New Rules For Obtaining A Portugal Golden Visa Residency By Investment Program

Can I Get A Portugal Golden Visa Residency By Investment Program?

Portugal has expanded the possibilities of the “golden visa” program The country began to operate new rules for obtaining a residence permit through investment. 

Foreigners can apply for a local residence permit by investing from € 350,000 in a new or existing Portuguese company for a period of three years. An important requirement is the creation or maintenance of five jobs.

Those wishing to obtain a residence permit in 2017 have new opportunities. The main privileges received by investors. But lucky and those who receive the usual residence permit. We represent the digest of the most significant events of the year in the immigration field.


Turkish citizenship for investment

Let’s start with Turkey, which finally announced the conditions for granting citizenship for investment. The project has been developed since 2015. According to the amendments to the relevant law, the owner of a Turkish passport can be buyers of real estate worth $ 1 million, as well as those who invest at least $ 2 million in local production or create at least 100 jobs in the country.


Residence permit in Estonia

In Estonia, simplified the rules of residence permit. First of all, the authorities abolished the obligation to reside in the country on the basis of a residence permit for at least 183 days a year. In addition, they canceled the requirement of mandatory registration with the Police and Border Guard Board if you were absent from the country for more than 183 days a year.


Residence permit in Luxembourg

In the Grand Duchy there appeared a residence permit program for investments. True, it does not give the right to obtain a residence permit in exchange for the purchase of real estate. A three-year residence permit can be obtained by investing at least € 500,000 in an existing company in Luxembourg or setting up a business,  provided that at least five employees are employed. Another possibility is to invest € 3 million in a special investment structure or a contribution of € 20 million to Luxembourg banks for at least five years.


Visas to Thailand

Kingdom authorities have restarted the Thailand Elite program, which has been in operation since 2003. By its terms, foreign investors can get a long-term visa in the country for a period of 5 to 20 years, enjoy tax privileges and VIP-service. Such a long-term visa is not a residence permit (residence permit), but its holders have greater advantages compared to holders of ordinary entry documents. So, those who wish to spend in Thailand for more than three months in a row should not come to the consulate personally but can do it by mail without paying additional fees. Every year the visa is updated without having to leave the country. The cost of participation in the program is from $ 15,000.


Residence permit in Italy for investments

Italy introduced investor visas. This means that foreigners can now apply for a residence permit in Italy if they invest a certain amount in the country’s economy. There are several options: € 2 million in Italian government bonds, € 1 million in equity of Italian companies, € 500,000 in equity of innovative start-ups or € 1 million in socially significant projects. An investor visa will be issued for two years with the possibility of extension for another three years. Program participants will be able to subsequently apply for a permanent residence permit (permanent residence), and after 10 years – for the country’s citizenship.


Residence permit for investments in Malta

Malta has simplified the conditions for obtaining a residence permit for investors. The authorities of the island approved at once several changes in the rules for granting a residence permit for investments. Among them is the opportunity for applicants to apply for a long-term residence permit and the lifting of the age limit of children that can be included in the application. The program is valid from May 2016.


Residence permit in Latvia

In 2016, Latvia obliged to pay € 5,000 for the renewal of a residence permit (permit ). And in 2017, I allowed foreigners who have received a residence permit by investing in the Latvian economy to pay a fee gradually. Those foreign investors who received a residence permit before June 6, 2017, are exempt from this fee.

A lawyer accused for the fourth time of staying money from clients does not appear at the trial

Prosecutor accuses him of staying 33,000 euros that a marriage gave him to negotiate the usufruct of a home

The lawyer of Lleida, Pere RF, of 60 years, accused of the fourth time of staying money of his clients have not presented/displayed the judgment that had to celebrate this Wednesday in the Hearing of Lleida.

Both the Prosecutor’s Office and the private prosecution have requested the Chamber to issue a search and arrest warrant and now the Hearing will have to resolve this petition.

The Prosecutor’s Office accuses the lawyer of having stayed, in 2008, 33,000 euros that a marriage gave him to negotiate with the bank the right of usufruct of the house where they lived.

The marriage complains that he did not realize until 2015 that the lawyer had not made any management and that he had kept the money.

It is not the first time that some clients denounce this lawyer, who has already been tried three times for other cases.

In the first trial, the criminal 2 of Lleida sentenced him to three years in prison and return almost 20,000 euros to the complainant.

