Costa del Sol News - 10th November 2009

News from Andalucia & Costa del Sol

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The Costa del Sol weekly newspaper, on sale at newsagents.

Car buying subsidies extended to 2010

Government puts up additional 40 million euros fo 2,000-euro discount scheme

By David Eade

Car buyers feeling rushed to take advantage of the government-backed discount scheme can rest easier after officials announced that the aid package is to remain in place next year. The government has stated that the Plan 2000E incentives to buy a vehicle will be extended with a further 40 million euros to finance 80,000 additional purchases.

The State budget for 2010 included the provision to aid vehicle purchase but places no cut-off date for when the scheme will end. The minister of industry, tourism and commerce, Miguel Sebastían, announced the extended programme, adding that so far the scheme has been a complete success.

The incentive plan is based on discounts of 2,000 euros, of which 1,000 euros comes from the manufacturer, 500 euros from the State plus 500 from the regional governments, although not all have participated.

The car industry has been amongst the hardest-hit sectors of the economy during the financial crisis and the aid package is said to have been used in 99 per cent of the current deals. Overall there has been a 40 per cent drop in car registrations during the downturn.

Costa train project derailed in Junta's 2010 budget

Just five million euros has been set aside for plans and expropriations

By Oliver McIntyre

The long-proposed Costa railway linking Málaga to Estepona appears to have hit the skids for at least another year, with the Junta de Andalucía including no significant funding for the project in its draft 2010 budget. The budget includes just five million euros for the project, which has an estimated total cost of well over four billion euros. The funding is aimed only at launching the process of some land expropriations and working on drawing up project plans.

The setback comes despite that fact that in March of this year the Junta awarded contracts for the first phase of construction, a four-kilometre double tunnel from Las Lagunas to La Cala de Mijas. The work was budgeted at 165 million euros, but the financing failed to come together and the project never got underway.

In June officials announced that the Junta and the central government were to create a joint public company to manage the project and seek public-private funding arrangements to help pay for it.

Call for ban on minimum interest clauses in mortgages

‘Abusive' clauses mean loan holders don't reap benefits of plummeting rates

By Oliver McIntyre

The banking consumer group Ausbanc last week called on the government to take action against the minimum-interest clauses that are included in many variable-rate mortgage loans and that have resulted in thousands of homeowners failing to benefit from dropping interest rates.

"On September 23 the senate unanimously approved a motion presented by the Partido Popular stating that the minimum-interest clauses abusive and demanding that the dropping Euribor rate be effectively translated to the mortgage loans," said Ausbanc in a press release.  "Now it is time for the government to take the measures necessary to apply this motion in the real world."

For months consumer groups have been complaining about the minimum-interest clauses, saying many banks hid them in fine print. Unwitting loan holders were hit with the surprise when the Euribor - the most commonly used interest rate index for Spanish mortgage loans - began dropping drastically but their rate adjustments reflected only a modest reduction.

While the Euribor has dropped from its historic high of 5.393 per cent last June to a historic low of 1.243  per cent this October, many homeowners have found they are stuck with a minimum interest rate of 3.5 or four per cent.

Complaint letter

In addition to calling on the government to force the banks to remove the ‘abusive' clauses, Ausbanc has posted on its webpage ( a template letter for consumers to individually address their own bank demanding that the minimum-interest clause be dropped from their mortgage.