do the EU members states really need from the EU now? The answer is not a financing solution because they will never agree a package big enough as we will look at below. What the EU needs now is a political revolution and who would like to place any bets on that happening?

Normalcy: the condition of being normal; the state of being usual, typical, or expected

I am sure you, like me, have concerns about how the EU is going to deal with this and how Italy will extract itself from this mess, but my more immediate preoccupation is what happens to all the small businesses, restaurants, bars, pubs, shops, etc. How are they going to survive this? And I don’t just mean the lockdown period, because any extended set of conditions put on a return to normalcy which will, in turn, have a further damaging effect on the supply chain. The best economic forecasts predict a return to growth for most countries in Q4 2020, but the likelihood is that growth will only return, after a severe contraction for all of 2020 and a return to growth in the first quarter of 2021.

Cogs and Wheels

We have to imagine that the whole world economy is a machine which is comprised of cogs and wheels and for the machine to keep working all the cogs and wheels must keep moving. If one slows then it inevitably has a slowing effect on the whole machine. Not only, but if we imagine the supply chain of a restaurant for example (I choose this because there may be social distancing rules applied to restaurants when they reopen) and

assume that they can only open initially at the capacity of 30-35% of their pre virus levels, then effectively that slows the whole supply chain down to 30% as well. It is not correct to say that it will affect only the restaurants, but also the lavanderia that cleans their table cloths, the food suppliers, the deliveries of detergents, the wine consumption etc. This affect of an extended return to normalcy could be the difference between many businesses reopening and staying permanently closed.

We can extend this thinking globally as well based on different countries coming out of lockdown at different times. If we think about global trade in it’s most basic defintion it is an exchange of goods. A buyer finds a seller and they make an exchange. But, if in the case of Italy, it comes out of lockdown and businesses start again, will they be able to find buyers, or even sellers of their goods and services if other countries in the world, the USA, the UK, Russia, China etc have continued restrictions in place themselves and they can longer trade in the way they did before?

The system is a machine of cogs and wheels which are all inter-dependant on one another. When the wheels stop turning it affects the whole machine.

The ripple effects in the EU?

The first thing to remember about the eurozone economies is that coming into this period, nearly all the eurozone countries were in or near recession.

Italy has been in a low growth, low inflation cycle for about the last 30 years. This crisis is expected to cause respective contractions to the economies of Italy and Germany of -9.1% in 2020 and -7% followed by growth in 2021 of +4.8% and +5.2%. Unfortunately the reality is likely to be much worse.

Italys’ national debt to GDP ratio is predicted to rise to 155% and it could very well fall into a persistent deflation spiral. This is very bad for business, the economy and the country as a whole because it will exacerbate the effects of the debt meaning that Italy has to pay even more back to meet it’s debt obligations in world financial markets, meaning less investment in infrastructure schools, hospitals, and public services. Could we see even more forced privatisation of public utilities and services?

In short this is a very bad situation!

As I also explained above, the effects will not only be isolated to Italy and Spain, but the rest of the EU. For example, French banks have lent approximately €300 billion to Italian banks in recent years. Italian banks are almost inevitably going to wobble after this crisis and we might have to expect some bank failures (the subject of my next E-zine). But, if they default on their obligations, what will be the ripple effect on French banks? And French banks are not the only banks that have lent to Italian banks in recent years. Also, Greek, German, Spanish, Portuguese…can you see the trend?

So how will the EU deal with this crisis?

The short answer is don’t expect anything from the EU. It is likely that we will see a new idea almost every day in the press but none of these will solve the problem because one the single biggest failure of the EU project. No political alignment. We cannot fix a financial solution without first having a political solution, because any political solution ultimately means that there will be a fiscal transfer from one country in the EU to another, and neither the Dutch nor the Germans are willing to take that risk.

The European central bank already owns 23% of Italian government debt and to bear the cost of the Covid 19 breakout it would need to purchase another 25%, meaning that the ECB would be holding nearly 50% of Italian government debt. If we remove the morally right thing to do for a moment, it is perfectly understandable that the Germans and Dutch would

not want to be on the hook for this amount of debt should Italy fail to pay its debt obligations in the future, because of its inability to manage its economy.

