Will an Irishman’s pension follow prices in Spain?

Colm Rush, originally from Dublin, has taught English in Spain, Italy, Cyprus and Tunisia, as well as Ireland and England. He now lives in L’Ametlla de Mar in Catalonia

When the topic of rising prices came up, the first thing that came to mind was restaurants. With the easing of Covid restrictions, eating out is on the cards again, but I soon noticed that the price of this great Spanish institution, the “menu del dia” had increased in my local restaurants by 13 € to €15 and from €14 to €17. Not only that but the choice on the menu had decreased in some cases and become more standardized. In certain areas of large cities, where tourists do not swarm, you may still be lucky enough to come across a menu for less than €10, but this is rare.

I must mention here that I live in a small but important fishing port in the province of Tarragona which also serves as a tourist resort in the summer, mainly for the people of Barcelona and the French, who discovered it years ago. In fact most of the apartments in the block where I live are summer residences and empty in the winter. Thus, most restaurants on the seafront cater to tourists and only open on weekends in winter.

One exception is Maura’s restaurant, just above the town beach, which I stumbled into on my way to my daily midday swim. Eloy, the owner, his son and his mother were busy wiping the tables on the covered terrace. When I brought it up he said yes, his costs had increased significantly recently. The worst was electricity, up about 30% and up, which didn’t surprise me at all as it’s been the subject of a lot of commentary all winter. The price per kilowatt per hour is constantly displayed at the bottom of the screen during the newscasts here, along with up-to-date Covid statistics.

Other increases, such as olive oil, were more understandable; insufficient rainfall leads to smaller harvests, which usually means higher prices. This problem is set to get worse, it seems, as rainfall in the Mediterranean region is expected to drop by up to 20% over the next ten to twenty years. But why sunflower oil, which restaurants use more for frying, should increase in price intrigued him. So did paper: toilet paper, paper towels, napkins, tablecloths – all up around 20%. “It’s oil,” Eloy said, “when it goes up, everything goes up!”

Colm Rush in Catalonia, where prices are rising

I then inquired in the shop of the local agricultural cooperative, where my olives are pressed. It’s an interesting place selling mainly wine and olive oil at very competitive prices. Their margin must be minimal because they charge less for the red wine I buy there for everyday use – a crianza at around €3.50 a bottle – than the Terres Altes cooperative that produces it!

“Yes, prices have increased over the last year – up to 20 percent. However, we don’t really understand why. Wine producers blame this on more expensive bottles and packaging. We don’t have increased the price of our own olive oil (€25 for a 5 liter carafe) because we are a small producer,” he told me.

I use the gas station in the small industrial area nearby as it is a local business and much cheaper – plus they also offer a small discount. Most of their customers are long-distance truck drivers, so only one of the four pumps has a car-sized gun. I filled up with diesel before a recent trip and 33 liters cost me €44 before discount, or €1,348 per litre. (On my next trip, I noticed that the price at most gas stations was the standard €1,515 per litre.)

In addition to the sharp increase in transport costs, prices in general are increasing. Think of the poor trucker who still pays for his truck and tries to feed his family. He has no return

When I asked the attendant about prices, he immediately replied that a year ago diesel only cost around €0.95 per litre, an increase of over 35%. “It’s really difficult for truck drivers, especially those who own their own trucks. In effect, this means an increase in costs / a decrease in income of two to three thousand euros per month,” he said.

In addition to the sharp increase in transport costs, prices in general are increasing. Think of the poor trucker who still pays for his truck and tries to feed his family. He has no return.

My last visit that day was to a stationery store in town. The refill for my Cross ballpoint pen was over €8; it was just under €6 before. When I mumbled something about the price hike, the retort was sharp and passionate. “Don’t talk to me,” he said. “It’s madness, there is no accountability. Prices usually go up a bit at the start of the year, but they’ve gone up twice since Christmas. Everything increased by about 20%. A pack of 500 sheets of paper that used to cost €5 now costs €6.20! There seems to be a trend towards this, with the papermaker corroborating the restaurateur and winemakers in their mention of 20% increases.

On this subject, a friend remarks: “Of course, we must take into account the increase in wages and the minimum wage.”

There was indeed a significant increase in the minimum wage in Spain in 2018 and 2019. It was long overdue and much needed, rising from €736 per month to over €900 per month. However, the last increase, in 2022, was only €35. While raising the minimum wage to the magic mark of €1,000 per month, it cannot be held responsible for the price increases I have mentioned.

I recently received a letter from the Spanish Ministry of Inclusion, Social Security and Migration informing me of legislation that has just come into force which guarantees that pensions will maintain their purchasing power. As a result, my pension for 2022 has increased by 2.5%, which corresponds to the average price increase in 2021.

What was this phrase that Mark Twain attributed to the British statesman Disraeli? Ah yes, “There are three kinds of lies: lies, fucking lies and statistics.”

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