Even Dead Feel the Weight of Debt Crisis in Spain; Funeral services carry the highest VAT tax rate, alongside entertainment like nightclubs, and luxury products

Even Dead Feel the Weight of Debt Crisis in Spain

By Alexandra Di Stefano Pironti on 12:05 pm August 10, 2013.
Barcelona,Spain. Even in death, people in Spain cannot escape the economic crisis. Funeral services carry the highest VAT (value added tax) rate, alongside entertainment like nightclubs, and luxury products. “I paid over 7,000 euros ($9,300) for my husband’s funeral, and it was a simple service, with one of the simple coffins, which cost 2,600 euros ($3,450), without mementos or music, and only a few flowers. Besides, instead of a burial, we had him cremated, which is even less expensive,” Ana Mara Robles, a 66-year-old pensioner, told IPS. “For a middle-class family, that price is abusive,” said Robles, who retired a few months ago after working for years in the Barcelona traffic department. Jordi Valmana general manager of the “Cementiris de Barcelona” municipal company that administers the cemeteries in this city in northeast Spain, said: “Funeral services are essential for society and the public.” “The fact that VAT was raised from eight to 21 percent in late 2012 is appalling, and I think it’s a political mistake for funeral services to be charged the same tax as discotheques,” he told IPS.“We used to pay a reduced VAT, like in other European countries.”

But now funeral services pay the same VAT as theaters, cinemas, concerts, zoos, amusement parks, nightclubs and other forms of entertainment.

Prices have risen constantly, and the number of “entierros de beneficencia” or municipal-financed burials for those whose families are unable to foot the bill rose 20 percent between 2010 and 2011 and 38 percent from 2011 to 2012, when funeral services still paid the reduced VAT of eight percent.

With the new tax, these burials are expected to increase 40 percent this year, Valmana said.

Since funeral services in Spain passed from state to private hands in 1996, prices have risen steadily, a source with ties to the sector, who asked not to be identified, told IPS.

“Since the liberalization of these services, particularly since 2004, prices have risen faster than the CPI [consumer price index],” the source said.

“In 2004, a complete funeral service cost around 4,000 euros ($5,300), and today a normal average funeral costs between 6,000 and 7,000 euros ($8,000 to $9,300),” the source added.

Valmana said the proportion of charity burials is the highest in 20 years, despite the fact that around half of the Spanish population pays funeral insurance, which costs 20 to 30 euros ($40 to $53) a month for the simplest coverage and up to 70 euros ($93) for the most sophisticated.

“We have agreements with the social services of the different city governments to bury the deceased if the family cannot afford to do it,” said Joan Ventura, director of Altima, the private company that has 20 percent of the funeral services market in Barcelona and surrounding areas.

According to Valmaa, the process to obtain an “entierro de beneficencia” is simple.

The social assistant in the hospital where the person died and the city government must document that the family cannot afford a private service.

“Years ago I decided to make the ‘entierro de beneficencia’ a dignified procedure, since the deceased were buried in common graves until 2006,” Valmana said.

“Now we use the highest level of niches, which are hardest to reach and no one wants them.” Cementiris de Barcelona also offers subsidized burial services for 300 euros ($400), which is 400 euros below cost.

“The burial service is sacred for families,” Valmana said.

“They arrange a decent funeral even when they are having economic troubles and have to borrow money from the rest of the family.”

But he said the crisis in Spain, which has one of the highest unemployment rates in Europe, nearly 27 percent, has led families to save on frills, such as the quality of the coffin or the marble marker, the flowers or the wreaths – and they even go without music in the ceremony.

Ventura, meanwhile, blamed the problem on the change in taxes. “This business has not been affected much by the economic crisis, but it has been hurt by the increase in VAT.”

Horse-drawn carriages The other side of the coin is the funerals of the rich, and the growing social differences in Spain.

According to a report this year by the Catholic humanitarian organization Caritas Diocesana, titled Inequality and Social Rights, the crisis in this country has led to a 30 percent increase in social inequality between the richest and the poorest since 2006.

The study says Spain has the highest level of social inequality in the European Union.

While the number of municipal-financed burials is on the rise, the wealthy have their pick of extravagant services. Cementiris de Barcelona is planning a 19th-century style luxury funeral complete with horse-drawn carriages, “targeting a very rich segment of the population who are looking for something different,” Valmaa said.

For its part, Altima offers green burials, where seeds are planted with the ashes of the deceased, to symbolize, when the tree starts to grow, the cycle of life and death. “We have planted 1,000 trees so far,” Ventura said.