National interest will always come first, over EU solidarity. Let’s bear in mind that Germany is also going to have to apply it’s own fiscal stimulus and if EU bonds were created then that would mean a transfer of approximately €200-300 billion euros of government debt transfer from Italy to Germany alone. It might be the morally correct thing to do, but is it the practical thing to do?. Is it right that other EU states should shoulder the burden of debt from less efficient Southern European states?

A quick look at history

You may think that these are historically unprecedented poltical times, but you would be wrong. We only need to look at the USA to see what happens when no political union is in place:
Between 1776 and 1789 the US was like Europe is today. It was a group of federal states that all operated their own finances and budgets. This was also the time of the War of Independence from Great Britain. In 1788 a currency union was formed and the US dollar was granted as the common currency across the USA, allowing them to spend without the worry of exchange rates. Following the currency union a federal government was formed in 1789. At this point the federal government now had a right to tax the nation. However, this led to a fractures between individual states, principally those in the north and those in the south and lead to the American civil war in 1861 – 1865.

So there we have an example of a similar situation as that of the EU, but with one major difference: The EU doesn’t have a federal government in place and without a federal government, (but a currency union), then the central bank (the ECB in the case of the EU) does not have the authority to bail out the individual member states in the time of need. In other words the central bank cannot play it’s role of being a lender of last resort. Herein lies the problem.

In the USA, as we have already seen in past weeks, they will essentially ask the Federal Bank to print as much money as is required to bailout the nation. If they lend to any institution, municpality or corporation and that entity fails to pay their debt obligations then the

taxpayer will bear the burden for that debt and it will be added to the governments existing debt obligations, which they can then, over time, work to payback or erode through inflationary measures.

taly, as per all EU member states, have no lender of last resort, (independent central bank) to which they can turn to bear the cost of the measures introduced during the Covid 19 outbreak.

So where do we go from here?

Well, it is quite clear that this is going to swiftly move from a health crisis to an economic crisis and then even more quickly to a political crisis.

There seems to be no political will in the EU to create EU Bonds to alleviate the burden on Southern European states who were most severly affected by Covid 19. The only solution being offered at the moment is to extend the European Stability Mechanism to Italy, Spain and other affected states which is ( without going into details) an offer of loans at low to zero interest rates, but which must be paid back and with conditions attached. This is something which Italy is going to try hard to fight against. This isn’t a financial crisis but a health crisis and they believe, and I am with them despite the financial and political consequences, that the EU must bear the burden of the additional debt created because of this crisis. Italy does not want to take loans with conditions attached because it is essentially the same financial treatment as that imposed on Greece in 2010. The only outcome from that was complete financial hardship and a failing economy. Italy is, obviously, keen to avoid the same fate as is Spain.

So that leads us nicely to the term which we are likely to see in the press in the coming weeks and years ahead: QUITALY.

Is Italy going to decide to do a Brexit and leave the EU. Before any Brits, like myself, who have taken citizenship in recent years, start to panic about the possibility of Italy leaving the EU as well, it should be noted that the Italian constitution would prevent a hasty and

quick action, (They couldn’t do a Brexit!!) and even if they were to hold a referendum on the matter it would take years of negotiation within the warring Camera dei Deputati and Senato to even arrive at a referendum.

So we have a long way to go yet, but one thing is clear. Political opinion is changing in Italy. In recent surveys 42% of Italians said that they didn’t want to leave the EU, but an equal percentage said that they would want to. 50% of Italians said that they did not want to take any money from the European Stability mechanism if it came with any conditions attached, but conditionality will be key to the future of the EU, and the economic health of Italy.

As you might imagine at this time, this is stoking more populist revolt and Matteo Salvini is now number 1 in the polls. The Frattelli D’Italia led by Giorgia Melloni ( who is a far right party allied with Salvini’s, La Lega) is also polling well and her ratings are rising fast. It is not beyond imagination that when the Covid virus passes, a political crisis will quickly ensue, Conte and the M5S coalition will hold on to power by a thread but a Salvini / Melloni coalition could be very quickly ushered into power in the not so distant future. Prepare yourselves!! I can only add that my conversations with Italian friends, people I chat to at the market and with some clients has turned from being very EU positive to negative. One of my clients probably hit the nail on the head when he said, “if the EU cannot get their finger out on this one, then I can’t really see the point of a politically unified EU anymore and it should return to it’s roots and become merely a trading block, with freedom of movement). I am inclined to agree.

