Wednesday, August 31, 2011

Scroll down for another Midday EU/Politics special, if you have a good stomach.

The British government is said to be concerned (why?) at the increasing numbers of Spaniards moving to the UK to work. The total is 85% up on last year, it seems. Meanwhile, here in Spain more than 30% of the unemployed are reported to have declined to take jobs offered to them, for one reason and another. Which may help to explain why the four people who serve me every day are Argentinean, Colombian, Venezuelan and Brazilian. And why unemployment at the end of August is predicted to be above the already record levels of 21% or so.

On the issue of councils who'll be denied government funds if they haven't had their 2010 accounts audited, the relevant ministress now tells us there are 2,500 of these and that Galicia's total is 105. Now, you might think that, in the 21st century, it'd be routine for spenders of taxpayers' money to be monitored in some way. But not here, it seems. Nor elsewhere, perhaps.

Which reminds me . . . Only in Spain???:

1. A ton of cannabis has been recovered from smugglers who called the Coastguard when their boat broke down off the Murcia coast.

2. A parish priest has had to be protected by the police, after turning on his congregation and making, first, general and, then, particular criticisms of its members. The Church Militant. Reminded me of the tales I've heard of priests who live with their 'housekeeper' and their children but berate churchgoers for not being better Catholics.

I mentioned the other day the falling forecasts of Spain's economic growth this year. The IMF had now published its own and this is down to 0.7%. And to only 1.3% for 2012, as against 1.6% previously.

Charles Butler, of IBEXSalad, doesn't think much of our new bank, created via the fusion of the region's two savings banks (cajas/ caixas)- "NovaCaixaGalicia can't accept that their books don't balance and their rotating presidency plan (not to mention its unpronounceable name), meant to calm jealousies, is a loser." Which I feel is just a bit of gratuitous cynicism, not worthy of this blog.

Talking of which, here's details of a new TV comedy series, focusing on recent scandals in the UK. Sounds promising.

Well, we might not have any international (or even Spanish) cuisine worthy of that name here in Pontevedra but today I came upon the town's 7th and 8th kebab houses. Right next door to each other, in fact. Just outside the old quarter, which I suspect is the only good thing to be said about them.

If this works, attached is a recording of the one bloody infuriating tune that the pipe-playing panhandler can manage. After you've endured the toddler crying.

If that didn't work, here in compensation is a lovely video of someone trying to get his car into a garage in one of the narrow streets of Pontevedra's old quarter. It looks to me as if the son has just brought home the car his Mummy's bought for him . . .

And here is a full-frontal view of the garage he was trying to get into.

We have the last big fiesta of the year at the weekend - The Feira Franca, or Medieval Weekend. Various measures have been taken around the old quarter to make it look less modern and here's one example, in the shape of a bin covered in sackcloth. And full of ashes. Not.

I won't be bothering to take fotos this year. So click here if you want to see some.

Finally . . . Two bits of excellent corporate news . . .

1. Spain's only decent supermarket chain - Mercadona - has overtaken El Corte Inglés to become the country's most profitable store. Admittedly the competition isn't up to much but they deserve it.

2. Telefónica have finally recognised there's a market and that they have competitors and so have significantly reduced their (very high) ADSL prices. But only if you also have one of their mobile phones. Which is never going to happen. But hopefully there'll be a general fall in prices that I'll be able to benefit from.


St. Andrew’s Day, 1935.  This poem also turns up in 'Keep the Aspidistra Flying', and occupies Gordon Comstock’s thoughts throughout much of the novel. According to the Times Literary Supplement, Gordon’s only book, Mice showed ‘exceptional promise’.
NB: Ashtaroth is a prince of Hell in demonology.

Sharply the menacing wind sweeps over

The bending poplars, newly bare,

And the dark ribbons of the chimneys

Veer downward; flicked by whips of air,

Torn posters flutter; coldly sound

The boom of trams and the rattle of hooves,

And the clerks who hurry to the station

Look, shuddering, over the eastern roves,

Thinking, each one, ‘Here comes the winter!

Please God I keep my job this year!’

And bleakly, as the cold strikes through

Their entrails like an icy spear,

They think of rent, rates, season tickets,

Insurance, coal, the skivvy’s wages,

Boots, school-bills, and the next instalment

Upon the two twin beds from Drage’s.

