2013 marked another record year for Spanish tourism: The problems of other Mediterranean countries and the attractive consumer prices not only attracted 5.6% more tourists than the previous year, but raised a number of vital questions for the sector.

Over the past year, 60.66 million international tourists visited Spain, which is even more than in 2007, when the Spanish coast was especially popular (58.6 million). Prime Minister Mariano Rajoy was the first to announce the joyous news, even before the statistics agencies. In doing so, he tried to support the positive disposition of the sector and the citizens. He said that tourism would soon get them out of this infamous crisis. In some ways, of course he’s right: 10% of the Spanish GDP comes from tourism and that has been on the rise since late 2012. Worried about political instability in Egypt, tourists changed their vacation plans and headed to the Spanish coast to enjoy the sun. The recovery of demand in the travel business has been a positive factor for several European countries. The tide of tourists has naturally affected the balance sheets: At the end of 2013, the Spanish tourism industry brought in more than €45.1 billion. By number of tourists, Spain overtook China, and came in third after the U.S. and France.

It is expected that the mechanism will allow for the creation of a so-called Single Resolution Fund that will total €55 billion over the next ten years, financed by contributions from banks into national divisions of the fund. This plan is supposed to provide the financing for the process of closing bankrupt banks without the need for funds from small investors. The framework of the SRM also makes the European Commission a regulator for the banking system, complete with the right to decide whether or not to close troubled banks within the EU countries.

European officials enthusiastically approved the plan at the end of last December. “This is great news. It is also in our interest that all banks in the European Union, not just in the Eurozone, were stable. In addition, this compromise finally breaks the vicious cycle between banks and the government,” said Czech Deputy Minister of Finance Radek Urban shortly after an agreement was reached. European Commissioner for Internal Market and Services Michel Barnier himself called the agreement a revolutionary decision that will “finally put an end to supporting banks at the taxpayer’s expense,” referring to the fact that, during the financial crisis, the EU provided financial assistance to troubled banks to the tune of €1.6 trillion.

A canal through Thailand’s Kra Isthmus is a project that could change the economic and political map of Southeast Asia. At a time when the center of global trade and to some extent politics is smoothly transitioning from the West to the East, it is difficult to overestimate the effects of opening a new transportation artery. But while there are many ardent supporters, the project has serious opponents as well.
The idea of constructing a canal across Thailand’s Kra Isthmus dates back to 1670, when the King of Siam asked French engineers to assess the project’s feasibility. But technological achievements in  the 17th century were not enough for the Siamese monarch to implement his idea. The second time there were thoughts of creating a canal came a hundred years later, when it became necessary for Siam to increase its military strength and quickly dispatch ships from the South China Sea to the Andaman Sea. Then in the 19th century, the British raised the issue of construction three times, but in 1897 decided to abandon those plans in favor of preserving the role of the Singapore port. Moreover, Queen Victoria’s subjects forced the Siamese government to sign an agreement prohibiting unilateral implementation of the Thai Canal project. Throughout the 20th century, the Thai government tossed around the idea of building the canal through the Kra Isthmus several times, but has yet to come up with the necessary funds.
Construction of the Thai Canal is once again being actively discussed in the 21st century, and in 2005 information surfaced that the Chinese government was ready to invest $25 billion in bringing it to fruition. But nothing happened. What is so attractive about the idea of the Thai Canal, that for centuries, politicians and businessmen can’t seem to let it be?

Diego N. Marcos, Professor of Macroeconomics of National University of Rosario, Santa Fe, Argentina in an interview to WEJ spoke about the internalization of Yuan (RMB), the effect it will cause on global economy and the conditions China has to keep it mind in order to succeed.
Mr. Marcos, recently, various experts all around the world started to alert the media about China’s monetary aspirations and its attempts to push dollar on the side, how would you assess such a tendency?

The issue of Yuan or RMB has two different levels of comprehension – domestic and international.
Let’s start with the international level. China today cannot refuse to play the geopolitical game, and this tendency would only grow with time. It simply has to be involved. And actively engaging on the financial and monetary markets is an inevitable measure. In the third millennium the countries with currencies used worldwide as “Reserve Currencies” are more powerful than those with a nuclear weapon. So, the internalization of RMB is not just a financial issue. It must be understood under a geopolitical-institutional approach that China is implementing.
The other side of the coin, the domestic level plays even deeper meaning. As any other institution of the Chinese economy, money will become global. You must also take into consideration that the previous model of growth that China has realized was based on the availability of land and cheap labor, but it is over now. Beijing’s new model for growth is based on the capital and technological capabilities. And part of the deal here is directly linked with RMB internalization.

Most Germans live in rented apartments, and these days Germany is becoming one of the most popular destinations for foreign real estate investors. So why are Germans so keen on buying and not renting?

The rate of homeownership in Germany is the lowest in the European Union: Only 53% of Germans in 2012 owned their own homes, whereas in the UK, for example, this figure reaches 70%, in Italy 72%, and in the U.S. 65%. Berlin leads the rest of Germany in the percentage of apartment rentals, at 90% of residents. In Hamburg, the figure is 80%.

Experts say that there are many factors that explain Germans? reluctance to buy their own homes. First, the German rental market is regulated by the government, which protects tenants? rights. Under existing legislation, rents are set by contract for a long time and can rise no more than once a year; the owner must give the tenant a minimum of three months? notice of a planned increase.  Furthermore, since 2013, it has been prohibited to raise the cost of rental housing by more than 15% over a three-years period, instead of the 20% that was allowed by the previous legislation.

A psychological factor also affects Germans? preferences: the historical aversion to the risk associated with a mortgage or loan to buy property. Moreover, the German banks themselves tend to be extremely conservative in their lending practices and require a voluminous package of documents on income and property to confirm the applicant?s ability to pay. At the same time, mortgage rates in Germany are actually quite low and in some cases may be 2.5% per annum for a 10- or 15-year loan. However, buyers are required to make a cash down payment of at least 20% of the price of the residence; and in fact, the down payment often ranges from 30% to 40%, and obviously not everyone can afford this amount. 

After 12 years, the group of countries known as the BRIC remains one of the main drivers of growth in the developing sector. The pace has slowed somewhat in recent years though, and experts are pointing to a new group of potential leaders, known as the MIST. Are Mexico, Indonesia, South Korea, and Turkey really able to overtake the BRIC? Or was the new acronym created to attract the attention of foreign investors to these countries, in hopes of increasing investment flows there, as occurred with the BRIC after 2001?