What can we expect?

The Eurogroup [the group of EU finance ministers] is meeting on Thursday 23rd April to discuss the future. Conte will be meeting with them to try and negotitate a good financing outcome for Italy.

The likelihood is that the EU will do what they are good at and kick the problem into the long grass. They will not provide any concrete solution, which will throw Italy and possibly Spain into a spiral of recession, deflation, more political infighting and economic hardship. The Eurogroup only has €500 billion euros at it’s disposal to provide unemployment insurance, economic stimulus, and the fight the Covid 19 virus across the EU. It is nowhere close to the amount required. The ball park figure would be closer to a € 1trillion. The sad fact is that the European Central Bank could print € 1trillion euros, if only it had the mandate to do so from all EU member states.

In truth, Germany will likely have the last say. Brexit has already left a funding hole of approximately €60 billion in the EU budget and so the logical conclusion is that Ms Merkel will give the problem the kiss of death by requesting that the issue of funding is placed in the EU budget and each country will be left to fight it out with other member states as to who pays what and when. In others words it will fall into the bureaucracy of the EU. The problems will persist in Italy and economic hardship will worsen.

So what does this mean for our money

Well, to try and leave this E-zine on a positive note for investors, at least, we can be thankful that there is a whole world out there in which we can invest and whilst Italy likely sees hardship, other countries will exit this crisis and proper. One country that springs to mind is China. So for all our concerns about the country that we live in, we shouldn’t worry too much about our money. I can’t say for sure when stock markets will recover fully. We may be waiting until the end of this year at the very earliest, but they will and with a well managed, diversified portfolio with good oversight, then your portfolio will recover as well. The economics will play out over a much longer period. One upside for currencies is that it could weaken the Euro which would make those who have assets in USD or GBP, for example, worth a lot more. Maybe a return to the heady days of 1:45 GBP to 1 €?

All I can say that it is all to play for. In the meantime, I will be taking a closer look at Italian banks in my next E-zine as they could be a huge risk to use, and to financial markets in the months and years ahead.

Deal or No Deal…?

By John Hayward
This article is published on: 20th November 2018

20.11.18

As someone who has lived and worked in Spain for more than 14 years, and keen to stay here with my family for the foreseeable future (children moving to other climes accepted), I am very interested in the rights of British citizens in Spain post Brexit. A colleague of mine is part of a group in Italy set up to protect the rights of British citizens there. A member of this group has put together a very comprehensive list (non-exhaustive) of things that you may need to do to prepare for a No Deal Brexit scenario, which after the events last week, seems to be becoming an ever-closer reality. I have made the list more Spanish.

Whilst there may be some deal agreed anywhere up to teatime on the 29th March 2019, there are several items on the list which many people should already be applying.

At the same time we don´t want to get caught up in scaremongering, I have come across several reassuremongers who just choose to live in the “it won´t affect me” world. There are already changes being made to British statutes in readiness for leaving the EU, with or without a deal. Getting one´s house in order now is almost certainly going to be easier than from 30th March 2019 onwards.

Here is your almost definitive list of things to do to prepare for a NO Deal Brexit.

1. MAKE SURE YOU ARE LEGALLY RESIDENT IN SPAIN UNDER CURRENT RULES.

That means you should:

Apply for residencia under the current rules. As an EU citizen you must register as a resident if you plan on living in Spain for more than 3 months.
You should register in person at the Oficina de Extranjeros (immigration office) or designated police station in the province where you live.
Before going to your local Oficina de Extranjeros or designated police station, you must make an appointment online, which can be done on the Spanish public administration website.
Once on the online appointment booking system, you should select the province where you live and then the option “Certificados UE” and follow the instructions to select and confirm your appointment time.
When you go to your appointment, you will be required to provide documents to support your application. You will need evidence of a specified minimum level of financial income which could be in the form of a letter from your Spanish bank manager and, if you are not working, private health insurance or an S1 (which you obtain from the UK if a pensioner). This will evidence your legal residence in Spain and give you proof that you were legally resident on 29 March 2019. This may be like gold dust in the case of a no deal exit, and if there is a Withdrawal Agreement it will help you benefit from a streamlined process to receive a new card if necessary under post-Brexit rules.
Years of living in Spain do not necessarily count – only legal residence. So if you have been living ‘under the radar’ so-to-speak, try to rectify the situation in advance of 29th March 2019.
Apply for a Residencia de carácter permanente (‘permanent residence’) under existing EU provisions if you have been legally resident for at least 5 years. It is the best evidence that most of us can have of our long-standing residence in Spain.
Make sure that you’ve submitted tax returns in Spain. As a resident, (whether in the first 5 years or afterwards with Residencia de carácter permanente, you are required to submit tax returns and pay tax in Spain on your global assets, income and gains even if all of them originate from the UK).
Make sure that you either have private health insurance (obligatory for the first 5 years of residence unless you have an S1 from the UK or are working), or that you’re registered in the Spanish health system (e.g. you already have a Residencia de carácter permanente under existing EU provisions).

2. CREATE, AND KEEP UP TO DATE, A DOSSIER, AS IF YOU ARE APPLYING FOR RESIDENCIA OR RESIDENCIA DE CARÁCTER PERMANENTE OR CIUDADANÍA ESPAÑOLA, IN PARTICULAR:

Collate copies of as many of your tax returns as you can get – tax returns, proofs of payment and receipt. These days there is online access to your tax files and records.
Put together a file of utility bills for at least 10 years if you can. This will prove your continued residence.
If your name is not on the bills for your household, or on any utility bills, get it added now.
For women in particular: make sure that the name on bills, bank statements, pension statements, payslips etc. matches the name on your passport if possible.
Put together a file of bank statements, wage slips and/or pension statements for the last 5 years if you’ve lived here that long. Longer is even better – 10 years is best. You may need these to prove the stability and sufficiency of your resources.

3. CHECK YOUR PASSPORT
Make sure your passport will be valid for several months after 29 March 2019. If not, consider renewing it early. Also, check your signature.

4. MAKE SURE YOU ARE IN SPAIN ON 29TH AND 30TH MARCH 2019
This is probably not the best time to make a family visit to the UK! Transport could be chaotic, with no agreements on air or other travel between the UK and EU.

5. TOP UP YOUR MEDICATION

If you currently rely on an S1 form for access to the Spanish health service and/or you need regular medication, think about making sure you have a good supply of it on 29 March 2019.
If the worst happens and the reciprocal health care system stops on that date it might take several weeks to get an alternative system up and running and there may be short term chaos. Making sure that you have the permitted 3 months of long-term medication would mean that you’d avoid having to pay full whack for your meds or being without a family doctor while the situation was resolved.

6. CHECK YOUR DRIVING LICENCE

If you’re still using a UK driving licence, apply for a Spanish licence now. It’s relatively straightforward and for most people, it can be exchanged (with some fees and a medical) without having to take a full Spanish driving test (theory and practical). It’s possible that UK licences will not be valid in the EU in the case of a no deal Brexit.
Consider applying for an International Driving Permit if you regularly drive in the UK.

7. THINK ABOUT MOVING MONEY
If you have bank accounts, savings or investments in the UK, consider moving them to Spain or into Spanish compliant vehicles, or some other EU jurisdiction now. Sterling may drop suddenly in the case of a no deal exit; there may also be temporary problems moving money in and out of the EU.

8. TRY TO HAVE A FINANCIAL BACKSTOP
If at all possible, try and make sure you have access to enough cash to see you through two or three months, especially if your income comes from the UK and is transferred monthly.

9. CONSIDER YOUR PERSONAL PENSION
If you have a personal pension (not state or public service occupational) and have not yet retired, think seriously about cashing it in if you’re old enough (take financial advice on the tax implications of cashing it in before doing so), or transferring it. A detailed pension analysis would be required to look at the suitability of doing so but it might just be possible to remove your pension from future UK political and tax problems as a result of No Deal Brexit scenario. There may be issues with passporting rights after Brexit that could cause problems with insurers making payments to those living outside the UK.