For if in careless summer days

In groves of Ashtaroth we whored,

Repentant now, when winds blow cold,

We kneel before our rightful lord;

The lord of all, the money-god,

Who rules us blood and hand and brain,

Who gives the roof that stops the wind,

And, giving, takes away again;

Who spies with jealous, watchful care,

Our thoughts, our dreams, our secret ways,

Who picks our words and cuts our clothes,

And maps the pattern of our days;

Who chills our anger, curbs our hope,

And buys our lives and pays with toys,

Who claims as tribute broken faith,

Accepted insults, muted joys;

Who binds with chains the poet’s wit,

The navvy’s strength, the soldier’s pride,

And lays the sleek, estranging shield

Between the lover and his bride.
Another Midday EU/Politics Special.

Well, yesterday the Spanish parliament rolled over like a dead sheep and voted to change its Constitution to incorporate a deficit cap. It seems President Zapatero was anxious to prove Spain in not now a satrapy of Brussels. Which is a strange way of going about it. One of the minority party leaders said the the agreement between the two major parties represented "a rupture in the parliamentary process." The PSOE minority socialist government may now lose the essential support of small parties but what does it matter? It's already a dead duck administration, with Yesterday's Man at the (broken) helm. Roll on the November elections. And the ridiculous period of unrealistic promises that always precedes these.

As for the world and Europe at large, pessimism continues to grow . .

The Western world is at mounting risk of a double-dip recession after key measures of confidence collapsed in both the United States and Europe, with Germany suffering the steepest one-month fall since records began in the 1970s. . . The drop was far steeper than expected and follows grim warnings over the weekend from Christine Lagarde, new chief of the IMF, that the global crisis is entering 'a dangerous new phase'. The IMF has slashed its growth forecast for America and Europe and has called on both the US Federal Reserve and the ECB to stand ready for 'further easing of monetary policy' - implying a fresh blast of quantitative easing (QE) by the Fed.

In Europe the picture is as bad if not worse than in the USA. The eurozone is already on the cusp of recession even before austerity bites in Italy and France, and bites harder in Spain, Portugal, Greece, and Ireland. . . The ECB's president, signalled this week that rate rises are off the table but he has little scope for outright stimulus. The ECB is acutely vulnerable after the German President accused the bank of going "far beyond" its mandate and engaging in 'legally questionable' purchases of Spanish and Italian bonds.

Any suspicion that the ECB is loosening policy to nurse southern Europe through its debt crisis will trigger a political backlash in Berlin, though with Germany itself now flirting with recession as exports buckle this may help paper over EMU divisions for a while.

Hans-Olaf Henkel, former head of Germany's industry federation (BDI), wrote in the Financial Times that his support for the euro had been "the biggest professional mistake I have ever made". He described EMU as an unworkable experiment that is turning Europe's nations against each other. He called for a 'Plan C' under which Germany, The Netherlands, Austria, and Finland break away and form their own currency, leaving the South with a weaker euro and a chance to restore growth. Some Northern banks would have to be nationalised for a while to prevent losses on Southern debt causing a financial crisis.

Stephen Jen from SLJ Macro Partners said the next phases of the eurozone crisis is likely to come when the debtor states conclude that it is no longer worth putting up with the pain of EU-imposed austerity. "I think this will happen in weeks rather than months."

As for the troubled banks . .

A fresh round of capitalisation for European banks was firmly ruled out by EU officials and bankers when they appeared before an emergency meeting of the European Parliament's economic committee. The officials poured cold water on calls from Christine Lagarde, head of the IMF for "mandatory" recapitalisation to avoid another financial crisis but acknowledged that the EU economy was continuing to weaken.

The president of the European Central Bank, said there was no shortage of liquidity in the European banking system. EU economic commissioner insisted that the health of EU banks had improved over the last year.

Both urged eurozone Governments to move faster to implement the July 21 heads of agreements which makes provision for a second bail out for the weaker states.

Mr Rehn said targets set for privatising state assets in Greece might have to be revised because of the weakness of the Athens stock exchange.

Mr Rehn was gloomy about the economic outlook warning that after expanding by just 0.2pc in the second quarter the short-term indicators pointed to a "further moderation of growth." He said he was seriously concerned that the financial turbulence would spill over and harm the recovery of the "real economy."