The sentence was appealed at the Hearing of Lleida and the Chamber acquitted him because the facts had prescribed.

In the other two trials, which took place in the Hearing of Lleida, he was sentenced to a total of four and a half years in prison and return almost 230,000 euros to two families. Both are appealed to the Supreme Court.

In the trial that was to take place this Wednesday, Pedro RF was accused of staying 33,000 euros from a marriage in Lleida.

According to the Office of the Prosecutor, a bank in 2008 took out the right to the usufruct of the house where the couple lived for 33,000 euros.

The couple hired the services of the lawyer and gave him a check of 33,000 euros to negotiate with the bank.

The complainants say that when they asked the lawyer about how the negotiations were going on, the lawyer would take them long and say that he was making arrangements with the bank.

In 2015, the bank contacted the couple to offer them the sale of the usufruct and then they realized that the defendant had not had any contact with the bank and that the check for 33,000 euros had been left.

For these facts, the prosecution asks him two and a half years in prison for a crime of misappropriation as well as two years of disqualification and 10,800 euros of fine for a crime of professional disloyalty.

The public prosecutor also asks that the lawyer compensates the denouncing marriage with 33,000 euros.

The president of the Fegamp believes that the ‘Montoro Law’ has taken the policy "to the asburdo"

Defends the “very good health” of the economy of the municipalities and criticizes the Diputación de Ourense for not distributing funds in an “objective” way.

The president of the Galician Federation of Municipalities and Provinces (Fegamp), Alfredo García, has harshly charged the law for the rationalization and sustainability of the local Administration, known as the ‘Montoro Law’, a regulation that, in his opinion, has led to politics “to the absurd”.

In an interview this Sunday on Radio Nacional collected by Europa Press, the mayor of O Barco (Ourense) has indicated that this regulation has upset the way to manage resources in the municipalities, based on “go slowly”, “not inflate the budgets artificially “and, once the accounts are settled at the end of the year, act with the so-called” remnants “(money left over from the previous year) as of the month of May.

“We keep doing that, but what happens is that Mr. (Cristobal) Montoro comes and says: that money in the bank, in the bank they do not give me anything, I do not receive any remuneration, I can not provide services. bank and we can not solve the problems. “The absurd,” has influenced the socialist.

Thus, he has argued that this model of acting based on “the certainty of income that goes into cash” has worked “all of life” and that was the reason why most of the municipalities closed the year “positive”. “We were certain that we managed well,” he added.

Despite acknowledging that “there were abuses” by municipalities that administered “wrong”, Garcia criticizes the spending law to establish that “nobody” can “spend anything.” “You can not spend the one you cannot spend, but the one that pays suppliers, has a small debt, complies with the stability law, why not spend what is left over?” He asked.


Garcia has indicated that, over the years, municipalities have been assuming powers to try to solve “the problems that nobody solved” that arose from their neighbors, who have, as you remember, the local as the closest administration.

“We were gathering competences in services for which we did not have competences, above all, now the central government comes to tell us what we do by providing services for which we are not competent, politics has reached absurdity,” he lamented.


Questioned on the situation that the municipalities are going through economically, Alfredo García has indicated that they enjoy “very good health”, although there may be “some exception” such as the case of the municipality of Os Blancos (Ourense), which has had to be intervened by the deputation.

Regarding the relationship between the councils and municipalities, has urged the Provincial de Ourense to follow in the footsteps of other provincial governments in Galicia, where it has opted for “a new model” to ensure the distribution of funds “with objective criteria ”


On the other hand, Alfredo Garcia has also taken advantage of the interview on Sunday to claim that the Regional Law on animal welfare and protection – which comes into force in the coming days – comes accompanied by a budget for the municipalities, as these will be the ones in charge of putting “more money” for its application since they are the owners of the majority of animal reception centers.

“Any service or service transferred to municipalities has to be accompanied by the corresponding economic endowment,” said García, who has argued that the new regulations restrict the slaughter of animals so that the population of shelters will grow with the consequent increase in management cost for its holders.

Board asks the Government to comply with the funding in Dependency to which the law requires and that the finalist

The Committee of Experts must prepare a report in three months and the PSOE wants it to include 50-50 financing

The Minister of Equality and Social Policies of the Junta de Andalucía, María José Sánchez Rubio, defended this Thursday, in the constituent meeting of the Commission for the Analysis of the Situation of the Dependency System, that the new model of regional financing for the Unit must include that the central government pays 50 percent, which is what the law establishes, and that, in addition, that financing is “finalist” and “conditioned” to the services and benefits of the Dependency.

