What happens to anyone with a holiday home abroad if the Euro Zone collapses?

1.Explanation

Ok, if Spain leaves the Eurozone everything will be re-denominated into the new currency automatically, I presume they'd call it the peseta. The currency will then depreciate by up to 50%, this means that the value of whatever assets you have will also loose monetary value in exchange rate terms. This only effects you if you do international transactions, I'll give yo an example:

Your 50,000Euro (which is about £40,000) then becomes 50,000peseta but because the peseta depreciates it will mean that it is worth less in Sterling, if the peseta falls by 50%, you will get an exchange of around £20,000. However if you keep the money/asset in Spain then you haven't a problem because all prices will seemingly be unchanged, it s the exchange rate that has changed and not the internal costs and prices of the country.

However there are imports and exports to consider, as a Spanish citizen anything that you need to import will have doubled in price (in our 50% example) and everything you export will have halved in price for whoever is buying off of you.

2. Advice

I think you should look at your financial situation in the mid to long term (5-10years) and make a decision as to whether you think you can hold on to the property for a bare minimum of 5years but like I say 10 would be more ideal. If this is unrealistic then for goodness sake put that property on the market NOW and pray to God it sells within the next year, that is before the inevitable happens! If however you can wait a few years then you don't really have anything to worry about. While leaving the Eurozone will be immensely painful for Spain initially it will lead to an economic recovery after the big shock is over. This recovery will start 3-12 weeks after having left the Euro, this is because Spanish exports will be so cheep they will experience an increase in demand and that's where growth starts. This increase in competitiveness and a recovering economy will in time start to pull the exchange rate up, it will take time but Spain will recover, I suspect in 5-10years time things will start to look a lot rosier! As for any savings in your bank account, bring everything over here before the inevitable happens, keep an eye on the exchange rate when you do this though, the smaller the gap between sterling and Euro the better for you.

I hope you are able to hang on to your property, it is without a doubt the best option all round but obviously I understand your finances may dictate this decision! When Spain has left the Eurozone ad if you do still have the property, you are going to find holidaying a lot cheaper.

I've tried to explain all this simply without blinding you with too much science but I do have a tendancy to ramble :-S

hi msK i'm no longer a financier yet i'm able to do bills and e book protecting. Any economic company notice inspite of the forex is a promise that the notice would be exchanged for products and centers. the products and centers will nonetheless be there so we could hotel to interchange and barter together as the bankers take care of what proportion thousands and thousands they have lost. i assume the worldwide places in contact could revert to their former currencies together as each thing unearths its own authentic point remote from the synthetic forex of the euro. ultimate needs.