Mr Rehn made it clear that there would be no rush to push ahead with the proposals to use euro-zone bonds, opposed by Germany and France to ease the crisis. He said they would have "unavoidable implications for fiscal sovereignty".

Tuesday, August 30, 2011

Turns out it's been the driest summer in 30 years here in Galicia. Though not, by far, the sunniest. In fact, we've had less sun than usual. But things haven't been as bad as in the UK, where it's been the coldest summer in three decades. Which is certainly saying something. Presumably they've had to have the central heating on the entire year.

Well, both Everton and Pontevedra FC started the season in the same pathetic manner - losing 1-0 to a team just promoted from a lower division. Though Pontevedra's was the worse performance, as they were playing in a league below last season's. Mind you, nothing compares to Arsenal's 2-8 thrashing by bloody Manchester United at the weekend. Good to see that their manager, Arsene Wenger, will survive the humiliation. Possibly.

I was going to going to write that Orwell a was a bit of a bugger - for writing words I don't know (see below) - but then I got onto the topic of US v. British English and found these respective definitions of the word 'bugger' on a page kindly cited by reader. And I decided not to upset any British readers . . .

BRITISH: 1. To engage in or someone who engages in anal sex. 2. A form of address for either a person or item - either jocular ("he's a generous bugger") or less so ("he's a mean bugger").

US: A term of endearment, often used for children. (In spoken English, the British "bugger" is sometimes misheard by Americans as "booger")

Thirty or forty years ago, when I saw the first cinema ads for a male cosmetic, I laughed out loud at the suggestion men would become anywhere near as obsessed with these things as women. Which helps to explain why I'm not a millionaire. Last weekend, in a rugby match of all things, there was a large ad for Dove Skincare for Men in the middle of the pitch. Orwell would surely have made more of this than I can.

I'm pleased to say that at least a couple of the forty or so resident sparrows have returned to my garden. Which reminds me . . . Looking out of my window down on to Pontevedra this rainy afternoon, I was surprised to see that rarest of modern birds - the builder's crane. We haven't seen any of these for quite a while. Which is something of a contrast with, say, five years ago, when they dominated the cityscape. And gave us the hundreds of empty flats now littering the city. And many others, no doubt.

I've mentioned a couple of times what a joy it is to have so many wi-fi cafés in Pontevedra. But sometimes they work and sometimes they don't. And so it was that last night I spent 45 minutes, of the 60 I had available, trying to find one that did. But at least in the second and third I didn't order a drink before I'd scouted the lay of the land.

My elder daughter arrives in a couple of days. I'm guessing she's not going to like the fact that I've extended a habit she deplores - sucking oxygen in through my teeth when drinking - from wine to fruit juices. Modern parents!

Finally . . Does anyone know anything about electric bikes? Are they worth the 1-3,000 euros they cost? I fancy freewheeling down the hill and powering back up it.

Here's another article on Galician wines.

Finally, finally . . . How about someone putting me out of my misery by becoming the 140th person to access my blog via Google Reader.

Finally, finally, finally . . . The waiter who said "Gracias a chi" to me is Brazilian. Whether this is an adequate explanation, I don't know.

APPENDIX 1ORWELL'S WORDS (From Keep the Aspidistras Flying)

- Mingy (Does it have the modern meaning?)
- Cit
- Chiel
- Widdershins (which appears to mean counter-clockwise and, if so, should be brought            
        back, like sennight)
- Aquarelle
- Etiolated (I really should know this one)
- Madder ('the colour of brown madder')
- Strow (?strew?)
- The groves of Ashtaroth.

More anon. Meanwhile, there's a prize for the first reader to correctly define all these. Unless it's, Alfie B. Mittington.

Monday, August 29, 2011

Sometimes things happen that confirm one in one's atheism. A family group set off at 6.30 the other morning on the Camino and, shortly thereafter, were hit by a car. Three of them died. One of these was the man who'd arranged the pilgrimage as homage to the Virgen de los Milagros (the Virgin of Miracles), whom he felt had brought him safely out of car crash twelve months previously. The driver of the car is thought to have fallen asleep at the wheel. I've previously warned people about venturing out in a car in the early Spanish hours but now I guess this advice will have to be extended to pedestrians. Incidentally, the driver won't face any charges.