10. LOOK AT WAYS YOU CAN MAXIMISE YOUR INCOME AND MINIMISE YOUR EXPENSES

This applies particularly if the bulk of your income is in sterling, which may take a serious hit after a no deal exit. Can you survive if sterling hits parity? Goes below parity? What’s your bottom line? What can you do to turn your income into euro income?
Create a personal financial contingency plan. Look at ways you can cut your spending temporarily, and at ways you could create additional income.
Get any potentially expensive dental or optical work done now.

11. IF YOU HAVE A BUSINESS THAT RELIES ON ATTRACTING PEOPLE FROM THE UK.

Can you change your client demographic? Whatever the deal or no deal, British people may limit their travel to the EU next year and you may need to find new clients if you’re to survive financially. Make sure you have a website in the language of the nationality of people you may wish to attract, if you haven’t already, and that you begin to advertise NOW to attract other customers.
But …
If there is a no-deal Brexit, it is uncertain as to whether you will be able to continue to run a business at all.
Even if there is a deal, you may not be able to provide services to customers in other Member States: that is still to be decided.

12. PUT SOME WORK INTO LEARNING SPANISH

Whether there is a deal or not, we may be required to re-apply for residencia and/or Residencia de carácter permanente.
We do not know whether a minimum level of Spanish language ability will be required (to date it has not been), but it is a good opportunity to work on the language skills. If nothing else, it opens other social doors and means you don´t have to stick to the same bar, club, or shop

13. THINK ABOUT, OR RE-THINK ABOUT, APPLYING FOR SPANISH CITIZENSHIP

For many people, their British identity and nationality is important to them and the idea of taking out Spanish citizenship has been regarded as ‘only as a last resort’. For some of us, a no deal Brexit might be that ‘last resort’. Spanish citizenship won’t guarantee all the rights you currently hold as an EU citizen (mutual recognition of professional qualifications, for example) but it will guarantee you the right to reside and to work – and as an EU citizen you’d continue to benefit from full free movement rights.
It you are thinking of applying for Spanish citizenship, try to ensure your application is lodged before 29 March 2019. The Spanish authorities do not say how long the process will take but assume at least months (las cosas de pálacio van despacio). In addition, language tests will be required (see point 13). If you’ve already made the application, there is more chance of everything passing through than if you wait till after 29 March when all the rules may change.
Be aware that taking out Spanish citizenship may affect the taxation of certain pensions and you should take good financial advice before applying.

14. MARRY A SPANIARD
This may not be as easy as it once was, with changes to immigration laws, but it might be a solution for you, especially where children are involved.

15. GET YOUR PROFESSIONAL QUALIFICATIONS RECOGNISED NOW

The European Commission has said that, whatever the outcome of the negotiations, Brexit does not affect decisions made pre-Brexit by EU27 countries recognising UK qualifications under the general EU directive on the recognition of professional qualifications (Directive 2005/36/EC). For details of which qualifications are covered see
https://ec.europa.eu/growth/single-market/services/free-movement-professionals/qualificationsrecognition_en
So if you have a UK qualification covered by that Directive and you need to be able to use it, apply to get it recognised before March 30th 2019.

16. ABOVE ALL…DON’T PANIC.

This is about hoping (and working) for the best, while preparing for the worst. Whatever happens, you won’t be alone.

And there you have it. There isn’t a better list anywhere about what to do in a NO Deal Scenario. I would like to say that I think that some kind of deal/arrangement will be agreed in the end because there is too much at stake on both sides of the Brexit divide, BUT I have to admit that I was wrong about Brexit happening in the first place and also about the election of Donald Trump as US president. I was convinced neither would happen. This time I am taking precautions and implementing most of the items on this list. I hope you do too.

The EU – a Financial success or not?

By Chris Burke
This article is published on: 31st October 2017

31.10.17

What better subject to discuss, than one closest to the heart of someone living and studying in Europe.

