Many expats in Spain are claiming the country’s financial troubles are forcing them back to the UK. But their problems run deeper than that, says Chris Marshall.
A common theme from comments left on my previous articles is that expats have chosen to live in Spain, and if they don’t like it they should put up and shut up, or go back to the UK.
On the surface it is hard to argue against that sentiment, but is going back to the UK really a practical option?
Broadly speaking, I tend to consider expats in Spain as falling into three categories: those that have moved over with their families to further their careers, pensioners who have opted to spend their twilight years enjoying the sunshine of Spain, and the rest, which is an eclectic mix of people who have moved to Spain for a variety of reasons, with the shared objective of making enough money to get by on while enjoying a change in lifestyle.
Realistically, with Spain’s chronic skills shortage and declining education system, the dream is far from over for the career expats, so we can discount them from the hordes of expats that would return to the UK given the chance. Of the eclectic mix, it is hard to see why they’d go back – Spain offers a cheaper cost of living, better quality of life and often better job prospects (in my experience, the majority of this group are here in Spain not because they really wanted to be in Spain, rather that they didn’t want to be in the UK).
Which leaves us with the expat pensioners, for many of whom the party does seem to be over. Falling house prices, an unfavourable exchange rate and a Spanish economy in ruins have seen those that can return head back home, leaving the rest “trapped”, according to a whole host of recent headlines.
Which brings me to my problem.
In one article I read recently a pensioner was quoted as saying “my plans were to stay here for 10 years, but I sold up everything in the UK, so I can’t go back”, which I am afraid begs the question: why? Not “Why can’t you go back?”, as selling a property in Spain at the moment is tough, unless you want to give it away for peanuts, but why, if you were only planning to be somewhere for 10 years, would you sell everything and invest in a property there? Property appreciates in value over time, but during that time prices fluctuate, always have and always will, so why only give yourself 10 years? Another pensioner was quoted as saying the cost of living has soared, which I partly agreed with until I read “corned beef prices in our local Iceland have gone through the roof!”
The most cited reason though that pensioners give for wanting to go back is the exchange rate. Gone are the days of the €1.50 to the pound, and while €1.22 is better than when the euro reached virtual parity, it isn’t exactly great. But is it that bad? As with any financial market, exchange rates fluctuate. To expect it to remain at €1.50 for ever and a day was at best naive. If people had based their decisions on a reasonable fluctuation, say €1.35, then how much of a difference would it actually make if it sank to €1.22?
It seems to me that if people had sold up and rented, invested their money wisely and used the exchange rates to their advantage, they could actually be better-off rather than worse-off. That being the case, the reason that they are trapped is as much, if not more, to do with the decisions they made, than the mess that Spain finds itself in.
And really, just how big a mess is Spain in relative to the rest of the world?
The new prime minister in his first 100 days has introduced new labour reforms, new health and educational reforms aimed at saving money, started to get to grips with excessive regional government spending, and has introduced cutbacks in public sector spending. The banks remain solvent, with Santander the largest bank in the eurozone, and a little-heard of Spanish company called Ferrovial has been instrumental in the turnaround in Heathrow Airport’s performance. Spain’s debt is actually lower than in both Germany and France, and with a central government debt to GDP ratio of 68.5 per cent it is better off than Britain, which sits at 79.9 per cent.
Of course this doesn’t mean that Spain isn’t in a mess, just that it isn’t the only country to have been living beyond its means, and it certainly isn’t the largest culprit. Despite the doom merchants, it is difficult to see the euro failing; it is just too big and too much has been invested in it. And, bear in mind, Michael Heseltine recently predicted that Britain would join the euro “if it survives”.
All of which brings me to the conclusion that returning to the UK for many, even if they could, would be a classic case of “frying pan into fire”.
It should be noted at this point that while many expats wish they could return home, not all that are going back are happy. Joanna Simm is heading back to the UK with a heavy heart: “We’re not going back because life as expats didn’t work out. Sadly, it’s problems with a property in England that have necessitated the move. When those problems go away, we’ll be back!”
Joanna though is one of the fortunate ones. A fellow writer, she pays the bills writing for the property website French Property Links, and an understanding boss is keeping her on, while her husband is going to commute from the UK and continue with his current job. “There are upsides to going back. I will enjoy being close to my four kids again, and with grandchildren beginning to arrive it becomes more important than ever to be able to be around. I look forward too to meeting up with old friends, a good few of whom have kept in close contact,” says Joanna.
Joanna will be returning to a UK that just entered into a double-dip recession. Throw in the water shortage, fuel shortage (or not, depending on who you believe) and the looming issue of paying for the summer Olympics, and it is hard to see what makes the UK more attractive now for expats.
I am sorry if this sounds harsh but I think that for many, saying they want to return is the consequence of an ill-thought out decision to move to Spain in the first place, and the decision to return is as equally poor.
These expats know deep down that moving to Spain was a mistake. But rather than take responsibility, many are just blaming the current financial woes that the majority of the world, not just Spain, are struggling with.
Article Source: Don’t blame Spain for the end of your expat dream
Chris Marshall writes a monthly column for Telegraph Expat about life in Spain, as well as a bi-weekly blog about technology useful for expats. He lives in Almerimar with his wife Sands, five cats, two Harleys and more often than not a glass of red.
He is also very difficult to get in contact with!! If you see this Chris, please contact me…