All of which sort of reminds me . . .Is it just me or does anyone else find the front of the Audi Q7 to be remarkably aggressive, especially if the little lights are on? As if the driver is making the statement "I'm dumb enough to have bought this 4x4 to drive around towns in but, if it comes to a fight, I can knock your sox off."

Interesting to see this priority item on the web page of PressTV, where it passes for world news.

Here's a bit of something or nothing, as a boss of mine used to say. Lists of words that are equivalent (I think) in British and American English, showing which ones are shorter. Corrections and additions both welcome:-


Flat - Apartment
Sweets - Candies
Car - Auto(mobile)
Got - Gotten
Nappy - Diaper
Zip - Zipper
Tap - Faucet


Rubbish - Trash
Motorway - Highway
Lorry - Truck
Bonnet - Hood
Aluminium - Aluminum


Pavement - Sidewalk
Rubbish - Garbage
Motorway - Interstate
Biscuit - Cookie
Boot - Trunk

Spanish culture: More than 50% of couples who decide to live together now do so without marrying. Probably a wise move.

Which reminds me . . . My Catholic daughter and her friend went to Mass this evening. As they left, I pointed out that the age of the next youngest person in the church would probably be lower that their combined age. Which didn't raise a smile.

The law suits that are being brought against the boat companies operating between the coast and the Atlantic Isles appear to have had no effect. According to the Voz of Galicia, said companies are still taking twice as many people there as they should.

A nice new Spanish word . . . Chupóptero - 'parasite'. From the verb chupar, To suck.

Which is a nice link into a question . . . Can anyone tell me the origin of chi in this exchange. Theories even.
Gracias a chi.

Finally . . . An interesting article on political satire in the UK. 

And two articles - here and here - on Spanish white wines, by region. Including Galicia.

Yet another Mid-afternoon EU Special

Pessimism upon pessimism . . .

Comments upon Ms Lagarde's prognostications, previously reported:-

European banks face ordeal by fire this week after the IMF called for “urgent” action to shore up their defences, if necessary with state money and under legal compulsion. Europe’s lenders are already reeling from a share price collapse since the debt crisis spread to Italy and Spain, threatening to overwhelm Europe’s bail-out fund and leave banks exposed to sovereign defaults. Shares of Intesa SanPaulo, Credit Agricole and Commerzbank are all below the extremes seen during the panic in March 2009.

Europe’s inter-bank market is effectively frozen and EMU banks have lost access to America’s $7 trillion money markets. Lenders have parked €126bn (£112bn) at the European Central Bank for safety rather than risk exposure to peers.

The IMF exhorted Europe’s banks over the last two years to beef up their capital base while the rally lasted. Many failed to do so and will now face harsher terms. Some may fall under state control, wiping out shareholders.

Julian Callow from Barclays Capital said Europe is already in “industrial recession” and risks tipping into outright economic slump. “The recent slide is eerily reminiscent of the pattern during the third quarter of 2008,” he said.

Mrs Lagarde issued a thinly-veiled attack on the ECB’s rate rises and Europe’s fiscal austerity drive.

Tim Congdon from International Monetary Research said it is folly to force Europe’s banks to raise money too quickly or crystallize losses abruptly. This will cause a monetary implosion and a repeat of the 2008 disaster. He said the ECB’s restrictive policies over the last 18 months and the lack of EMU fiscal union have doomed the euro to certain break-up. “It cannot be saved. Banks will suffer large losses,” he said.

Meanwhile, things go from bad to worse in Germany:-

Angela Merkel no longer has enough coalition votes in the Bundestag to secure backing for Europe's revamped rescue machinery, threatening a constitutional crisis in Germany and a fresh eruption of the euro debt saga.

Separately, if the constitutional court rules that the €440bn rescue fund (EFSF) breaches Treaty law or undermines German fiscal sovereignty, it risks setting off an instant brushfire across monetary union.

The seething discontent in Germany over Europe's debt crisis has spread to all the key institutions of the state.

A CSU document to be released on Monday flatly rebuts the latest accord between Chancellor Merkel and French president Nicholas Sarkozy, saying plans for an "economic government for eurozone states" are unacceptable. It demands treaty changes to let EMU states go bankrupt, and to eject them from the euro altogether for serial abuses.

Mrs Merkel faces mutiny even within her own Christian Democrat (CDU) family.