This is what the Andalusian official said in statements to journalists in Madrid, where she has participated in the constitution of this expert commission. Surrounded by his counterparts of Aragon and Asturias, Sánchez Rubio has indicated that this body that is now starting will be given a period of three months to make a final report that, in the opinion of the socialist communities, must establish “three fundamental aspects”.

These three points are to guarantee 50 percent of funding by the State and that it is a finalist and go exclusively to Dependency, “since it is the only way to ensure the real application of funds for the care of dependence” ; recover benefits and services and recover Social Security for carers, who are mostly women.

The Andalusian official has said that the community serves 288,000 dependents, with an investment of more than 1,100 million euros, of which more than 80 percent is set by the Board “a lung” despite the fact that the law says that financing must be 50-50 between regional administration and State.

It should be noted that Andalusia was the autonomous community that took the initiative to promote the debate in the Conference of Presidents so that the attention to the dependence is included in the regional financing model in order to avoid arbitrary situations between the different regions. In addition, the Andalusian Government has called for a national agreement that guarantees the sustainability, development, and financing by the Public Administrations of the Autonomy and Dependency Care System.

Therefore, the demand of Andalusia to the Government of Spain is “that in the General Budgets of the State of 2017 the agreed level valid in 2011 for our autonomous community, and that Decree-Law 20/2012, of 13 July and, therefore, replenish 13 percent of the minimum level per beneficiary person, “stressed the counselor.

Sanchez Rubio has detailed that from the Law of General Budgets of the State for the year 2012, the agreed level was suspended in its application without it has been restored. The amount of the last year in which this level was applied, amounted to 283 million euros in the autonomous communities.

As for the minimum level, the cut measures implemented from the Decree-Law supposed a “direct reduction” of its amount by 13 percent. This has meant that the state financing in relation to the expenditure incurred in terms of Autonomy and Dependency is already in 2016 by 17 percent. “This has led to an accumulated loss in this legislature of more than 3,500 million euros in Spain, more than 508 in Andalusia,” denounced the counselor.

He also recalled that “if the Government of the Nation contributed the funding that corresponds by law, Andalusia could serve 105,000 more people, according to the Observatory of the Dependency”.


In addition, the head of social policies in Andalusia has advanced that “to mitigate the effects of these brutal cuts of the central government in terms of dependency”, the Andalusian Government will shortly approve a plan that aims to advance the attention to this dependent without recognized benefit and in the reduction of response times in this area. This plan will allow serving 230,000 people in Andalusia at the end of this year.

In the last two years, Andalusia has incorporated some 70,000 beneficiaries (with a net growth of more than 20,600 people) with 93,000 new services, and more than 134,000 new assessments and reviews have been carried out.

In the budgets of 2017 a total of 1,181 million euros is recorded, 2.5 percent more than in 2016, for the development of the Dependency Law, an amount similar to that which the central government destines for all of Spain (1,250 million ). The commitment of the Junta de Andalucía is that this increase will continue until reaching 10% accumulated throughout the term.

Since the implementation of the Dependency Law ten years ago, the Andalusian Government has invested more than 10 billion euros in the care of more than 371,600 people, who have benefited from 488,300 benefits.

The new law will end the abusive clauses, but what are the ones signed until today?

  • The Senate approves this week the bill to strengthen the protection of mortgage debtors, debt restructuring and social rent.
  • The judge may assess an abusive clause and decree its inadmissibility.
  • The magistrate who raised these clauses before Europe considers that the problem is the victims who can not benefit from the elimination.

The Senate Plenary will debate on Wednesday the law of measures to reinforce the protection of mortgage debtors, debt restructuring and social rent, a norm that will be approved thanks to the majority of the PP. In the parliamentary debate, there were 3 veto proposals – PSOE and Entesa (PSC and ICV) – and 275 amendments, presented by PSOE, CiU, PNV, Entesa and Grupo Mixto. The PP did not admit any.

Among the novelties that have been introduced in the standard during its processing in Congress is, as a result of the recent ruling of the Court of Justice of the European Union, the modification of the executive procedure so that the judge can paralyze executions if it detects abusive clauses.

