Saturday, February 13, 2010

The Economy again; The Governance of Spain; Statistics; Miracle creams; Breasts; Sardines; and a Message from Alfie.

It may not be quite what Greece is going through but we now have the first signs of the forecasted street protests against any austerity measures from the Spanish government. The unions have announced a number of demonstrations later this month against proposals to raise the retirement age from 65 to 67. By the date they take place, there may well be even harsher measures to protest against but we will see.

Meanwhile, the king (of all people) is reported to have spent this week trying to get the government, the opposition, the unions and the business community to come together and agree a National Pact to deal with the country’s economic ills. Fat chance, I would have thought and most commentators seem to agree. Perhaps if both Sr Zapatero and Sr Rajoy made way for people of higher calibre. Wherever they might be.

I’ve talked from time to time about the essential ungovernability of Spain from Madrid. And this was before I read in the Economist article I cited yesterday that, thanks to continued devolution over the good years, the central government only directly controls a fifth of total public expenditure. Though maybe it can indirectly control a lot more simply by cutting off funds. Which should go down well with those regions which thrive on ‘solidarity’.

One of the commentators to said article claims that statistics from the Spanish government are even less reliable than those of their Greek counterparts. Well, I have no idea whether this is true or not – though the property statistics always seem to be a bit of a joke – but I can say that it’s not unusual to see errors in the tables produced in the national press. Such as ABC’s labelling of this year as 1010 in one of its articles this week. Which doesn’t exactly inspire confidence.

I had wondered how long it would be before the left-of-centre El País returned to its charge against the head of the Socialist government, Sr Zapollyanna. Not long at all, it seems. For today’s edition contains a hard-hitting article entitled “There must be change.” OK, it’s a slogan used by the party some years ago but I think we all know that the writer is getting at.

El País today also carries today a two-page ad for a cream for men that will remove fat from the waist and abdomen while you sleep. Well, maybe but I can’t help wondering in how many other countries such dubious claims can be openly made.

Spain’s much-heralded and recession-driven deflation continues to pass me by, at least. The 2.50 euros I paid for a coffee in a corner of the Plaza de Dos De Mayo in Madrid this morning may not be at Paris levels but it’s still far more than I can ever recall paying in Spain.

Penultimately . . . I was interested to see that the effigy burnt on Ash Wednesday in Madrid is that of a sardine, just as it is in many towns along the Galician coast. The reason, of course is that “The Burial of the Sardine is a Spanish tradition that ridicules the ecclesiastical tradition of burying the fat to mark the beginning of Lenten fasting. Over the years, pig fat has become a sardine.” In Pontevedra, we set fire – with barely a nod in the direction of Health & Safety – to a large stuffed parrot. But the explanation for this is less straightforward.

Which reminds me . . . The famous personage brought in to kick off the Mardi Gras/Carnaval celebrations in one Galician city was a local actress made famous by the national TV series “Without tits, there’s no Heaven”. One of her lines was that “Without cocido, there’s no Heaven”, which got the required response because cocido is the national Galician dish, comprising every bit of the pig and a few other things in a rather fatty casserole. Being something eaten weekly from the minute Gallegos let go of the maternal mammaries, it’s a great local favourite. But, to be honest, most foreigners can take it or leave it. Or, putting this another way, it’s not my idea of Heaven. (I was going to say I prefer tits but this would be very crude. So I won’t).

Finally . . . And still with El País, the paper also carries a major article with the summary “Brussels must temporarily relax the Maestricht criteria for Spain, Greece and Portugal, as done for Germany and France. It’s too early to return to liberal orthodoxy and to withdraw the fiscal stimuli.” All very predictable but it does allow me to introduce this article from my friend Alfred B. Mittington.

Who’s afraid of et dona ferentes? 

