Saturday, November 18, 2017

Thoughts from Galicia: 18.11.17

Spanish life is not always likeable but it is compellingly loveable.

- Christopher Howse: A Pilgrim in Spain. 

If you've arrived here because of an interest in Galicia or Pontevedra, see my web page here.

Cataluña
  • The case against the delinquents holed up in Brussels has been adjourned until December 4, so that they can have more time to prepare their cases, at the start of what promises to be a protracted legal battle, says the BBC.
  • The ex Scottish First Minister, Alex Salmond, has interviewed Sr P on RT News, the Moscow mouthpiece. Prior to this, Mr S had embarked on a career as a stand-up comic. Maybe that remains his real ambition.

Spain
  • El País insists that the cases of PP corruption going through the courts prove the independence of the Spanish judiciary. While this is good to see, I suspect there is a counter argument
  • The Spanish economy evinces excessive control and insufficient investment for the future, says an FT article here, if you can access it.
  • Spain has enough doctors but not enough nurses, it says here. Perhaps there'll be more of the latter when Spanish nurses flee the UK's NHS after Brexit.
  • Ambrose Evans-Prichard reports that El Pais has warned that – [following the imminent budget developments cited below] – Spain fears a cliff-edge halt in transfers to large areas such as Andalucia, Extremadura, and Castilla-La-Mancha that depend on projects and development schemes financed by Brussels. AE-P adds that: During the 2014-2020 period, Spain’s share of EU structural funds of this kind is over €37bn (£33bn). A cut-off would hit the country disproportionately hard. It would provoke a furious political reaction from Madrid, famous for fighting its financial corner tooth and nail. . .  While – [for the EU as a whole] - the sums are manageable in macro-economic terms, they are politically neuralgic and run across deep cultural and ethnic fault-lines.  Cuts risk inflaming the simmering dispute between the Dutch-speaking Flemish and the francophone Walloons, and aggravating the North and South rift in Italy over subsidies. The separatist clashes in Spain could become even harder to handle. Money is a crucial element in all these tensions.

Europe
  • Brussels has begun to circulate the first confidential papers on how to plug the gaping hole in EU finances after Brexit, provoking serious alarm in regions and poorer countries across the bloc. British withdrawal will slash EU revenues by 16% once the current budget framework ends in 2020, forcing Brussels to confront vocal vested interests. It threatens to ignite bitter divisions. . . . There is zero chance that the EU’s front of disciplined unity over Brexit will survive once the battle of the budget starts in earnest.
  • Ask yourself: how do you build a national, healthy party democracy when millions of voters’ first affiliation is with their language-based identity? How do you get people talking about questions of policy and competence if politics is about guarding your cultural grouping? How do you win loyalties through and across society when party following is fuelled more by identity than policy? Where is nationwide democratic consent when a general election becomes a contest between internal groups? Which brings us to Belgium, which has not had a nation-based rather than region-based general election since the 1950s, and which took a record 589 days to form a government in 2010. The Walloons and the Flemings are essentially two tribes. The Flemish in the north, the Walloons in the south, plus a bilingual nugget in the middle, more commonly known as Brussels. Walloons vote for Walloon parties, Flemings for Flemish parties. Governments are always coalitions, and only an almost hermetically-sealed federal structure stops the country falling apart. Maybe this is why - friends tell me - the country is rife with inefficiency.
  • Sir James Dyson, Britain's best known entrepreneur, on the EU-UK negotiations : I don’t think they’ll do a deal. You can’t negotiate with that lot, as I’ve found out from 24 years of sitting on European committees. No non-German company has ever won anything, and nobody has ever been able to block any suggestion from the German cartel. Never. They stifle innovation, the EU. And the European Court of Justice, well, that’s frankly crooked. Fighting words from a Brexit supporter, then. Despite the fact he's getting millions in subsidies for his massive farming interests in the UK. 