Geneva Business School (GBS) in Barcelona, is a leading Business School providing cutting edge, innovative, Swiss quality education on a global scale. Part of their curriculum is to invite guest speakers along to hold a forum/debate on a topical subject, to enhance their knowledge, practice what they are learning and increase their debating skills.

So, where better to format the debate on discussing what the original reasons were for the EU being formed. Easy I hear you say. Ok, well we started discussing putting all the countries together and how that could make them stronger under one currency, against other economies. It was soon apparent that although this seems a sensible idea, did this work for everyone? Greece was debated as already being financially in trouble before it joined the EU, and has continued down that path, but why? When we looked at the Government debt of each country before joining the EU and present day, it’s clear many of the country’s debt has doubled; The UK, Greece, Italy, France to name but a few, but why haven’t others? No one was surprised Germany’s hadn’t, but why hadn’t it? We discussed Germany’s manufacturing capability compared to the other countries; this could well be a valid reason. There was mention of ‘black’ money still prevalent in certain countries, mainly Italy and Greece where in some places you still couldn’t pay by card, only cash. It was well known a few years back the Greek underground had been losing money hand over fist due to passengers not paying. Was there a cultural issue here that was denying the government, in those countries, of more revenue from tax?

Freedom of movement was on everyone’s lips as another good reason for the EU being born. Freedom to move elsewhere, find work, perhaps a new life, career. It was quickly pointed out this didn’t work for everyone, an Italian farmer (highlighted by an Italian student) would not agree this had worked well for him. Of course, you cannot please everyone and there are countries in the EU whose farmers receive subsidies to help.

Access to the common market, so trading made easier for countries in the EU, cheaper and more direct for them to sell within. This making them potentially more competitive than those outside it. This was a strong reason for the EU to be formed.

So there was one more, major reason, that after we discussed what it was, agreed that perhaps this could be the biggest reason for the EU being formed, but is hardly ever brought up. We discussed that during the Brexit negotiations this was hardly ever mentioned as a reason to remain, if it was its press headlines were minimal. When you are part of a team, whether it be a sports team or any other, you have a common reason/goal to make it work. You may have disagreements, but because you all want the same outcome, which benefits you all, you work hard to find a solution. Differences can be put aside, or debated, and there may be a skirmish occasionally but in general, conflict is usually avoided or at least minimal. Stopping wars and keeping the peace was one of the founding reasons for forming the EU, yet it hardly ever gets the status it should deserve.

So, taking all this into account, did we think the EU has been a financial success? Certainly not to everyone, but if you were a consultant brought in to investigate and make a decision, the debaters at Geneva Business School voted marginally it had. Wars cost money, however they can also generate it……

Other key questions asked were:

Where are we economically in the world?
We are in the second longest Bull Run in the history of the stock markets, we certainly aren’t on the bottom run of the ladder in terms of its upward curve, probably not in the middle, how long there is to go is anyone’s guess, but we are probably in the final third.

Government debt are at the highest rates ever, can it be repaid?
No. Even if we had ten more fantastic years on the stock markets, which is highly unlikely, it’s my belief it’s almost impossible to repay these. Looking at debt clocks is frightening and best not to be done!

Bitcoin, good investment or not?
The jury is still out on this, it continues to provide itself as an investment choice. Will it last? Do the bank’s want it to last? Will it be here tomorrow? For the high risk takers it’s a choice, for everyone else it’s too early to tell.

Property, a good investment in Barcelona?
Simply, if you are intending on holding it for a decade or so, and being able to fix the mortgage interest rate for life, it’s hard to advise against it. For anything less, you wouldn’t want all your investments in one asset class.

So, our final thoughts were, on Maslow’s Conscious Competence Model, where did we rate the EU? And the overwhelming answer was:

Conscious Incompetent – that is to say, the EU knows it isn’t working, and is arguably trying to fix it although isn’t sure how. But how much we wonder…….

The fight to keep our EU rights

By Gareth Horsfall
This article is published on: 25th September 2017

25.09.17

As Theresa May readied herself in Florence to deliver her BREXIT speech a small but energetic group of British expats gathered in the city to voice their opinions. The group, part of ‘British in Italy’ was lead by Spectrum’s Italian Manager Gareth Horsfall.