It’s Springtime in Madrid! President José Luis Rodriguez Zapatero (a.k.a. ZP) is wringing his hands in pure delight as he saunters through the Moncloa corridors of power! Yes: the axe has fallen! The dyke’s been breeched. The toothpaste is out of the tube. Brussels has caved in and promised to shore up the Greek house of cards. No matter how vague, how wishy-washy, how reserved yesterday’s statement may have been: it is a firm pledge to come to the rescue. And that implies a golden promise for our hard-pressed Spanish Premier: what they will do for one food stamp nation, they will have to do for Spain too. It has all gone so neatly and beautifully! Greece has taken the chestnuts out of the fire and will be blamed the most by those who pay. Next the Northern Nations will need to drink Mr Socrates’s cup of Portuguese poison. Then, and only then, when these sinners have been duly served and spanked, Spain will follow, innocent unobtrusive Spain, only a lesser transgressor who never asked for such a thing, who would never presume, who now merely takes its rightful share of a pie already baked for others... Aaaah, a rosy dawn of glittering new Euros emerges above the northern horizon! And with luck, it will include some firm demands for strict austerity, which the Spanish PM will then use to the best of his considerable ability to sell his stringent anti-social reforms to the baffled folks back home (I stick to my prediction of January 9th!).

For the moment, we must, of course, maintain that Spain will never need help. That Spain will even contribute to the Greek bail-out! For Spain’s economy is robust, and trustworthy, and vital, as our PM just declared in Parliament and in a string of Brussels press conferences. Those who do not agree with that grand vision simply ‘do not understand the strength of the Spanish economy’. No matter that these ignorant dupes include fellows like Paul Krugman, Nobel Prize winner of Economics (a man who ‘does not understand the Euro’, according to Treasury Secretary Ms Salgado of the sad canine countenance, whose own economic genius was unknown to the world until she was suddenly asked to replace the capable, but critical, Pedro Solbes). And they include the very Spanish and very socialist EU commissioner Joaquin Almuña, that faithless PSOE friend (‘We shall not permit,’ declared a seething 1st Vice-Premier Maria Teresa Fernandez de la Vega, ‘that anybody sheds doubt on the health of the Spanish economy!’ – after which Mr Almuña went in hiding because he feared she would send the marines). And the IMF. And the World Bank. And the Financial Times. And the Wall Street Journal. And… Oh well: fill in the rest for yourselves, dear readers. The clique includes anybody who ever counted for anything in the global realms of Economy. All of these are morons. And not just that. But they are Jews, and Speculators, and Masons, and Vile Agents of a Dark Evil Empire, all of whom are out together – if we may believe recent declarations fomented by Minister José Blanco - to undermine the prestige of PM ZP from pure spite alone

For that is really the only problem Spain has today! She is the innocent victim of Speculators in the pay of an Evil Foreign Conspiracy. I hope Mr Blanco will allow me to disagree, and to teach him a little something about sharks in high finance. Speculators are indeed evil. But for all their nastiness, they never take on a well-run country which enjoys a healthy economy. They do not do so because they would lose. And they’re not in there to lose, but to gain. Just as curanderos [Ed. ‘quacks’] will never profit from the fit and the healthy, speculators gravitate only towards countries that cannot defend themselves because they do not control their economy. Therefore an attack of speculators – sickening as it is - must be read as an indisputable sign of what you so vehemently try to deny. The Spanish economy is in Big Trouble

But Praise be to Brussels: help is now on its way! The German, the Dutch, and the Scandinavian taxpayers will once again gurgle up the funds and fortunes needed to stop the holes in leaky Latin hands. Let there be no misunderstanding: I do not pity the Northern Nations. It is their own dumb fault. Ten years ago, when the Euro was introduced against the liking of most Europeans, critics were silenced and sceptics shut up with the firm assurance that – under the rules of the so-called Stability and Growth Pact of 1997 - no participating nation would be allowed to run up a deficit bigger than 3 %. Anyone who did so would be automatically slapped with tremendous fines and fearsome sanctions. Then came the next fiscal year and it turned out that France and Germany – Yes Indeed!!! - wanted to run up a bigger deficit. Were they slapped? Were they mercilessly sanctioned? No, of course not! To do so would be short-sighted, we were told. Those who proposed such mindless application of the rules did not understand the bigger issues, failed to see the merit in irresponsibility, the splendorous light that emerges from setting your house on fire! And so the 3% rule was quietly abandoned (See this NYT article written at the time).Naturally the Club Med nations were fast to follow the example. And faster still to make the most of it. And here we are today. Our Southern friends ran up tremendous burdens on very leaky tyres. So let France and Germany not now complain! They brought it on themselves. They reap what they sowed in arid soil! Now they pay through the nose for what they would not let in through their ears!