The UK
  • Helpful advice from a UK judge on the issue of the moment: A reasonable, right-thinking member of modern society would not consider it shocking or discreditable for a man, at the end of a social evening alone with a single woman of equal status whom he found attractive and friendly, to put his arm around her waist and ask her if she would like them to become closer. Provided he did nothing positively indecent, and took ‘no’ for an answer, most right-thinking people would accept this as a normal part of life.
  • And more on this theme from William Hanson, author of "The Bluffer’s Guide to Etiquette": Any potential relationship should be initiated away from work. These days people have to have a heightened awareness of what is acceptable. I would verbally, without any physical contact, seek a signal that they are interested in pursuing a relationship. The British like to tiptoe around the issue. It is much better towards the end of a meal to say ‘Please correct me if I am wrong but have I been picking up on some signals that you would like to be more than colleagues?’. If you get a ‘no’, laugh it off. There is no need to feel awkward.

I do hope my male compatriots find that helpful.

Today's Cartoon

More on today's UK society . . .

Health and Safety regulations, I'm afraid, Mr Molestropp".

Friday, November 17, 2017

Thoughts from Galicia:17.11.17

Spanish life is not always likeable but it is compellingly loveable.
- Christopher Howse: A Pilgrim in Spain

If you've arrived here because of an interest in Galicia or Pontevedra, see my web page here.

Cataluña
  • A Belgian court will today decide whether to extradite Sr P et al back to Spain, to face a raft of charges. Faced with the option of a French or Dutch(Flemish?) speaking judge, Sr P and his colleagues have gone with the latter. This is said to be because he might be more sympathetic to separatists. I wouldn't bet on it.
  • Click here for some details of the damage done to local businesses.
Spain
Needless to say, Punchski has poo-poohed allegations of interference in matters Spanish and has spoken threateningly of 'damaged relations'.

The English Language
There are, of course, any number of 'academies' on the Iberian peninsula offering English language courses. And folk get desperate to give theirs a catchy name. One I saw yesterday down near the border with Portugal made me smile – Royal Celtic Bay.

Galicia:
Fifty years ago, Galicia and Ireland had much the same population. Since then, Ireland's has grown by 2 million, while Galicia's has fallen by 200,000. Needless to say, it has 'aged' as well. Not good news.

Finally . . . 
I'm down in Portugal for a few days, where:-
  • Tailgating at high speeds is apparently still a sport, and
  • Many drivers seem to be unaware what zebra crossings are for. Or at least of who has the right of way.
Which reminds me . . .
  1. Someone in an internet group dedicated to the challenge of driving in Spain commented that one only got fines because of breaking the law and that he'd never been fined in 30 years here. I thought of him last week when driving to Santiago from Pontevedra and experienced the speed limit going up and down 3 times in less than100 metres. And again yesterday morning when passing the 50 sign on the road alongside the Miño river, where the radar machine is right below the sign. And where the ticketing cop told me it was a shame I wasn't from around there as everyone knew about this set-up. 
  2. The 4 zebra crossings at the roundabout at the bottom of my hill now have flashing cat's-eyes in front of them. This follows the fatal accident I mentioned a few months ago, after which the question was asked: Why does someone always have to die before we do anything? Not for the first time, of course. Nor the last.
Today's Cartoon

 Saviour of the World. A picture more authentic that that of Leonardo Da Vinci . . .


Thursday, November 16, 2017

Thoughts from Galicia: 16.11.17

Spanish life is not always likeable but it is compellingly loveable.

- Christopher Howse: A Pilgrim in Spain. 

If you've arrived here because of an interest in Galicia or Pontevedra, see my web page here.

As usual on a Thursday, I'm greatly indebted to Lenox Napier of Business Over Tapas.

