Bankers were hiring traders again and stock markets were looking up; for those who had survived the tsunami it was back to business as usual. Liam Clancy was one of the lucky ones. Armed with his newly acquired experience it was time to look beyond Marbella. The streets of London were perhaps after all lined with gold, he thought as he boarded the Iberia flight to Madrid and London. It must be like this after an earthquake, he mused as he sipped his gin and tonic, once the aftershocks were over you cleared away the rubble and started building again.
Since the explosion of the sub-prime crisis, banks had cleverly learned how to hide their huge liabilities, using special off-balance sheet vehicles, complicit auditors and a host of other tactics to bury them. It was why recapitalisation had been so necessary for Fitzwilliams.
After Clancy’s telephone conversation with INI’s human resources manager and his convocation to meet Pat Kennedy, he sensed something big was at hand. He had had his fill of the Costa Blanca’s silent resorts and the depressing skeletons of naked grey concrete that dotted the landscape. Unfinished condos lined empty streets; homes that should have been filled with happy sun tanned tourists. The facades of those that had been completed were now dotted with ‘Venta’ panels announcing apartments for sale at giveaway prices.
A calm had settled over Puerto Banús, a resort that boasted the greatest number of designer boutiques in the world. The owners of extravagant yachts were keeping a low profile, that is if they weren’t selling. Their Bentleys were hidden from view to avoid vandalism and bikini clad bimbos were discretely sipping their champagne out of view.
Marbella bars and restaurants were dismally empty and come evening the traffic had all but disappeared from the streets. With the collapse of the property market and the once booming construction sector, the trickle of parting expats was beginning to look like the biblical exodus from Egypt.
The flight to London that Sunday morning was full, no doubt Brits fleeing Spain for Blighty, he thought. Madrid’s modern Barajas Airport was a vestige of the good times Spain had enjoyed, vast and modern, but as Clancy wandered around to pass the time between flights, the indications of how serious the economic downturn were everywhere.
During the euphoric boom, sunshine and sangria had tempted many Britons to pull up roots and make a new life on the Costas. But it was now evident that many were returning home for good, packing their bags, forced out by the double effect of a strong euro and a local economy in deep crisis. House prices had fallen by as much as fifty percent, work prospects had dried up, and their courage sapped by the lost illusion of an easy life of endless sunshine, cheap cigarettes and flowing wine.
The number of Latin American faces in departures surprised him, what he did not know was most had one-way tickets in their pockets. In the previous decade, five million foreign workers had immigrated to Spain, but times had changed and with unemployment nearing twenty percent, newcomers were amongst the first to lose their jobs.
One of the largest groups of immigrants hit by the crisis were Romanians, whose homeland was only very recently a member state of the EU. In towns like Alcala de Henares, near to Madrid, the birthplace of Cervantes, ten percent of the population was Romanian, many of whom, unlike the Latinos, had no intention of returning home where the economic situation was even worse than that of Spain.
At the Iberia flight departure gate, it was clear not all of the British travellers were tourists returning home from holiday. The returning holidaymakers were full of life carrying their collection of souvenirs, straw hats, stuffed bulls and the duty frees bought with the last of their euros. The expats were not so young, looked sadder, and their carry-ons more down to earth.
Spanish banks had lent over three hundred billion euros to local real estate promoters and were holding billions of euros of property in guarantee for the loans they had made to now insolvent developers, property that fell in value with each passing day, selling at discounts of as much as forty percent.