Only, there is a little set-back to the Glorious New Rescue. One which happy-go-lucky PMZP may not have entirely foreseen, since he speaks no other language and knows no other countries. Allow old Al – who knows his Northern Countries well enough – to prophesise a little once again. In the past, the Northern taxpayers were willing to toss billions of subsidies to the suffering Mediterranean Nations, because they wished to help save them for democracy from their own dictators and autocrats (turning a blind eye to that old dictum about countries getting the governments they deserve…). Franco, Salazar and the Greek Colonels were, in their own weird and posthumous way, Club Med’s most efficient fundraisers. This love-fest lasted some 25 years and cost a king’s ransom. But the Northern generations who remembered the likes of Franco have now gradually been replaced through death and baby-booms by youngsters who have never even heard those dictatorial names, but who do remember vividly that they were never asked to vote for the Euro, and were, on the other hand, blatantly denied the validity of their No vote on the European Constitution because it wasn’t the Right Answer. 

These, I assure you, will be foaming at the mouth and fuming from the ears to have to finance the Southern food stamp-nations once again from their own paycheques. They surely will pay – because they have no way to refuse (whom of the Europutado-hopefuls in the national parliaments will you vote for to put an end to this generosity-from-alien-pockets?) But – being forced into the role of Northern Breadbasket – they will start to take a closer look at these Euro-Mezzagiorno countries. What will they see? In Spain they will discover two regions which make good money and are well-organised – the Basque country and Catalonia – and a central Madrid government who makes a mess of things and wastes every boon and bonanza, before it plays big with other folk’s pennies and boasts of its big balls, like - remember that one of ZP’s only a year ago? - that Spain is the 8th Economic World Power and on its way to overtake the GNP of France…’!! Mark my words: opinion-makers in the North will soon suggest that it might be a useful idea to give such efficient, well-behaved, thrifty regions (Porto in Portugal, Lombardy in Italy, the Basque Country and Catalonia in Spain) a greater influence, some more weight, a little more leverage in Spanish and European affairs, so as to avoid Repetition…. In the past, these arrogant regions were not much appreciated in Northern eyes due to the capriccios and innuendos of gentlemen like Mr Bossi and his Northern League. But once people start to contemplate such matters with their pocketbooks, sympathies change quickly, and anything might happen…

Therefore Woe to Madrid! The Greek bail-out may well be a Trojan horse clad in glittering Euros! And it might well be better for ZP and his cronies to take a rather more Laocoonical view, and cry out for all to hear: Timeo Danaos et dona ferentes! Which reads in a modern translation: “I fear the Greeks even if they bring me the dole and donations”! 

Alfred B Mittington.
Author of ‘A Crowbar to Keynes’ (Harvard School of Economics, Cambridge 1949)

6 comments:

trabizonspor said...

Is "The dyke's been breeched" a hint that Vice President De la Vega has been indulging in a bit of reverse swing, or did you mean "breached"?

PS The Germans actually said they're not going to bail out Greece until after the revolution.

CafeMark said...

Any Thoughts from Galicia? ;) I'm sure we can just subscribe to that Ambrose chappy if we wanted to hear negative stuff about the Euro (and seeing as it's Ambrose, wrong 90% of the time)

Colin said...

Mark, You might enjoy this:-

http://blogs.telegraph.co.uk/finance/edmundconway/100003753/the-financial-reporting-bubble/

But would clearly disagree with this comment:-
"Actually, the one exception is Ambrose: he did describe in some detail what could and would happen. And he turns out to have been incredibly accurate."

Colin said...

Trabizomspor,

What an image! Between you, you and Alfie gave me a very restless night.

Colin said...

T.

I am in Madrid with my elder daughter, who's asking me who you are . . . .

Colin said...

Trabizonspor,

Alfred is mortified by the error but, as he freely admits, neither spelling nor gossip are his fortes. "I had to ask around so as to understand what this Trabizonspor fellow meant." he writes to me. "And to my horror they told me that Ms F de la Vega is a lesbian happily married to her long-time partner. Had I known, I would have shunned the word 'dyke'; and had I been anything but a dumb ass, I would have spelt it 'breached'. My apologies to you and your readers."

Search This Blog