Cataluña
  • Not much to report today. If you're interested in knowing Everything You Need to Know about the Catalan Regional Election, click here.
  • And, if that whets your appetite, click here for a remarkably sane internet dialogue on the subject of Cataluña v Spain. Never thoughts I'd see such a thing on the internet . . . 
Spain
  • The Catalan debacle might not have solved anything there but in the rest of Spain it's had serious political implications. The main opposition PSOE 'socialist' party has distanced itself from Rajoy's PP government and the upstart Podemos party might well have openly split into factions. The usual problem with parties of the 'far left', where purity is both relative and critical.
  • Specifically, the PSOE leader has said that there can be no doubt but that the Government has used the Cataluña crisis to avoid talk of the PP corruption.
  • He's also accused the 'moderate' Ciudadanos party of being to the right of the PP party, as least as regards Cataluña. And he might well be right.
  • From Reuters: Over half of Spaniards want early national election. More than half of Spanish voters favour an early national election, a survey showed on Monday, as support waned for a minority government embroiled in the country’s worst political crisis in decades.
  • Horasur reports that that the EU considers Andalucía to be the most corrupt region in Spain. In second place is Galicia. The least corrupt is La Rioja.
  • There are 8 high-speed AVE stationswhich have fewer than 150 passengers a day. Tardienta in Huesca achieves only 1.5. I guess it makes sense to someone.
  • Spain does very well indeed in this survey of the place of women in societies around the world.
  • Not content with publishing Business Over Tapas, Lenox Napier now gives us Hard Spanish News. Which has gone straight into my RSS feed. Appreciated best if you speak Spanish.
The UK: Is it fair to conclude that the basic rule for inter-sex relations in the Anglosphere is now: You can look – indeed, we'd love you to look – but you can't touch in any way without at least verbal permission. But preferably in writing.

The English Language
The Guardian tells us here that these ultra modern words/ are not exactly new:-
  • High: Drugs 1932. Wine 1627
  • Booze: 1730s
  • Not!: 1860
  • Hang out meaning to spend time or live: 1811
  • Crib a dwelling place: Shakespeare
  • Babe: 1915
  • Doable:1449
  • Legit: 1897
  • Sexed-up: More than 70 years old. 
  • OMG: letter to Winston Churchill
  • Unfriend: 1659 
Galicia
  • After the prolonged drought, reservoir levels here are down to their lowest ever. After restricting supply to at least one major company, some municipalities are now considering placing restrictions on the notoriously rule-averse private citizens.
  • Nationwide, the impact of lower rainfall on the vegetation is alarming. Shown here are maps for end October 2014 and 2017. It's not widely known that the northern third of the country – for good reason – is known as Green Spain. One wonders for how much longer . . .¡
Finally . . . As an Evertonian, it pains me to cite this impressive video. Go to minute 4.10 for a stirring rendition. I'm left with a reminder that the devil has all the best tunes.

Today's Cartoon


Wednesday, November 15, 2017

Thoughts from Galicia: 15.11.17

Spanish life is not always likeable but it is compellingly loveable.
- Christopher Howse: A Pilgrim in Spain. 

If you've arrived here because of an interest in Galicia or Pontevedra, see my web page here.

Cataluña
  • A spokesperson for one of the parties in Catalonia's deposed government admits the secessionist executive 'maybe wasn't prepared' for rolling out independence. And that the Pope is a Catholic
  • I suspect my friend and fellow blogger, Lenox Napier, is a tad sceptical about all the reports of Punchsky involvement in the Catalan referendum.
  • Ada Colau is the mayor of Barcelona and “The main spokesperson for Barcelona en Comú, a citizen platform which stood in the May 2015 Barcelona municipal elections.” El País is unhappy with her, for reasons set out here. If, after reading this, you can't understand the local political shenanigans, you are not alone.
  • Matthew Bennett comments on the clash of 'moralities' in the first article below this post. Google translation, basically. 
Spain

  • Antibiotic usage. Here's something I didn't know. Well, the bit about the deaths anyway.
  • President Rajoy: There's a profile of this Galcian here, courtesy of Guy Hedgecoe.
  • Corruption: I haven't mentioned this for ages - distracted by Cataluña - but here's Guy Hedgecoe again on this.
  • My medical insurance company gives me the option of getting pre-authorisations for treatment on line. After 3 confusing emails from them, I finally discovered how to do this. Only to find I still have to go to their office in the city. Is it me? Or is it what I mentioned yesterday - the traditional failure on the part of companies to put themselves in the place of their clients? And to leave web page design to los freakys?
  • Which reminds me . . .  The national rail operator - RENFE - is reported to be nearing its first annual profit in its existence. My guess is there's been some serious cost cutting. Night trains to Madrid from Galicia for one thing. And web page maintenance for another.

The UK

There's a nice article on 'transgender bonkersness' at the end of this post. Second article.

Galicia

Well, at least one of our many drug clans is being tried by a court in Vigo. To be more specific, the relatives of barons already in jail. 

Finally . . .

