Wednesday, December 30, 2015

Sp. Politics; The EU; English Pinglish; Galician Nationalism; & Funny Stories

SPANISH POLITICS: The electorate here is said to have abandoned its fatalistic/feudalistic attitude to corruption and to have recently punished both of the leading parties because of their fondness for it. Strange, then, that the Presidenta of Spain's most corrupt region – Andalucia – is looking to oust the PSOE President in her own favour. It surely makes sense to her; but to the rest of us? I mean, previous Andalucian presidents and current members of her administration are being investigated in respect of a €2-3bn (yes, billion) diversion of EU funds. You'd have thought there was at least a possibility that she'd be a persona non grata to the public. Perhaps she is but can't see it. Time will tell, as ever.

THE EU: To counter recent posts on the imminent death of this monster, there are 2 articles at the end of this blog on why it must survive and why the UK should not leave it. If you're interested, make up your own mind. If not, skip 'em.

ENGLISH PINGLISH: Whatever this is, it's being used to help young kids learn the world's lingua franca. So it must be good. A series of books in both English and Spanish can be bought on a couple of deuvedés.

GALICIAN NATIONALISM: I'm not clear what happened as regards support for this in the recent general elections. The old Galician Nationalist Block (the BNG) had been superseded (I think) by a party called Nos ('Us' in Gallego) and this did very badly indeed. But another new party of the left – En Marea – did rather better and this may well contain nationalist elements. Perhaps a reader could enlighten me. Meanwhile, a spokesperson has said “We have to re-invent nationalism so that it appeals to young people”. Well, good luck with that, mate. The times are rather against you. This ain't The Basque Country. Or even Cataluña. Most people recognise that Galicia would be in a worse state but for Spanish money.

CELTS: Galicians – especially the nationalists – like to see themselves as Celts. And not merely any old Celts but those who settled Ireland. The latest genetic research in the latter suggests that their Celts came from the Middle East (Greek: Keltoi?) But many believe the term is meaningless, having been invented only in the 12th century, and that it's a cultural, not an ethnic, label. But none of this will stop many Galicians believing they're Celtic and, therefore, different from every other group in Spain. Especially from those with 15% North African genes. Being distinct from every other region's populace is important in Spain.

The EU empire’s a mess but we must stick by it 

Despite its inherent lack of democracy and its structural weaknesses, this enormous ship cannot be allowed to capsize

Edward Lucas: The Times

Imperial Europe is taking shape before our eyes. The process is messy and costly. It prizes effectiveness over democracy and national sovereignty. It may end in catastrophe. But our best bet is its success.

The most long-standing bulwark of the empire is the competition directorate — a formidable bureaucratic weapon with prosecutorial powers, charged with maintaining the integrity of the single market. Without it, monopolies and government subsidies would disadvantage consumers.

The fines it can levy have humbled the world’s most powerful companies, including Microsoft, Gazprom and Google. Its scalps also include the European Union’s most important member states.

Close behind it is the energy directorate, which has destroyed Russia’s abusive and discriminatory gas export business, to the dismay of Kremlin cronies, especially in Germany, and to the huge benefit of those once in its grip. The EU’s single market is now bigger than the EU itself — it includes Iceland, Norway and Switzerland. As a country — call it Singlemarketland — it would be the biggest, richest and most powerful economic entity in the world. On trade policy, it can do deals with behemoths like China and America with a clout that no individual member could match.

Next up is the eurozone. Constructed on the basis of wishful thinking, it is now turning into a country — Euroland — with an interventionist central bank, a bailout fund, enforceable fiscal rules (just ask the Greeks) and common banking supervision. None of these institutions were envisaged at the beginning (and had they been, voters might well have vetoed the whole idea).

It could still blow up, but it is now possible to see how the common currency can work. For the foreseeable future, Germany and other exporters in northern Europe will benefit from an artificially low exchange rate. In return, they pay up while the south Europeans try to reform their economies to regain competitiveness. It is the same deal we have in Britain, where the southeast pays for, and runs, the rest of the country.