The Bundestag is expected to decide late next month on the package, which empowers the EFSF to buy bonds pre-emptively and recapitalize banks. While the bill is likely to pass, the furious debate leaves no doubt that Germany will resist moves to boost the EFSF's firepower yet further. Most City banks say the fund needs €2 trillion to stop the crisis engulfing Spain and Italy.

Mrs Merkel's aides say she is facing "war on every front". The next month will decide her future, Germany's destiny, and the fate of monetary union.

Meanwhile in France . . .

President Nicolas Sarkozy has veered from one extreme to another in his quest for popularity but his latest act, as a tough election battle approaches, has astounded his critics. He has adopted the “squeeze the rich” approach of his socialist rivals. For a figure who was often referred to as “President Bling-Bling” and was attacked by the left as a friend of the jet and yacht-owning classes, it is an eye-catchingly populist volte-face that some have dismissed as a crude electoral ploy.

Just as the French leader pandered to the far right last year by expelling Roma gypsies, he played last week to the public’s appetite for “let the rich pay” solutions with a set of austerity measures targeting large companies and high earners more than the man in the street.

Sarkozy’s proposal, which must be approved by parliament next week before becoming law, calls for an extra 3% of income tax to be paid on earnings above €500,000 and would only stay in effect until the government’s books are balanced, supposedly in two years. Nevertheless, some of Sarkozy’s supporters voiced concerns that the tax might alienate his traditional support base in the upper middle class ahead of the first round of presidential voting in April.

The Sarkozy team, worried that France might lose its much-cherished AAA credit rating unless it takes concrete measures to rein in the debt, is hoping to get high marks, at least, for credibility.

Sarkozy has tried to show that he is managing things responsibly by calling for a “golden rule” limiting the budget deficit by law — Germany has one and Italy has pledged to introduce one — and his team is ridiculing socialist candidates for failing to back it.

This would all be terrific fun, if it weren't so serious.

I hope Chas Butler appreciates the use of the subjunctive here.

Sunday, August 28, 2011

Scroll down for a Midday EU Special. Which is largely composed of advice for Mrs Merkel from Gordon Brown. Would you believe.

Here in Spain, El País informs us that the steps taken to enshrine some non-defined deficit cap in the Spanish Constitution - effective ages from now - have not had any impact in the bond marketplace. Which is hardly surprising.

Another thing which experts don't think will work is the 4% reduction in the VAT on sales of new properties. A separate article in El País avers that the construction market is stone dead and can't be resuscitated by breathing oxygen into in. This measure, says the paper, is merely an electoral ploy. Ironically, as banks reduce prices on their vast holdings of new and old properties, the almost-certain effect is that other sellers will be forced to reduce their prices as well. So, thanks, Sr. Z. I never did have a high regard for you.

Spain's economic growth for this year was originally forecast by the government at well above one percent. Indeed, as an outgoing administration with nothing to lose, it's still forecasting 1.3%. But no one else is. Until the second quarter results of 0.2% growth came in, the general expectation was something in the region of 0.9%, But, assuming the economy doesn't, as some fear, fall back into recession, 0.8% is now felt to be the best achievable. The significance of this shortfall is that it'll now be harder for the government to meet its target of a budget deficit of 6.0% for this year, as well as the 3% level aimed at for 2013. These compare with 11.1% in 2009. And with something very, very small in the future Constitution.

But there is good news in Spain - the cruise ship market is booming, having grown 18% in the last year. And here in Galicia, we have the world's happiest pig.

On the issue of recession, Ms Lagarde of the IMF has used her first real public appearance to give a "remarkably gloomy assessment of the world economy". To prevent global recession and another credit crisis (which the pessimists feel has already begun), she called for "substantial and mandatory recapitalisation to bolster European banks' balance sheets." This, she says, should first be financed through private channels but could also be sourced from a Europe-wide bail-out fund. More here.

As everyone one knows, Galicia's Camino de Santiago is booming, even if a large percentage of pilgrims enjoy it for non-religious reasons. Here's a report from such pilgrim, in an article - would you believe - in the Jerusalem Post. As these things go, it's not bad but I've never seen any evidence of a wall around Santiago; the Hotel of the Reyes Católicos was originally built as a hospital (not "for the pilgrim trade"); and Galician is called Gallego/Galego, not Galega. The last few paragraphs of the article remind me the (unexpectedly positive) comment of a Jehovah' Witness friend of mine who'd witnessed(!) the same things as the writer - "Not at all how we worship God [as if I didn't know]. But what theatre! Nobody outdoes the Catholic Church when it comes to theatre."