It must be Xmas . . . The local traffic cops have made their usual announcement about an increased number of alcohol and drug testing patrols.

Today's Cartoon



ARTICLE 1

The 21-D is going to be a duel between two moralities Matthew Bennett

Whoever wins, nothing has been done to solve the underlying socio-political problem, which is none other than the existence of a morality (the separatist) opposed to the Spanish.

The more I think about it, the more it seems to me that December 21 is a mistake for the elections in Catalonia. It has been two weeks since Puigdemont fled to Belgium, like a rat of the separatist Titanic, after the peaceful surrender of Trapero and Pere Soler, to a cell without complaining. The National Court has supported Lamela in its decision to send the Jordis to provisional detention and there are also all former counselors who appeared for their judicial appointment in Madrid. Last Thursday, Forcadell accepted article 155 and promised not to skip the Constitution again.

In the words of Judge Llarena, still the President of the Parliament and "All the defendants have not accepted the intervention was derived from the application of Article 155 of the Constitution but rather have stated that they either renounce future political activity or that those who wish to continue exercising it will do so by renouncing any action outside the constitutional framework." Neither will there be a Catalan republic. This Monday, from Belgium, the dismissed President said in Le Soir: "A different solution to independence is possible".

Yesterday I called the Congress again, and again they confirmed that as of October 30: no deputy from Esquerra or PDeCat has resigned from their seat in Madrid. Rufián and Tardà are still there. Now, it seems that all parties that have conspired to vote for the independence of Catalonia two and a half weeks ago have sought to participate in the evil regional elections called by Rajoy, and it seems that they will do so freely, without joint lists or coalitions.

The CUP has abandoned demands to sign the first decrees of the new republic and is committed to participating and offering a stand-alone candidate alone "as far as possible, clearly rupturist, pro-independence and leftist"; Puigdemont has abandoned the idea of ​​the "President's list" to stand as number one in PDeCat, presumably from Brussels; and Esquerra has abandoned the logic and announced in a twisted way, that although the elections of December 21 are "illegal and illegitimate", what makes them legal and legitimate is ... the participation of Esquerra.

Even so, their voters will vote for them and there is a risk that they will win, although Sigma Dos for El Mundo suggests that there could be a significant abstention among Junts Pel Yes voters. None of the non-separatist parties, for the time being and with that poll, it seems, will get near a number of important seats. With these numbers, PP + PSC + Citizens won't reach the 68 seats needed for a majority, nor would a PSC + Citizens + Podemos (I say Podemos but who knows what name they will choose at the end for these elections). If the panorama does not change during the campaign, the non-separatist version would have to be a political monster of the PP, the PSC, Ciudadanos and Podemos.

We must not rule out, then, a result with two non-majority blocs - the separatists on the one hand and the constitutionalists on the other - with Podemos as the hinge. What would Iglesias do then?

Whoever wins, nothing has been done to solve the underlying socio-political problem, which is none other than the existence of a morality (the separatist) opposed to the Spanish. Separatism and Spain are not possible. The separists wanted that there was, illegally, another Justice separate from the Spanish one. They have ignored Spanish authority in a treacherous way (from the point of view of Spain) but they have been loyal to the authorities and to the separist version of the world, which they consider legitimate. They have a series of "sacred" references that already ignore Spanish constitutional co-existence and - inside and outside of Spain -  use with gusto the invented story of Rajoy's neo-Francoist oppression. They are very powerful pictures.

Will 2 weeks of campaigning (which will be fascinating) strengthen the moral narrative of each side, or will the separatist version fade, devoid of leaders and impetus after a declaration of powerless independence?

ARTICLE 2

Children dressing up are playing – not having an identity crisis: Allison Pearson

The other day, a friend handed her 13-year-old son some washing to take to the utility room. “Good boy,” she said automatically. Assuming my gender there, Mum?” he shot back with a cheeky grin.

The mother burst out laughing. “Has your school gone transgender bonkers, then?” she asked.
The boy – sorry, young person of no fixed sexual orientation trying on multiple identities – confirmed that his school had indeed gone bonkers. Every other child in his year was suddenly claiming to have “gender issues”.

This is new, isn’t it, this spraying around claims of gender dysphoria willy-nilly? Oops, no willies, please, it might be transphobic. Keep up at the back, Marjorie!