From now on, ex officio or at the request of a party, the competent judicial body may assess the existence of abusive clauses in the enforcement order and, as a consequence, decree the inadmissibility of the execution or, where appropriate, its continuation without application of those considered abusive.

The text also states that, in order to strengthen the protection of the mortgagor in the extrajudicial sale, the notary may advise the parties if there is any clause that could be considered abusive.

It can be said that in the immediate future the mortgaged will be protected against the “excesses” of the banks, but what about those who have already been harmed? As explained by the head of the Commercial Court 3 of Barcelona, José María Fernández Seijo, in the medium term this type of clauses will be eliminated, but the problem now is the number of victims who will not be able to benefit from this elimination.

The banks abused the citizens and did not sufficiently inform the clauses In an interview in Catalunya Ràdio, the judge who raised the issue of abusive clauses to the European Justice, has ensured that between 2000 and 2009 the banks abused citizenship and not they reported “sufficiently” the type of clauses that would be applied to them, reason why it has considered that all should be annulled.

According to Fernández Seijo, in a month there have been more than 300 claims against the land clauses of the mortgages of the same entity in Barcelona. Even before the Spanish law says so, the magistrate has urged that the judges that detect an abusive clause of interests paralyze and eliminate it, as dictated by the judgment of the Court of Justice of the European Union.

The judge demands a second-chance rule for those mortgaged who can not cope with the debt, in the same way, that most European countries have for more than 30 years, and that allows those affected to return to normal of consumption, after making an effort “.

Changing the mortgage law

Since the PP has resigned to present in the Senate partial amendments to the bill Measures to strengthen the protection of mortgage debtors, debt restructuring and social rent, the rule may be approved definitively this week, without having to pass again for the Congress.

The processing of the law in Congress has lasted for five months, since November 15, 2012, the Government approved the decree law of Protection of Mortgagors that was approved in Congress on April 18.

In addition, the European Union prepares a community directive on mortgage loans with which it seeks to ensure a greater and more effective protection to the mortgagor by eliminating the abusive clauses in the contracts. The future text must still be approved by the full Parliament and by the Member States, which will have two years to incorporate it into their legislation.

  • The SenateImage of the interior of the senate. (EUROPA PRESS)”> The Senate

Law firms prepare the artillery for the reform of the Euribor

After the preferential or ground clauses, the law firms already think of a new front

  • It is expected that the new calculation of the Euribor will enter into force in mid-2017
  • Experts warn that it may lead to new litigation

euribor 3

The law offices are grown. The judges are giving the reason to banking clients in financial cases and nurturing the business of the most belligerent law firms. With this road wide open, they already think about how to continue exploiting it. And they see a new opportunity on the horizon: the reform of the Euribor calculation.

The Euribor is at historic lows

In an environment in which the Euribor is at historic lows, the new calculation methodology of the index on which the European Monetary Markets Institute ( EMMI) is already working can lead to a battle between banking entities and customers. “It can even reach the courts,” says Juan Ignacio Navas, partner-director of the Navas & Cusí law firm.

The problems will be “obvious” and “the judicial importance very important,” the expert emphasizes since individual actions against banks are legally recognized. Customers with variable-rate mortgages that see how the index is increasing may think that the increases are due to this new calculation, an association that can serve as another wave of complaints.

This aspect seems key, especially since the entry into force of the new calculation, scheduled for mid-2017, may coincide with the start of the Euribor rise. And although this shift would also occur with the current calculation formula can trigger a new controversy to occur at the same time as the arrival of the new calculation.

In this sense, Ignacio Benejam and Juan Manuel de Castro, partners in the procedural area of RCD – Rousaud Costas Durán, consider that the “real” relevant will be if the new method of calculation increases or reduces the price of the loan with respect to the current calculation method.

For Navas, the regulations that have been established to follow “very diffuse” lines and the way to calculate it is “generic”. The bank is responsible for transmitting the data and from there proceeds to the calculation, so that financial institutions “come out with an advantage”.

In addition, Navas believes that the proposed methodology “will not improve much” the index. In his opinion, it is necessary to establish ” more strict criteria to make it more transparent “.

The index is calculated from the data shown by the bank’s panel entities of the Euribor

In the same line, from Arriaga Associates believe that “little, or very little, is known about the changes in the calculation parameters that will be used”. The experts of the firm to highlight the “transparency of the new calculation”, but they say that “it will harm the consumer”. Specifically, they explain that when using real data for its calculation, the index “must go up”, since “no bank pays interest for leaving money”.