Talking of the Camino, those fascinated to know my own experineces should click here.

Talking of our capital city . . . Interesting to read that Morocco will take part in the 9th Euro Arab Film Festival, to be held there on October 23-30. This, it's reported, is meant to "bring Arab social context and culture closer to the general public, via the international language of cinema." Let's hope so, anyway.

As I set off for Veggie Square this morning, I noticed a chap aged 65 or more sporting a strange cap, ridiculous 3/4 length trouser and white sox. Hello, I thought, an American. We must have a cruise ship group in town. Camera in hand, I searched for more. But, no. He was the only one. And here he is:-

And here's a couple of pix of the elegant Draculín, whom I mentioned a few days ago, complete with walking cane:-

Finally . . . Getting up to leave my table after lunch, I trod on a dog belonging to a woman at the next table. I apologised profusely, of course, but my thoughts ran along the lines of "What do you expect, if you have a dog not much bigger than a large rat"." And I have to confess that I got a lot less pleasure stamping on it accidentally than I would've If it'd had been deliberate. 

Only joking . . .

A Mid-afternoon EU Special

Here's an article from Gordon Brown in today's El País. I've tweaked a Google translation to make it accurate enough.

Some have said that, having kept the UK out of the eurozone, it doesn't fall to Gordon Brown to comment now on the difficulties it's struggling with. And/or that, as the creator of the UK's debt mess, he really shouldn't opine on the debt problems of others. And/or that, as an Anglo-Saxon, he should keep his mouth shut. All that said, even if all these comments are valid, it doesn't mean that what he writes is wrong . . .

I can well understand the defiance that we see today in Germany when it faces the crisis that has engulfed the eurozone. German anger is obvious and well founded.

Germany has to be part of the solution of the problem, since it has been an integral part of it

The crisis cannot be resolved without the availability of a common Eurobond

Over the past 10 years, while Spain, Ireland, Portugal and other countries enjoyed the party based on low interest rates, the Germans reduced their wages, they endured harsh structural reforms and went through the ordeal of five million unemployed in an effort to modernize its industries. Their sacrifices have led them to have a large trade surplus and an increase of 80% of its exports to China.

No other country could do this while maintaining the costs of integrating 16 million people from Eastern Europe into a unified, or joining the euro at a rate so uncompetitive, and yet be reconstructed even country's export strength.

Germany now has the strongest economy in Europe, Angela Merkel and the German people deserve to be praised for their export achievements. But if that was the only story to tell, then the remedy to the current crisis would be simple: follow the German example: austerity, and if that fails, even more austerity.

Three years ago, when the financial crisis began to hit, the German Government - like the rest of Europe - quickly defined the problem as Anglo Saxon, blaming the U.S. and UK. A year later, when the financial crisis had become a general economic crisis, the Germans retreated to an area even safer, more familiar, redefining the financial crisis but not as global as a prosecutor, as a crisis of deficit and debt .

As a result, Germany has denied any guilt in what has gone wrong. Actually, if you can argue that is not the source of the problem you may justify resisting the adoption of costly measures to solve it.

But, according to the Bank for International Settlements, Germany provided almost $1.5 trillion to Greece, Spain, Portugal, Ireland and Italy. At the beginning of the crisis, German banks had 30% of all loans to private and public sectors of these countries. Even today, this category of loans is equal to 15% of the volume of the German economy.

Add to that the deep involvement of Germany in the U.S. housing credit extravagance (half of the subprime assets were placed in Europe) and in European real estate speculation, and we ca see that wherever the parties took place, German banks provided the booze. The only party that it missed, as one commentator quipped, was the Bernie Madoff Ponzi scheme.

As a result, banks in Germany today are those with a higher debt ratio than any of the more advanced economies, up two and half times more than their U.S. bank competitors, according to the IMF.

In fact, concerned about the impact the tests might have on their credibility, German banking regulators have been hostile to going through the same testing requirements and agreed capital accounting for all other countries of teh eurozone. And one of the Landesbank-owned German regional banks publicly went so far as to remove itself the test son the eve of the results being made public.