As my GP told me recently, in all but a tiny handful of genuine cases, this is a fashion, a fad. In general, and despite aggressive campaigning by transgender activists, boys will still be boys and girls will be girls, and positively revel in that difference. The proper response of any institution to a fad is to hold tight to its core values and wait until it has passed.

How dismaying, therefore, to see the Church of England this week getting its cassock in a twist as it jumped on the bandwagon.

In its first official guidance to its 5,000 schools on transgender issues, the Cof E said children should be able to try out “the many cloaks of identity” without being labelled or bullied. Youngsters should be free to “explore the possibilities of who they might be” – including gender identity – and Christian teaching should not be used to make children feel ashamed.

At nursery and primary school, they should be able to choose the tutu, tiara and heels, as well as or instead of the helmet, tool belt and superhero cloak, “without expectation or comment”. The document, which offers advice on how to challenge transphobic, biphobic and homophobic bullying, also says young children “should be afforded freedom from the expectation of permanence”.

God help us. Let’s start with the fact that no primary school I’m aware of in the past 20 years has ever prevented a child dressing up in a costume of their choice. Far from it. In my son’s year, one little boy regularly wore fairy wings and sparkly tights and no one batted an eyelid. Nor was it any surprise when he later revealed he was gay, and his friends were incredibly supportive and happy for him.

It's the talk of “freedom from the expectation of permanence” that is utterly wrongheaded and shocking. Have the authors of the Church document actually met a small child? Little kids are deeply conservative. They like regular meals and fixed bedtimes and a Mummy and a Daddy, or at least a small cast of utterly dependable adults. It makes them feel safe. Himself used to accuse our then five-year-old of being more reactionary than Enoch Powell. “Are we still in England?” Tom would wail whenever we took him too far from his home. Trust me, he would not have been pleased to be told he might grow up to be a lady.

From the age of three onwards, infants enjoy imaginative play, becoming surgically welded to a Batman costume, a Cinderella gown or a dog onesie. It doesn’t mean they want to become a girl with one shoe, a Labradoodle or a member of the opposite sex. They’re just *playing*. And that play is only enjoyable in a context of stability and, yes, permanence. Carte blanche is terrifying to a child.
Justin Welby, the Archbishop of Canterbury, says that children “should be at liberty to explore the possibilities of who they might be without judgement or derision”. Indeed they should. But what about the freedom of little girls to believe that they will grow up to be amazing women like their mum, and of little boys to feel confident they will one day be a man like daddy? Why should any insinuation to the contrary be part of classroom life in the pre-sexual years just to satisfy the demands of a tiny minority?

Lately, the transgender bonkersness has taken an increasingly sinister turn. Joshua Sutcliffe, an Oxfordshire maths teacher, was suspended after he said “Well done, girls” to two teenagers, one of whom identifies as a boy. Mr Sutcliffe apologised after the pupil corrected him, but six weeks later their/his mother lodged a complaint. This week, the poor chap must attend a disciplinary hearing to face misconduct charges for “misgendering”. Miss Gendering? Is she a friend of Miss Apprehension and that ghastly Miss Ogyny?

Meanwhile, up in Scotland, the cravenly politically correct government has told teachers they should allow primary pupils who wish to switch gender identity in school to do so without informing parents. A report produced by LBGT Youth Scotland, and endorsed by Holyrood, also states that teachers should consider approaching the local authority if parents are “struggling to come to terms” with their child’s transgender identity.

So, you send six-year-old Murray off to school in the morning and, by lunchtime, he is identifying as Morag. If you ever find out, and you are narrow-minded and bigoted enough to object to this disturbing behaviour in your young child, then the teacher can inform on you. Chilling, isn’t it?

This has absolutely nothing to do with science. It’s cultural politics. Liberal western society has progressed to the point where it has pretty much run out of things to feel oppressed by. The truly important things like sex discrimination and racism are not solved, not by any means, but vast improvements have been achieved. By trumping up one of the few remaining grievances of a tiny group (not actually shared by many trans people), the Left can undermine traditionalists and convert society to its own secular ends. So boys are girls and girls are boys – who dares to say otherwise?