But the difficulties of making Euroland work are dwarfed by the latest project: turning the Schengen passport-free travel zone into Schengenland. This incipient superstate is bigger, with 26 countries, against only 19 in Euroland. Hassle-free travel is one of the breakthrough benefits of the past 20 years, something that ordinary Europeans truly value. It is now under threat because of terrorism and fears about uncontrolled migration: once across the Schengen border, you can travel freely, in theory, from the southern tip of Italy to the north of Norway, in search of a better life or aiming to end other people’s.

The Schengen zone was not designed to deal with this. This is why Schengenland just got its own army, the new EU border force, which can be deployed to protect the external Schengenland frontier, even if a member country does not wish it

Moreover, history suggests that empires that do not stabilise their periphery are themselves destabilised by it. Accordingly, Schengenland aims not just to secure its border but to manage what happens beyond it. Schengenland is developing its own foreign policy — doing deals with Turkey with a realpolitische vim that would make Bismarck blush: you keep the migrants out, we give your citizens visa-free travel to the EU. Expect more of that in 2016.

Schengenland is also getting its own police force: in effect a European FBI. Countries with effective criminal-justice systems, such as the Netherlands, France and Germany, are not going to put up with the lapses of ineffective ones (notably Belgium). The imperial police force involves data-sharing, hot pursuit across national frontiers, speedier extradition and close collaboration between prosecutors.

Problems abound. Schengenland wants to share out migrants so that the generous countries (chiefly Germany and Sweden) do not bear disproportionate short-term costs. But countries such as Poland, with fragile public services and sceptical populations, have scant appetite for taking large numbers of migrants from the Middle East (they have already done their bit by taking hundreds of thousands of Ukrainians, they note). Schengenland will have to sort that out, trading access to EU structural funds (boondoggle projects for roads, railways and the like) in exchange for help on migration.

One question is how these proto-empires fit together. What say do the minority “outs” have in decision-making by the “ins”? How to stay in the EU but outside Schengen and the euro is the real dilemma facing David Cameron, not the politics of his phoney referendum.

A bigger problem is democracy. National preferences shape imperial Europe, but they do not govern it. If you want a single market in goods, people and capital, you need to stop national governments favouring their own voters and breaking the rules with protectionism. If you want a common currency, then the citizens of Greece cannot vote themselves a slice of German taxpayers’ money. If you want a passport-free travel zone, then you need effective policing inside it and strong projection of power on its periphery. Those considerations trump democracy.

Admittedly, the EU is democratic in that the European parliament scrutinises the commission, which is appointed by haggling among national governments. But this is obscure and distant compared with national general elections. The advantages of the single market, common currency and passport-free travel are not perks for the elite: they benefit the humblest, too. Millions already commute across the Schengenland internal borders. Europeans will not lightly abandon their accustomed convenience. But it will require a big shift for the public to accept that they are part of imperial Europe and to forswear the national sovereignty they have grown up with.

The biggest weakness is that building imperial institutions belatedly in response to crises is so costly and risky — rather like refitting a ship once it is already on the high seas. The architects of these great schemes have been strangely quiet about the shortcomings of their original plans. The costs and constraints are far higher than originally advertised. Voters — be they the British toying with Brexit, exasperated Portuguese and Greeks installing fragile left-wing governments, or the French turning to Marine Le Pen’s National Front — can stall, or even capsize, imperial Europe. The consequences of such a shipwreck would make today’s problems seem trivial.

Leaving the EU would be a disaster for Britain. Business needs to speak up.

Sir Victor Blank - a former chairman of Lloyds Banking Group and Trinity Mirror

There is a great danger in the argument being subsumed by pure emotion, with the Brexit camp playing the “historically proud, independent nation” card. This would be a repeat of the Scottish Referendum battle, where the Nationalists tugged at heartstrings – a blatant stirring of passion that the Union side struggled to counter. In the end, cold reason prevailed. The business community, cautious at first and reluctant to be drawn into the political arena, made its voice heard, presenting a compelling case against Scotland going it alone.

This time business must not wait – the EU decision is too economically significant to leave until the last minute. Put simply, it would be a disaster if the UK quit. Avoiding that should not, and cannot, be left to chance.