But why should this worry a Germany which is competitive, fiscally sound and economically strong? Because throughout Europe the poor condition of the banking sector is becoming a risk to recovery and stability. German banks, like other European banks, depend on obtaining short-term funds, and in the next three years, these weak and poorly capitalized and profitable banks have to raise 400,000 million euros in the markets, an amount which is about one third of all debt in the euro area, estimated at 1.4 billion euros.

A few days ago it fell to France - qualified, such as Germany, with an AAA credit rating - to face market pressure, due to its high exposure to the periphery of the euro. Each country has its own problems, but as the crisis moves into the core of Europe, Germany could also find that his once undisputed image becomes a questionable financial bastion.

In the short run Germany would do well to support bank recapitalization at the European level, something that she will benefit from. But the time has come to recognize that Germany must be an integral part in solving the problem, since it has been an integral part of the problem itself.

Of course no one should expect Berlin to transfer a large percentage of German wealth to the poorest countries in the European Union on the same scale as in other federal states, such as the United States, Australia and others, but she must be persuaded that the crisis cannot be resolved without the availability of a Eurobond common legislation in favour of greater fiscal and monetary coordination, and a European Central Bank's role to take itself one step further than being the guardian of low inflation, assuming a second role as lender of last resort.

In the end, Germany will have to agree on a common mechanism for Europe to pay their way out of crisis. Her recent inability to act from a position of power threatens not only the country itself but the whole euro project, which Germany has spent decades developing.

Here in Spain, opposition appears to be growing to the process of inserting a EU inspired/mandated cap on the national deficit in the Constitution. But, even so, it's hard not to see the two leading parties jointly pushing it through.

Saturday, August 27, 2011

Cosillas de España

- The average Spanish pension rose by 3.5% over the year to August, to the level of 918 euros a month. To give possibly specious credence, the relevant ministry quoted this as 917.53. Anyway, the regions which scored higher than this included the usual suspects of Madrid and the Basque Country but also next-door ("poor") Asturias. Galicia turned out to have the lowest pension, at only 676(675.75) euros.

- Hard on the heels of the reduction in the value-added tax on new house purchases, the government has announced it's suspending plans to re-introduce the "wealth tax" on assets, abolished in 2008. I assume they know their elbow from their arse.

Cousiñas de Galicia

- The Xunta has said it won't, after all, be denying funds to those municipalities which don't get their accounts audited. Seems this was "just a warning".

- Galicia has the 3rd lowest birth rate in Spain. Taken with increased emigration, this will mean a population that continues to fall.

- The Galician Nationalist Party (the BNG) has said it supports abolition of the provincial layer of government. As they don't control any, I guess this was an easy decision.

- Unemployment in our major commercial city of Vigo is now said to be as high as 30%. Though no doubt very much higher for 'young' people of 18-35.

- The Galician economy is performing even less well than the national economy. Particularly noteworthy was a reduction of 1.7% in consumer spending in Q2.

- Needless to say La Crisis continues to point up the asininity of the 'coffee-for-all' strategy of developing all three of Galicia's small international airports over the last decade - a policy which was stupid enough during during the good times and which has redounded mainly to the benefit of Oporto's huge new facility in Northern Portugal. Things won't get better in January, from when Iberia will be operating fewer flights - in smaller planes.


- In this well-off city, beggars are a plague. I wonder if this is the case elsewhere in Spain (the 12th. largest economy in the world). Or indeed in other developed countries.

- Next weekend (3-4 Sept.) we have the Feira Franca - or Medieval Fair. Readers with excellent memories will recall that, some years ago, my younger daughter looked at the horse dung in the main square and marvelled that they went to the lengths of putting it this down to simulate authenticity. Whereupon I pointed to the horses standing in the corner of the main square. How we laughed.

- The panhandler who plays the pipes while his girlfriend twirls streamers clearly knows only one tune. By the end of a working day (about 3 hours for them), she must be ready to kill him. I certainly am, after only five minutes.

Finally . . . Here's a headline from the web page of the Iranian Press TV:-

UK Unrest is a pretext for a police state.

Or rather, as it really was:-

UK unrests a pretext for ploice state.

Followed up by:-

The British government has been cranking up its pressure on low and middle-income households ever since the unprecedented unrest afflicted the country.

This is the stuff of Private Eye. Perhaps they're trying to compete.