The Church of England, that’s who should be saying it. C of E schools should be basing their policies on the needs of all pupils, not catering to one small sub-group at the expense of other children, particularly girls. Encouraging impressionable children to believe that changing sex is just another choice on the school lunch menu is at best daft, and at worst plain wicked.

God knows where all this will end up, and even He’s not sure. Sorry, She.

Tuesday, November 14, 2017

Thoughts from Galicai: 14.11.17

Spanish life is not always likeable but it is compellingly loveable.
- Christopher Howse: A Pilgrim in Spain

If you've arrived here because of an interest in Galicia or Pontevedra, see my web page here.

Cataluña
Spain
  • More fineable offences for motorists here. But one can't really argue with these.
  • RTVE - Not quite the BBC, then.
  • I've mentioned the hurt reaction in Spain to what's seen here as Anglo arrogance and condescencion. Courtesy of my friend David, here's an excellent Guy Hedgecoe response to this aggrieved view.
  • I've said that the pace of innovation in Spanish supermarkets is nothing like it is in the UK or - I suspect - in the USA. But I have to report that Mercadona is now offering rice masala. Not sure if there's any meat in it.
  • I've been back a week and have had to produce my ID 5 times already. It's astonishing that the UK can get by without these . . .
  • I've also had to thrice deal with a computer confused by the fact I have 2 forenames and 1 surname. Like most everybody outside the Hispanic world.
  • My Spanish bank displays a common weakness of failing to put itself in the place of its clients. I say this after wasting much time trying to send a small transfer to Holland. Largely because the internet page doesn't make it clear there's a separate process for national and international transfers. Which - believe me! - can cause problems with IBAN numbers. I now wait to see if the bank implements my recommendation for a re-design of the page.
Europe: 
  • Quantitative easing by the ECB has worked wonders for Italy’s apparent fiscal health.  Its effects have flattered the Italian fiscal profile.  . . . It has mopped up half the gross supply of Italian debt, shaving at least 100 basis points off Rome’s borrowing costs. But it has not changed the country's underlying pathologies. And QE is about to run down and possibly end. So what now?
  • But there are even bigger problems for Italy. For the first time in 60 years, it hasn't progressed to the finals of the next World Cup.
The UK:
  • Talking about innovation . . . Is this progress or madness?
  • Brexit: See the DQ article at the end of this post. Can anyone sane still believe in a 'hard Brexit'? Some of us never did, of course. Especially not Richard North of EUReferendum.
Pontevedra
  • Innovation yet again . . . We have a new 'Indian' restuarant in the city. This is at least the 3rd attempt to get enough (conservative) Galicians to eat spicy food. I predict another failure.
  • I mentioned our beggars yesterday. At midday, I saw one of them moving away from this (illegally) parked expensive car:-

But maybe it wasn't his and he was just panhandling there . . . 

Finally . . . I was pondering yesterday the (mostly empty) new houses behind mine. It took 4 years of great noise and dust to prepare the site for around 20 dwellings, 17 of which are empty and might never be occupied. One wonders on which bank's books they sit as an 'asset'. Anyway . . . the first challenge the builders had was to transform the front of a granite escarpment into an (illegally) high wall made of, yes, granite blocks. And here it is, with a lampost to give you an idea of its height . . . 



THE ARTICLE

Global Banks, City of London Raise “Disorderly Brexit” Alarm. Don Quijones

Shifting trillions of euros of derivatives positions could be hugely disruptive. 

The growing prospect of a hard or disorderly Brexit is sending jitters through the global financial community. This week the Financial Times reported that a group of “large financial institutions with big London operations” had met with US Commerce Secretary Wilbur Ross to express their dissatisfaction with the lack of progress in Brexit negotiations.

“The fears over a potential Brexit no-deal are rising, as we move within 16 months of the UK’s exit from the EU,” said Joshua Mahony, market analyst at IG.

While New York stands to benefit from some of the disruption caused by the UK’s separation from the EU, there is rising concern that Brexit could set off global ripples. That fear was compounded on Friday after Teresa May announced plans to set the UK’s departure date and time (March 29, 2019 at GMT 23:00) from the EU in law, warning she will not “tolerate” any attempt to block Brexit.

