Sunday, September 25, 2016

Pontevedra Pensées: 25.9.16


Francoist Fascism: You might have thought this would be dead by now. Or that no one would admit to being an admirer of it. If so you'd be very wrong. As this article shows. As does the appalling monument and vast Nazi-like basilica in the Valley of the Fallen, where Franco's bones lie. Nowt as queer as folk, as they say.

Corruption: HT to Lenox of Business Over Tapas for this article on the tale of the AVE high-speed train down south.

Spain's Constitutional Fabric: This – never very soundly stitched together – is stressing and straining and may well come apart at some of the seams. Essentially, corruption and extravagances are easier to live with when times are good than when times are as bad as they now are at the micro level in Spain. For one thing, people who pay for other people's extravagances (think Cataluña and Andalucia) find it hard to stomach this situation when they're having their pips squeezed until they squeak. It's enough to make anyone a nationalist. Anyway, as the Spanish state struggles to get a government in place, Cataluña is spending €9m on preparing Catalan passports for when the region/nation secedes 'next year'. Mark my words, it will end in tears.


Here in Galicia, we're facing regional elections next week. One party which has emerged over the last couple of years is En Marea. Asking my Galician friends about this at dinner on Friday night, I discovered this was an amalgamation of Podemos, Izquierda Unida and 6 or 7 other leftish parties. Needless to say, they're falling out with each other and schism appears to be imminent. An age-old story of the Left. Meawnhile, the expectation is that the right-wing PP party will be returned to power, with an absolute majority.


Imminent Death???: As I've been predicting its collapse under the weight of its internal incongruities for more than 20 years, I was interested in this article. Though not in any self-justificatory way, I stress. It's all rather sad, if inevitable. See also the article at the end of this post.

Immigration: Hard to say the EU's strategy has been successful so far, I guess. But maybe there's time to get it right. If not the political will.


Russian Propaganda: It's hard not to be shocked by this, even after months of watching RT TV.


John Brierley: I spent a very enjoyable few hours with this chap yesterday, the writer of excellent guides on the Camino. He was passing through Pontevedra in preparation for the next edition of his guides to the Portuguese and Espiritual caminos. He was duly horrified by our ugly new museum-cum-art  gallery. But impressed by a bottle of godello white wine we shared over zamburiñas al ajillo. I was pleased to find we shared a disdain for percebes, or goose barnacles. Inter alia.


Movemento Up!: Here's the brochure for an event taking place at the moment in front of our town hall. It's in gallego - naturally - but its text contains at least 20 English words in addition to the obvious one of UP. Including stands and speed-dating. The latter seems to be something to do with companies meeting each other in this case.


More examples of Finnish/British nightmares:-


Juncker is fiddling while EU economy burns.  The Times.

Saint-Georges-de-Mons is one of those French towns you barely notice on your way to the more scenic parts of the Auvergne. There is a small church, a few bars, an unappetising restaurant and a brutalist town hall.

The only interesting thing about it is a nearby building site — not because of what is being built there (a factory to recycle aviation-grade titanium) but because of who is paying for it. For the EcoTitanium plant is one of the only visible signs of the project which was supposed to save Europe.

Last year, shortly after taking charge of the European Commission, Jean-Claude Juncker trumpeted an unprecedented £268 billion investment programme to kick-start the EU economy. The Juncker plan made all the right noises: Europe needs more investment in infrastructure, more shared spending and more economic growth. But as with all infrastructure splurges (Philip Hammond take note) those big promises have proved difficult to deliver.

The whole point was to go beyond Europe’s existing infrastructure plans but the vast majority of the projects are small schemes that qualified mainly because they were too boring to feature in European finance ministers’ own budget speeches. So there are obscure road widening projects near Stuttgart, home insulation schemes in France and a proposal to roll out smart electricity meters in the UK.
Indeed, according to the Bruegel think tank, of the 55 projects approved by the EC, only EcoTitanium would have struggled to get funding from existing investors such as the European Investment Bank. 

In other words, the great legacy of the Juncker plan might be a factory you’ve never heard of doing a job you’ve never heard of in a town you’ve never heard of.

Still, while other cultures would see this as evidence of failure, that’s not the European way. So today, Mr Juncker will propose an extension of his scheme at the EU summit in Bratislava. It is worth dwelling on this for a moment, because the failings of the Juncker plan are a useful shorthand for the deeper economic malaise affecting Europe.

After all, on the surface, things seemed to have improved across the Channel. For a brief period before the Brexit vote, growth in the euro area exceeded that of the UK. Most economists were forecasting decent growth this year and next, thanks to the European Central Bank’s quantitative easing programme, and to the fact that Germany has pledged to spend a bit more on investment. Berlin even hinted that it might help Greece by writing off some of its debt.

But a closer look reveals the cracks. For one thing, economic growth has started to peter out. Economists now expect the euro area to grow at a slower rate than the UK this year. The same is true of the Continent’s supposed engine room, Germany, where recent surveys of industrial activity suggest the economy is flatlining.

One explanation is that for all his promises — to the IMF, to the G7 and to every other international body — that he would spend more on investment, the German finance minister Wolfgang Schäuble has reverted to type. His obsession has always been what Germans call the “schwarze null” — getting a big “black zero” on the fiscal balance sheet. Mr Schäuble has actually gone further, posting a comfortable surplus in the first half of the year.

While a fiscal surplus would be good news for most countries, for Germany it is damaging. Weak government spending means weaker growth, not just at home but throughout the eurozone, which depends on its leading economy to lift everyone else. It also prevents the kind of rebalancing needed to allow Greece and its fellow Mediterranean economies to survive within the single currency.
Economists now expect the euro area to grow at a slower rate than the UK this year.

Already there are some worrying echoes of the euro crisis: the ECB’s so-called Target2 accounts which measure how reliant the troubled southern economies are on the north show imbalances are rising again, in Italy’s case to the highest level on record. Inflation is still barely in positive territory. Investment spending across the continent is now actually lower than when the Juncker plan was launched. In short, Europe is deeply vulnerable.

Most worryingly, this time around, Mario Draghi, the central bank president who in 2012 promised to do “whatever it takes” to safeguard the euro, seems to be running out of ammunition. The ECB’s massive programme of quantitative easing is struggling to find new eligible bonds to buy. The question of whether it will continue beyond next March was not even discussed at the bank’s policy meeting last week.

All this before one considers the two main issues under discussion at today’s summit: Brexit and the refugee crisis. Leaders arriving in Bratislava have been given a dossier by the commission showing that immigration and terrorism are now the biggest concern for EU citizens.

The optimistic take is that these two crises finally force the leaders to resolve their problems, to create a true monetary and fiscal union for the euro and an arm’s-length outer doughnut with migration controls that even tempt Britain. Moreover, while he seems deaf to economic reason and the struggling economies of the Mediterranean, the German elections next year may at last force Mr Schäuble to loosen his purse strings.

Then again, Europe’s history of doing the wrong thing and then doing it all over again suggests the road ahead might be even bumpier.


Alfred B. Mittington said...

The elections are next week???

The regional elections are today, you oaf!


Colin Davies said...

I wrote the comment yesterday. And,as usual,who cares but you?

Colin Davies said...

And you don't even have a vote, you anally-retentive old buffoon. Why do you care? Are you really so bored?