Gareth has been instrumental in building the groups membership and organised this peaceful protest in Florence.

The protest was organised to show solidarity for EU citizens in the UK as well as British citizens living in the EU. Gareth explains, “The motivation and reason for such activity is to fight to keep our EU acquired rights…those that could affect our freedom of movement in the future, the right to work in other EU states as an EU citizen, the right to have our qualifications recognised in our current EU state of residence and any that we may subsequently move to, the right to keep our healthcare rights and especially those of a lot of our pensioner clients who rely on it, the right to have our social security contributions taken into account from other EU states and all the interconnected rights that go with these things.”

Outside the impressive 14th century Novella church in the centre of Florence, the protesters were in good voice with many flags and banners, one reading “Denied a vote – Denied a voice”. The usual media circus was in town, and Gareth was delighted to be able to talk to many journalists to throughout the day.

Gareth Horsfall is a member of ‘British in Italy‘ which has been set up to protect and fight for the rights of Italian citizens living in the UK and UK citizens living in the EU.

The message is simple:
We should be granted all the rights that we have acquired and/or are entitled to before the UK chose to leave the EU.

The objectives are listed below:

British in Italy is a group of UK citizens resident in Italy concerned about the effect of Brexit on the many thousands of UK citizens in Italy and the half million or so Italians in the UK
Our aim is to ensure that Brexit does not penalise these individuals, all of whom made the decision to move across the Channel in bona fide and relying on their EU right of freedom of movement
UK citizens already in Italy and Italians already in the UK should therefore continue to have all the rights they had acquired or were in the process of acquiring while the UK was in the EU
We have already lobbied the UK government hard not to take these rights away from EU citizens in the UK

If you have not yet made your presence known, and/or you know someone who hasn’t then feel free to get in touch with the British in Italy group at britsinitaly@gmail.com Your name and contact information will be registered and you will be added to a newsletter mailing list. (Your information will not be shared or used for corporate purposes). Or follow them on Facebook HERE

Horsfall finishes by saying “The UK Government is failing to give an outright guarantee to EU citizens living in the UK and reacting to this the EU is threatening to restrict our own rights. We are all in this together and should fight to stop it. Its not about stopping BREXIT but just about treating people fairly and not ruining peoples lives and potentially pulling families apart.

Gareth was also part of the Exiting the EU Select committee, which met at the House of Commons back in January this year. Gareth was one of four UK citizens living in the EU who represented other UK citizens living in the EU, in Westminster.

EU Citizenship Rights for Brits?

By Gareth Horsfall
This article is published on: 17th November 2016

17.11.16

The EU Parliament is to discuss the possibility of EU membership for citizens of countries that vote to leave the EU. A proposal was made by an MEP in Luxembourg.

The idea is to guarantee those who want the same rights as full EU citizens, including the right of residence in the EU, to be able to vote in European elections and be represented by an MEP.
I have to admit that the proposal sounds a nice idea but I don’ t see it being accepted.

Human capital will be a big political maneuvering tool in the BREXIT negotiations and if they offered any UK citizen the opportunity to have EU rights then I don’t see how this would aid the UK’s bargaining position. Equally, it may be a incentive for other EU countries to vote to leave as well.

I will follow developments and report them as they arise…

SANCTIONS FOR UNDECLARED ASSETS IN ITALY
This is a subject which I haven’t touched on for some time. What are the penalties for undeclared, and subsequently discovered, assets for residents of Italy?
The penalties for non declaration range between 3% and 15% of the value of the asset, plus any fines for late payment. The percentage is determined by the investigating tax officers depending on the gravity of the misdemeanour.

If you have undeclared money in tax privileged regimes or countries where there is not an adequate exchange of fiscal information then the sanctions are doubled: 6% – 30%, plus fines for non declaration.

This is relevant given the automatic exchange of financial information which is now in force under the OECD Common Reporting Standard.
I know that a number of you have been receiving letters from non ItalIan banks asking you to quote your Tax Identification Numbers (TIN) for reporting purposes. This is your Codice Fiscale for Italian residents. By completing this letter it allows the foreign financial entity to report your information, automatically, to the Italian authorities.