For José Manuel Marín Granada, a lawyer at the Marín Law Firm, “the search for transparency is achieved”. Specifically, the expert underlines that in the current formula of calculating the Euribor there is the possibility of manipulating it, as occurred between 2005 and 2009 by some entities, but the implementation of this new methodology is carried out precisely “for avoiding it. ”

To do this, introduce a key novelty. Now, the Euribor is calculated from the data shown by the entities that are part of the Euribor bank panel. These data reflect the interest to which they are willing to lend money to other banks for a period of 12 months. That is, it is based on intentions, not real operations data. In the new methodology, the Euribor will be calculated from the data obtained in the real operations that do occur in the market. With this change, EMMI wants to give the calculation more transparency, solidity, and representativeness. And, above all, it wants to put an end to the suspicions surrounding the calculation of the index.


At the moment, all the experts with whom ‘Bolsamania’ have had the opportunity to speak agree that it is too early to issue verdicts and it is difficult to advance conclusions. Arriaga Asociados believes that the overlap of this new methodology in the sense of its application in the already subscribed loans must be known.

Thus, experts from the law firm clarify that until the repercussions are known, “it is difficult to venture into a possible claim and the outcome of it.” However, they do affirm that ” if the rights of the consumers are violated, it would be perfectly possible to claim a judgment and therefore, it would be feasible”.

Experts agree that it is ready to issue verdicts

In the same vein, Benejam and Castro do not rule out consumer demands that consider the new method to be “a condition different from the one agreed upon and not accepted by them.” “The change of calculation of the Euribor may lead to new litigation if both the mortgaged and the companies that have made operations based on the Euribor feel handicapped by the new calculation”, warns Pau Monserrat, an expert in financial products of iAhorro and Future legal.

Although for the lawyers of RCD – Rousaud Costas Durán the “great difficulty” will be to demonstrate that the new calculation has supposed an increase of the type of interest with respect to which they would have if the method continued being the previous one.

Rajoy limits the dialogue to "financing and self-government" within the framework of the law

  • The president rejects the mediation for Catalonia and reminds the independence movement that “their reasons and their supporters are not true”
  • Follow the latest news about the declaration of independence of Catalonia life

Rajoy limits the dialogue to "financing and self-government" within the framework of the law

Mariano Rajoy offers Carles Puigdemont the possibility of “dialogue about public services, financing, self-government, solidarity, and accountability”. The Spanish president has assured this afternoon in the Congress, where he has appeared at his own request, that “the framework of coexistence within the framework of existing organizations can be improved”.

It is the offer that the Government sends to the Generalitat. An offer that goes through the “return to legality” of Puigdemont, who yesterday declared the independence of Catalonia, but then suspended it. A gesture that has not been understood. For that reason, Rajoy sent this morning a request to the president of the Generalitat in which he asks him to “clarify” whether he has declared independence or not.

Support from the PSOE and Citizens

Rajoy has not given a deadline but will wait patiently for the answer, it is possible that for five days. Then, if Puigdemont refuses to return to legality, the Spanish president will apply Article 155 of the Constitution and suspend the autonomy of Catalonia. Account for that plan with the support of the PSOE and Citizens.

The president has explained all this in his speech in which her echazado “mediation” has requested the Government of the Generalitat. “There is no possible mediation between the democratic law and disobedience or illegality,” he was sentenced after thanking “the good intention” of the mediators who have offered during these days.

But in addition to offering dialogue and discarding mediation, Rajoy has not avoided highlighting the “serious moment that Spanish democracy is going through” and has not been spared pointing to the independence movement as guilty of the situation: “The rulers of Catalonia have used their position to carry out an unfair attack against the Constitution, the Statute and coexistence. ”

The Prime Minister also regretted that the “companies are leaving Catalonia because of the independence movement” and reminded the separatists that “they can not impose themselves,” because “their reasons and their supporters are not true”.


He also insisted that on October 1 there was no referendum for missing ballots, minutes, notifications, electoral census, census cards or auditors “The result was written in advance,” Rajoy has said after recalling that in many populations there were “more votes what inhabitants. ”

Rajoy has tried to maintain “prudence” throughout this process, but on October 1, the Government sent the police and the Civil Guard to close the polling stations. The image of the day was not good for the Executive. Rajoy has acknowledged that “no one can feel happy about the 1-O, or the image that was given, or the gross manipulations against the Police and Civil Guard” and has pointed out as “guilty to those who were determined to keep that query”.