“[The banks] are becoming nervous,” said City of London Corporation’s policy chief Catherine McGuinness after meeting representatives of US banks earlier this week. “It wasn’t just curiosity, it was concern at the lack of progress that we have been making, and nervousness that it had implications beyond Europe’s borders in terms of causing disruption to markets.”

For the City of London Corporation, the prospect of a messy Brexit is even more terrifying than it is for many of the global banks it hosts within its coveted Square Mile. The Bank of England has warned that up to 75,000 jobs could be lost in the financial sector following Britain’s departure from the European Union. But it’s not just jobs that are on the line; so, too, is the Square Mile’s role as the world’s most important financial center, not to mention the backbone of the UK economy.

In recent months the European Commission and the European Central Bank have redoubled their efforts to compel financial institutions to move at least some of their operations onto the continent. “I have a very clear message to both smaller and larger banks: the clock is ticking,” said Sabine Lautenschläger, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB. “No one knows how Brexit will play out, and that’s why all affected banks should prepare themselves with a hard Brexit in mind.”

Some banks are already taking action. Goldman has set aside the top eight floors of a 37-story block under construction in Frankfurt which is expected to be ready for occupation in the third quarter of 2019. Just a few months before that, construction work on the bank’s new £350m European headquarters in central London should be completed.

Ten days ago, Goldman Sachs CEO Lloyd Blankfein, posted a tweet of an aerial shot of the half-finished construction in London, with the words “expecting/hoping to fill it up, but so much outside our control.” As the head of an organization with alumni at the very top of both the Bank of England and the European Central Bank as well as tentacles that reach out to just about every corner of the old continent, Blankfein  is clearly selling Goldman short, if you’ll excuse the pun.

Goldman’s not the only major bank hedging its bets. On Tuesday Germany’s struggling behemoth, Deutsche Bank, announced that it had signed an agreement to occupy at least 469,000 square feet at a site under construction in the City of London. The move comes despite a warning in April that thousands of Deutsche Bank’s UK staff may have to relocate after Brexit. To that end, Deutsche has begun work on a Frankfurt booking center that would take up some of the slack if the German lender was forced to turn its London branch into a subsidiary when Britain leaves the EU.

Most banks would prefer the status quo to continue, with the lion’s share of their operations remaining in London, which already has the physical infrastructure, legal apparatus and friendly political and regulatory culture needed to support the full gamut of global financial services. But the Brexit vote has presented rival European nations and the ECB with a golden opportunity to undermine the UK’s domination of Europe’s financial industry. They won’t let it go to waste.

In Germany, the benchmark index, Deutsche Boerse, has introduced a profit-sharing scheme on interest rate swaps at its clearing business as it seeks to wrest trade from the London Stock Exchange, which it came within a whisker of acquiring just months ago. Some of Europe’s biggest trading houses in swaps, Bank of America Merrill Lynch, Citi, Commerzbank, Deutsche Bank, JP Morgan, and Morgan Stanley, have already registered an early interest in the program, Eurex said.

For the City of London, the potential loss of its dominance of Europe’s clearing business would be a hammer blow, as we warned in May. The U.K. is estimated to handle 75% of all euro-denominated derivatives transactions, equivalent to around €930 billion of trades per day. It’s also home to roughly 90% of US dollar domestic interest-rate swaps. If it were to lose much of that business, as many as 232,000 jobs could be on the line, warns London Stock Exchange Group Plc CEO (and former Goldmanite) Xavier Rolet.

However, any attempt to move euro clearing away from London to the continent is likely to take years to implement and will ramp up costs for companies across the region. In September the US Commodity Futures Trading Commission (CFTC) Chairman Christopher Giancarlo warned the European Union against making “unilateral” changes to how the bloc treats foreign clearing houses amidst fears that shifting derivatives positions totaling trillions of euros across the English Channel could be hugely disrupting.

With so much at stake, the outcome of the next year and a half’s negotiations between London, the world’s most important financial market, and the EU, the world’s largest trading bloc, is likely to have implications far beyond the EU. If a hard, messy Brexit cannot be averted, what happens next in the global financial markets will ultimately depend on whether or not the banks, regulators and central banks have taken enough provisions for an event that is both entirely unprecedented and wholly unpredictable. And that is hardly comforting. 

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