The wealthy elite in Spain, who typically spend their millions vacationing on the Costa del Sol and Costa Blanca have begun to fear that a consequence of the covid-19 crisis may arise in the form of higher taxes.
In order to hold on to their riches, Spain’s wealthiest population have decided to move their money away from Spanish territories and towards ‘safe heavens’ like Luxembourg or Switzerland.
The coronavirus pandemic did not only create a health crisis, but it subsequently triggered an economic crisis, which many experts say will be the worst in modern history and as significant as the 2008 financial crash.
The owners of luxury cars, super yachts and mansions are not ready to let these unprecedented times make a dent in their accumulated riches. This limited percentage of the population typically spends lavish amounts of its money in Costa del Sol’s Marbella or Costa Blanca’s Alicante, however, this year the uncertainty of the coronavirus has steered them towards caution.
Many believe that the economic crisis caused by the near paralysis of economic activity in Spain and over-extension of state benefits, such as ERTEs and SME loans, will effectively mean that taxes will increase in the near future.
Especially with the left-wing and socialist party currently in governmental power, the richest members of Spanish society are not taking any chances and overseas banks have seen an increase in interest from the Iberian Peninsula.
Luxembourg is an extremely popular destination as it is one of the largest banking centres in the European Union. A financial spokesperson from a banking institution over in Luxembourg admits that they have bee receiving “requests from clients to move the money away for fear of the Spanish political climate”, however he wishes to remain anonymous due to the sensitive nature of the issue.
This trend in moving finances away from Spain and toward the financial ‘safe heavens’ was recognised as early as in April when Pablo Iglesias, the vice-prime minister tweeted that “all the wealth of the country” is subordinate to the “general interest”.
This statement was a catalyst for the frantic behaviour of Spain’s super-rich as overseas institutions received an influx of interest and requests which can be read about in detail here.