Appeal to moderate nationalism

And he also wanted to express his “gratitude” to those who “have fulfilled their duty in defense of the common good, judges, prosecutors, police or civil guard”, who “have performed their work with dedication and professionalism”, he assured that some agents have suffered from being thrown out of the Catalan hotels where they were staying.

After making clear that “no president could break Spain because no one can skip article 2 of the Constitution,” the president has insisted that independence “is not peaceful, is not free and has very high costs” and after making the umpteenth call for the Generalitat “return to legality” has appealed to the “moderate and practice” nationalism, which in its day represented CiU, so that with its return to the political scene begin to “close wounds.”

Inflation Targeting and Goodhart’s Law

Goodhart’s Law is the notion that when a central bank begins to respond to an indicator of monetary conditions,  market participants will come to expect those responses and trade on that basis.   The result can be an indicator of a monetary policy that changes, however, market participants believe the central bank wants it to change.

For example, the simple Keynesian monetary analysis suggests that an increase in the demand to hold money will result in higher money market interest rates.   It would seem reasonable that a central bank would watch money market interest rates, and when they rise, increase the quantity of money to accommodate the increase in the demand for money.

Goodhart’s law, however, suggests that market participants will come to expect this behavior by the central bank.   If interest rates were to rise, there would be a strong tendency by market participants to postpone security sales and an added motivation to purchase securities.   Alternatively, lenders would rush to take advantage of the ephemerally higher rates, while borrowers would wait for them to fall again.    In the limit, actual market interest rates would not change at all, remaining exactly where the market believes the central bank wants them.     With no changes in interest rates actually occurring, such interest rates provide no information on actual monetary conditions.

If the central bank’s goal is to keep money market interest rates at a certain level, then this isn’t a problem.   It is only a problem if the central bank has some other goal, and is using interest rates as an indicator as to whether monetary conditions are consistent with achieving that other goal.

Consider inflation targeting.    If inflation expectations are well anchored, then there will be a tendency for those actually setting prices to raise them at the rate the central bank believes is appropriate.  Suppose that prices would rise by less.  The typical product is relatively cheap, and so there is an incentive to postpone sales and anticipate future purchases.    In the limit, prices continue to rise at the rate the market believes the central bank believes is appropriate.

If the goal is to keep inflation on target, then this isn’t a problem.   Inflation stays on target despite spending on output failing to shift with productive capacity.   If, on the other hand, changes in inflation are used as a signal that spending on output is different from productive capacity, then Goodhart’s Law suggests the signal is attenuated.   Strongly anchored inflation expectations make inflation a poor signal of an output gap.

Taylor-rule regimes have two characteristics that help solve that problem.   Most importantly, conventional monetary policy depends on the output gap as well as the inflation rate.     If the inflation rate were very sticky due to Goodhart’s Law, then the observed output gap will result in shifts in monetary policy that bring spending on output back into equilibrium with productive capacity.

Those economists (apparently including Taylor himself,) who advocate focusing solely on inflation would take away that benefit of the Taylor rule.   Under such a system, fluctuations in spending on output, in real output, and employment could occur even while the inflation rate remains on target.   Further, to the degree that output gaps are measured by observing changes in inflation, then Goodhart’s Law suggests that output gaps will consistently be underestimated, and changes in output in response to changes in spending will be identified as changes in spending and output matching changes in potential output.   In other words, inflation fails to change and while output does change, the failure of inflation to change results in a change in the estimate of potential output.

The other characteristic of the Taylor rule that helps solve this problem is inflation rather than price level (growth path) targeting.   Suppose that a monetary authority targeted the growth path of the price level.   The motivation to keep actual prices on the target growth path would be much stronger if any temporary deviation were rapidly reversed.   For example, if prices actually did rise only one percent, they would be expected to rise 3% to return to the trend.  This more rapid increase in future prices gives a stronger incentive to postpone sales and increase purchases in anticipation of the price increases relative to a regime where prices are just expected to rise 2% from the current level.

However, much of this intuition implicitly assumes market clearing.    If firms are setting prices and wages based upon what they think everyone else will be doing, then the central bank’s 2 percent target creates a pretty obvious Schelling point.   Our pay offers must be consistent with inflation.   Our prices must cover our costs, including the wage bill.   Individual firms sales should expand if prices increase slightly less than what other firms are going to charge.