Business must speak out because business matters. Politicians may declare their views, so too might the press and other commentators. But it’s business, whether large companies or small to medium enterprises (SMEs), that creates the jobs and generates the wealth upon which this nation so depends. There are currently around 5 million private enterprises in the UK, employing, at 25.6 million people, roughly half the population. Public service, by contrast, employs 5.4 million.

That is why business must not stay silent or be ignored. Industry leaders speak for a far bigger constituency than any politician, journalist or commentator. It is all the more important to speak up, as this referendum’s result will be final – we will not be able to reverse it, or hold another a few years hence. This is one shot, an opportunity to settle an issue that has dogged Britain for decades.

What, precisely, is the message business chiefs must convey? They must assess the contribution that their company can make to our economic well-being and wealth. That means assessing the prospects for jobs and benefits. According to the International Monetary Fund, the UK ranks fifth among world economies (behind the US, China, Japan and Germany). Withdrawing from the EU would threaten that hard-won economic power. I am not saying it will be weakened, but it could well be. Why take the risk?

As a member of the EU, our companies are able to sell, without barriers and tariffs, to a market on the UK’s doorstep of 500 million people. They need only abide by one set of regulations covering the entire, vast and complex region. Our biggest trading partner is the EU. As a non-member these same companies could be obliged to negotiate with each individual country they sell to within the EU. One set of rules would be replaced by a possible 27, not to mention payment of duties.

The ability of manufacturing companies to sell their wares could be damaged. Manufacturing accounts for 54 per cent of UK exports and directly employs 2.6 million people. Another crucial area, financial services, may also be blighted. This is a sector that contributes £127 billion to the UK economy. Around half of that total derives from the City of London. Financial services accounts for 3.4 per cent of UK jobs. Some banks have indicated already they would be required to consider relocating to a centre in the EU and downgrading London. Again, why endanger the City’s world-leading position?

Indeed, would the USA treat the UK in the way it does today if we say no to the EU? Would the Japanese and the Far East continue to invest billions here, if we are no longer inside the market of 500 million people?

Not only does the EU buy our exports, its companies invest here and create jobs. According to the latest available figures, 46 per cent of all foreign investment in Britain hails from EU countries. We’re the Number 1 destination for foreign direct investment in the EU.
"While Britain’s is the fifth biggest national economy on earth there is one that towers over all of them. It’s the collection of national economies that is the EU itself"

Overseas money pouring into Britain is a lifeline for our economy. On our own, we’re nowhere near big enough to build the factories and offices that are funded by foreign cash. Some of that inward investment comes from the EU itself, supplying funding to the regions of greatest need. Over the next six years, Cornwall, Wales, Scottish Highlands, Northern Ireland and Northern England can look forward to receiving £8 billion in EU aid. That would vanish if we voted to depart.

EU funding also goes to universities to help them research future technologies. Britain is earmarked to collect £7 billion from the EU’s Horizon 2020 fund – investment that would also cease. Our SMEs actually receive more funding from the EU for hi-tech research than those of any other EU member. That lucrative tap would be turned off if we went alone.

While Britain’s is the fifth biggest national economy on earth there is one that towers over all of them. It’s the collection of national economies that is the EU itself. That firepower enables the negotiation of valuable free trade deals for its members. The EU has entered into agreements with the US, China, India, South Korea, South Africa and Mexico. Britain on its own would not have the clout to drive a similar bargain; British companies would

The EU continues to push for new agreements. The Transatlantic Trade and Investment Partnership (TTIP) talks between the US and EU are on going. TTIP alone could be worth as much as £10 billion a year to the UK economy. Similarly, a proposed EU-Japan tie-up could be worth £13 billion to the UK.

If we left, we would still have to face the same issues that we must contend with today – except we could no longer turn to the EU for support. Immigration would still continue to haunt us. But suddenly we might find the French less willing to cooperate, and simply waving immigrants on their way towards Britain instead.

Of course, some aspects of Brussels drive us mad. Hopefully these can be reformed by the Prime Minister in his talks with EU premiers. But we should not lose sight of the bigger picture. Britain has prospered hugely since joining the EU. Compared with the uncertainty of leaving, this fact alone is compelling enough reason for staying. Business leaders must get on the front foot, assess the benefits of membership and communicate them firmly. To do so is to fight for Britain’s economic future.

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