Russian rouble crash to have knock on effect in Spain

LAST UPDATED: 27 Jan, 2015 @ 00:50
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Russian rouble crash to have knock on effect in Spain

THE plummeting value of Russia’s currency is set to have a knock on effect on fragile EU economies.

The Russian rouble has halved in value on foreign exchange markets over the last 12 months.

And with a large number of Russians living and investing in Spain – and other European countries – the impact on the country’s economy could be sizeable.

Carl Weinberg, chief economist at High Frequency Economies, referred to the currency’s collapse as an ‘unrecoverable spiral’ which is set to get worse.

He said the collapse was brought on by both ‘economic factors’ like sanctions and falling oil prices and ‘financial factors’ as the Russian Central Bank continues to print money to help state-owned companies cover their debts.

He anticipates that EU markets will falter in the upcoming months as trade in and out of Russia will inevitably become less profitable.

The currency crash is also set to reduce the number of Russian tourists flying into Europe as the cost of living rises for Russia’s residents.

To make matters worse, Russia’s companies, both private and state-owned, owe €540 billion in foreign currencies to offshore investors.

This will spell bad news for banks and investors across Europe as Russian companies will inevitably need longer to repay their debts.

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12 COMMENTS

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  1. Oh dear, there goes the next batch of mugs who were being lined up for duff properties in Spain.
    Let’s see…Maybe the Brazilians? Because Northern Europe is a bust now.

  2. How quickly things can change, world events alter markets whether propertty, stocks and shares,oil etc How many times did we hear forum posters say the Russians are buying up Spaiin, now they’re having to flog their assets worldwide, then the Chinese were out in force now their economy is going pear shaped.

    That leaves the Eskimos perhapst to step in!

  3. Just as well mortgage lending has already surged in Spain over the last 4 months, and big investors like Slim, Blackstone and China’s richest man are already investing in Spain. The tide has turned, and growth is now being revised upwards in Spain thanks to lower oil prices and a weaker Euro. Great news for those needing a job, good news for those desperately needing to sell their house, extremely bad news for the doomsters here. Remember their predictions of Spanish borrowing costs soaring, Spain being forced out the Euro, an evacuation of expats, Santander going bust? Still let them have their fun and whine and whine again.

  4. You’ll never get any positive comments about Spain from the usual batch of naysayers on here GUAQ.

    and most of them live in the UK.

    Twisted.

  5. To all the Olive Press ‘naysayers’ – This is so true ha ha ha

    A naysayer:

    One who frequently engages in excessive complaining, negative banter and/or a genuinely poor and downbeat attitude. Naysayers are distinguished by their tendency to consistently view the glass half empty, make frequent one-way trips to negative town, and constantly emphasize the worst of a situation. They have the capacity to rant and whine for hours on end about the most insignificant inconveniences. They tend to travel solo, but have the keen ability to spread their pessimistic attitude to a group of unsuspecting bystanders and encourage others to employ their mindset.
    Naysayers tend to blend in with those around them rather well, granted they have learned over the years to adapt to their surroundings. However, when the opportunity arises, their true nature will be exposed and they will stop at nothing to exclude others or bring a general sense of negativity to any situation.
    Not to be confused with non-naysayers who fight against the negativity brought forth by naysayers, make the best of a situation and are not afraid to call out a naysayer on the spot.

  6. So the rouble situation will be a positive for Spain will it Derek? Leave it out old son and try to use your own definitions. If you can dredge any up, from that Pollyanna mind of yours.

  7. Derek, pretty obvious if the Russian currency has halved then many will not be able to pay double for a property in Spain and then further down the income ladder, others will not be able to afford a holiday there… The smart Russian money moved out of Russia a long time ago and purchased properties in big cities where they rent them out for a good return and increase in capital, that is not Spain BTW. On another note, one of my Spanish neighbours has cancer and the MRI scanner does not work but they have put a camera inside and said it looks too big to operate.. He is disabled and he has to pay for his own transport to hospital and back on his small pension, wants to go in a home as there are no hospices in that area and he will have to pay his own care costs and his pension does not meet this, can’t sell his property quickly I would have thought. No free transport in Spain, no home help for him.. I have offered to top him up if required but Spain is not a good place if you are ill and there on your own, even if you are Spanish.

  8. There are thousands of empty properties for sale in Spain and they were particularly targetting the Russian and Chinese markets (Golden Visa etc.) in an effort to offload them so this will undoubtedly have some affect on sales.

  9. Derek you old rosy spec rascal, you’re not going to convince anyone but yourself and those unfortunately stuck in Spain. Have you actually read the OP article which led to comments?

    Did you watch Putin today trying to make a case for Russia’s collapsing economy which will impact on even the already suspect euro zone economies? Those Russians who are supposed to have bought in Spain are already on a downer.

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