Paradoxically, if every single firm raises prices at the target inflation rate always, then the result is the exact same thing as a price level target.    A firm raises prices 2 percent, and sales are disappointing.   Do they raise prices less next period?   Not if they expect sales to improve enough to clear markets to give a  2% price increase.

Suppose they finally give up on the central bank and raise prices more slowly.   The central bank now gets the signal that demand is growing too slowly.   And what does the firm do next?   Do they continue to raise prices more slowly, or do they go back to raising prices 2 percent?   The central bank is supposed to raise demand enough so that raising prices 2%  will clear markets.   And then, does the central bank determine that everything is good because inflation is on target–prices rose 2%?

What is the solution to this problem?   Naturally, I would argue that it is nominal GDP level targeting.   Suppose Goodhart’s Law somehow causes firms to keep nominal GDP on target.   In my view, that isn’t a problem.   Just like someone who believes that the sole goal of monetary policy is to keep inflation on target, I think that the sole goal of monetary policy should be to keep spending on output on target.   If market participants keep nominal GDP on target in anticipation of the monetary authority’s actions, then that is an advantage.   Spending is where it should be.

Madrid approves a law so that textbooks are free

  • As of the 2018-2019 academic year in public and private centers.
  • The loan system will benefit more than 615,000 students.
  • It will mean a saving of between 250 and 300 euros per child and academic year: “It is a respite for the families of Madrid on the September slope”.
  • The bill promoted by Citizens has had the support of all the groups in the Assembly.

Madrilenian students of Primary, Secondary and Basic Vocational Training will have free textbooks from the 2018/2019 academic year. This is reflected in the proposed law promoted in the Assembly of Madrid by Citizens, which was approved on Thursday after having been supported by all groups (PP, PSOE, and Podemos) in the Committee on Education and Sports after introducing some changes into the initial text.

Citizens estimated that the contribution to the program should be between 40 and 50 million euros in the first year The rule, which will affect more than 615,000 students in public and private schools, will provide the Community of Madrid with a free loan system of textbooks that will be universal, since until now the aid system was applied based on income. “The aid is very small, almost residual, this proposal looks at the middle classes, it will mean savings of between 250 and 300 euros per child and academic year, a respite for Madrid families on the September slope”, says the spokesman for Citizens in the regional chamber, Ignacio Aguado, who stresses that “the law defends the principles of universality and voluntariness.”

“The families that participate will not do it in a compulsory way as it happens in places like Navarra”, adds Aguado.

In order to benefit from the benefits of the system, interested parents will have to donate their children’s textbooks in good condition at the end of the next academic year 2017/2018 so that other children can use them. With this action, they will be part of the loan system and will receive the copies corresponding to the following course. Families must commit to taking care of the copies during the loan period. The management and distribution of books will be done in the school itself. “This will also teach children to learn the values of taking care of textbooks,” adds Aguado.

The Community of Madrid will finance the acquisition of the textbooks necessary for the start-up of the loan system, once those already contributed by the parents of the students have been deducted. Citizens estimate that the contribution to the program should be between 40 and 50 million euros in the first year, although this amount will foreseeably decrease in successive years.

Information campaign

Throughout the next course, the regional government must adopt all the normative and organizational measures for the application of the system as of the following course. Communication and awareness campaigns will be carried out by the educational centers to transmit to the educational community the essential aspects of the functioning of the system.

This norm began its journey almost a year ago. On June 23, 2016, it was already put to the vote in the Assembly for its consideration. Then, PSOE and Podemos voted in favor of the text and the PP abstained arguing that it was an electoral measure. The proposal went ahead with 76 votes in favor. The modifications that have been introduced in the last year have managed to convince the popular to give their support to the final text. Among the changes, highlights the extension of the standard to Basic Vocational Training and the inclusion in the text of digital books.

Rental price brake: Government wants to tighten the law

Housing market The government wants to tighten the rental price break

  • This Wednesday, the Federal Cabinet wants to pass a bill to tighten the rental price break. It contains some significant improvements for tenants.
  • Among other things, owners should be required to inform the new tenants of the pre-rent early. There are also changes in modernization.
  • Angela Merkel invites you on September 21st to a presidential summit in the Chancellery.

