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Spain’s small businesses feel the brunt of the recession

PUBLISHED: August 16, 2012 at 12:29 pm  •  LAST EDITED: August 25, 2012 at 8:08 am
Andalucia, Business & Finance, National News  •  6 Comments


Spain’s small businesses feel the brunt of the recession

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SMALL businesses in Andalucia are buckling under the strain of Spain’s recession.

Over 80% of the region’s companies have three employees or less, with many relying on the dwindling tourism industry.

It is tiny businesses like these that are most likely to suffer from the economic slump.

“Tourism right now is a disaster, said Juan Zabala Franco, who sells horse and cart rides along the Guadalquivir River.

“There was an explosion of money as the banks lent to everyone, and now we are paying for that,” added the 44-year-old, who said one of the main problems is the fact many tourists now come to Spain on package tours where everything is included.

“They don’t have a budget for anything else,” he said.

But there is some good news.

Despite the dire state of Andalucia’s economy – with over 30% living below the poverty line and one in three jobless – it has the lowest debt-per-person ratio in Spain, mainly because its population is so large.

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Stuart Crawford

August 16th, 2012 12:43 pm

Hey Cal – where are you?

‘Tourism right now is a disaster’ – makes a nonsense of your statement on another thread does’nt it.

Did we ever find out if you had a vested interest in the tourism business. LOL

Really?

August 16th, 2012 12:51 pm

The reason we have so little debt per person could also be that we’re bled dry and the few people that did enjoy a healthy credit line back in the day went bankrupt and got everything repossessed. Nowadays we’re not entitled to lend money so what debt is there to hold?

Boulder

August 16th, 2012 7:55 pm

Oh please. Today I read a book had a bite to eat and a drink outside a cafe on the coast. I was there from about 12:15 until 14:20. The paseo was very quiet the whole time. Next door to the cafe is a small shop selling swimwear, sunscreen, inflatables and general knick-knackery and just two customers went into the shop and didn’t buy anything. The beach on the other hand was heaving. At 13:50 people started coming up from the beach for lunch just as the shopkeeper brought in the displays and locked the door and by 14:20 there was a throng of people in the cafes and chiriquitos. I saw at least a half dozen, possibly more, walk to the shop door and turn away when they saw it was closed in just twenty minutes give or take. The problem is shopkeepers want to be open when it suits them. Not when it suits their customers. So tough.

Reality

August 18th, 2012 6:56 am

Boulder – “The problem is shopkeepers want to be open when it suits them. Not when it suits their customers.”

This actually isn’t entirely the fault of the shopkeepers. There are regulations in place that limit the amount of hours you can stay open (if they don’t have special exemptions). If they stay open past their defined hours they can be subject to penalties. The same is true for opening on holidays.

Essentially you have the government saying, “You can be open here, here, and here. But you have to stay closed here, here, and here.”

And you also have high taxes for business owners, fees, and a general lack of innovation (ever notice how every store sells the exact same thing as the next store?).

Boulder

August 18th, 2012 2:38 pm

@ Reality.
Fair enough. But if “80% of the region’s companies have three employees or less” then they represent a huge chunk of the electorate and they should stop voting for politicians who introduce these laws. They could also do with halving the number of politicians who apparently outnumber police, doctors and fireman combined and get rid of at least a third of the public holidays.

Reality

August 18th, 2012 5:34 pm

Oh I agree with you Boulder 100%. Unfortunately it is a lot harder in practice to get rid of existing legislation than it is to pass new legislation. Thus the trend of seeing more and more regulation every year (not just in Spain but everywhere).




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