Monday 6 March 2023

Spain's Ferrovial to Move its Headquarters to Amsterdam

‘Last night’, says the Argentinian founder of Jazztel Martin Varsavsky, ‘I was at a business-dinner in Madrid. There were twelve of us. The other eleven were all defending Franco, while I was saying that it wasn’t just a terrible dictatorship, but that Franco kept Spain for almost four decades in the prehistory of economic, social and political advancement’.

Can you imagine the subject at a similar dinner setting in Berlin?

These are the economic elites –especially those of Madrid– whose fortune did not arise from free competition or the entrepreneurial spirit. A good part of the moneyed families got rich through their proximity to power: with monopolies, awards and contracts from the Administration. Contracts from the very same “public titty” that they go on to criticize so furiously later on.

That’s to say, contracts with taxpayer money: those same taxes that they will later try to avoid paying.

Curiously, it’s a leftie who coins the phrase: ‘a true patriot is one who pays his taxes’. And here’s Pedro Sánchez in a similar vein: ‘We seek to compete on quality not on precariousness. To do so we need fair taxation: those who have the most must pay more’.

Which brings us to Rafael de Pino, the founder of Ferrovial back in 1950 (a Nationalist engineer who married well), and more to the point, to his son Rafael del Pino Calvo Sotelo, holder of the third largest fortune in Spain.

The news is that one of the largest Spanish multinationals, Ferrovial, has decided to leave Spain. Or to be more precise, to move its registered office to the Netherlands. Ferrovial doesn't have a construction or service business there, or anything like that. Therefore, it is not known exactly why they are leaving. The group chaired by Rafael del Pino has been very unclear in explaining the reasons that has led his company to flee Spain.

One conservative source in Spain blames the commies: “The pressure against banks and energy companies; the ‘tax on the rich’ - in reality a punishment for successful professionals; the government’s fiscal and labour policy; the constant increases in the minimum wage; the instability generated by Podemos’ attempts to impose an interventionist framework similar to that of Latin American populism; and the demonisation of the creation of profits, wherever they come from and whatever their context, have not contributed to generating an attractive climate for companies”.

To say that over there in Amsterdam one will have more access to obtain financing sounds like an excuse. Ferrovial can seek financial resources anywhere in the European Union, as so many companies do, without moving their headquarters. We read that the company is known for constructing public buildings, or railways (it started out in the fifties as Renfe’s builder of choice).  The beneficial tax-system enjoyed in the Netherlands is soon coming to a close, so why move? The Spanish one, by the way varies from an average Corporate Tax of 17% for companies with over 5,000 employees, down to as little as 3.59% on profits.

One reason for the relocation could be that the Americans hold around 30% of Ferrovial shares, and considering the Biden Plan to repair the US public infrastructure, the Netherlands and Wall Street have a close working relationship.

Del Pino had been promising the PP leader Núñez Feijóo only last month that he would be working for ‘a better and more prosperous Spain’. Conversely, following the surprise announcement, Feijóo has been criticising Pedro Sánchez for his indignant reaction to the news of the Ferrovial move, calling Sánchez a ‘hooligan’ and that he should ease his level of tension against Spanish Business. Over on the other side, Ione Belarra, president of Unidas Podemos, has unkindly called Ferrovial ‘a pirate company’ and says that all the public money spent on it ‘should be returned to the Spanish taxpayers’.

“The choice is simple: either Podemos and interventionism, or companies and prosperity” says another conservative opinion.

The bottom line, as a bean-counter would say, is that the company stands to save some forty million euros in taxes by its move to Amsterdam.

Biting at Rafael del Pino’s heels, the fourth richest man in Spain is Juan Roig, the owner of Mercadona (where the price of the shopping-cart seems to be continually on the rise) with 3,400 million euros kept under the counter next to the shotgun. Standing well in front of Rafael del Pino (3,800 million) and his third position in the wealth list is Nº 2 Sandra Ortega and her dad, Nº 1 Amancio Ortega. The two of them can lay claim between them to 58,900 million euros.

But, you know, is it enough?

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