Robert Rossmann is a graduate of the German School of Journalism. He studied economics, communication, and political science. At the age of 27, he became editor of the Süddeutsche Zeitung. Previously, he had worked at Bayerischer Rundfunk. In 1997 Roßmann became deputy news head of the SZ, in 2000 he took over the management of the Bayern part. At the end of 2004, he moved to Berlin as a parliamentary correspondent. In 2007, he returned to Munich as the head of Newsdesk. Since 1 January 2012, he is deputy head of the parliamentary office in Berlin.

It took a long, very long time – and not only for the German Tenants’ Association for too long. This Wednesday, the Federal Cabinet wants to pass a bill to tighten the rental price break. With it also the so-called out modernizing of tenants from their homes is to be made more difficult. The then Federal Minister of Justice Heiko Maas (SPD) wanted to achieve both in the past legislative period, but the Union blocked his ideas.

Meanwhile, the situation in the rental housing market has worsened, especially in large and student cities. Maas’s successor, Katarina Barley (SPD), has already declared rents to be a “social issue of our time”. And in October, important state elections will take place in Hesse and Bavaria. Since a government can not allow a standstill without having to be afraid of being punished. For September 21, Angela Merkel has invited to a presidential summit in the Chancellery. It is important to show a success. This mixed situation has now made it easier for the SPD to move the Union towards a compromise that they had refused to grant Heiko Maas.

Locked up in your own home

Separate couples, families with children, retirees in much too large apartments – they all would like to move, but can not.

At the Coalition Committee meeting a week ago, the Union and SPD did not just agree on a pension package and changes in unemployment insurance. As a third compromise, the Coalitioners also noted at the end of their decision: “Until the Housing Summit, the Federal Government in the Cabinet, the Tenant Protection Act … decide.” For Justice Minister Barley, this was the long-awaited breakthrough.

Barley’s bill is titled: “A draft law supplementing the rules on the allowable rental amount at the beginning of the lease and to adapt the rules on the modernization of the rental property”. Behind the bulky headline are hidden some significant improvements for tenants. With the law, the government will “protect the tenants from repression and limit the consequences of modernization,” Barley has announced. The coalition will thus “prevent people in future from getting out of their homes and destroyed residential areas are destroyed.”

In order to achieve this, the government now wants, among other things, a duty of the owner to decide when renting an apartment interested parties before signing the contract the amount of the pre-rent. The already applicable rental price limit on the re-letting of apartments, although the amount – the new rent may not be more than ten percent above the local comparative rent. However, prospective tenants can not yet recognize whether the required rent is lawful. Because there are exceptions to the brake. For example, it generally does not apply to the first time you move into a new apartment. And on re-letting, the owner may demand the pre-rent from the new tenant, even if this is more than ten percent above the local comparative rent.

Barley sees this as one of the reasons why the rental price break has not yet worked as expected. The Minister refers to a combination of two points: On the one hand, you must hitherto as a tenant to make a so-called qualified complaint – so you must specify very precisely why the reported rent is too high. On the other hand, tenants in practice would have no knowledge of the amount of the pre-rent. This means that the information required for a complaint is unknown to most tenants. Barley now wants to change that with her lawyer. Not only is the obligation to provide information about the pre-rented area introduced, but also the procedure against excessive rent is made easier. In the future, a simple complaint will suffice, so tenants only have to state that the price brakes have been violated and do not explain this in detail.

There are also improvements for tenants in the apportionment of modernization costs

Compared to an earlier draft of the law, the information obligation of the landlord was even tightened. In the future, you will not only have to provide the pre-rent but also reveal all other possible reasons that permit an exception to the rental price break. These include, for example, extensive refurbishments or whether it is an apartment that was used and rented for the first time after 1 October 2014. This is to ensure that tenants can, in fact, detect in any conceivable case, even before the conclusion of the contract, whether the required rent is lawful.

Also with the modernization assessment, there are improvements for tenants. So far, owners can transfer eleven percent of the modernization costs to the tenant each year. There are owners who use this to evict tenants from their homes through intentionally over-renovations. In the future, landlords in areas with scarce housing should be able to move only ten instead of eleven percent on tenants. In addition, the government wants to introduce a cap on the increase in square meter rent. This can only be increased by a maximum of three euros within six years through modernization.

And what does the tenants’ association say? Although its director Lukas Siebenkotten praises “positive approaches”, they would make it easier to “pull the rent brake”. However, there will unfortunately still be too many “exceptions and special regulations” in the future, which limit the effect of the brake.