Saturday, September 30, 2017

Thoughts from Galicia: 30.9.17

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.

Life in Spain
Cataluña 1: D Day nears . . . Both the Catalan and Spanish governments spout about free speech and democracy. Yet both of them are ruthlessly controlling their respective medias in their own political interests. Some democracy. See here on this.
Cataluña 2: Needless to say, although the EU has refrained from saying much, the UN Commission on Human Rights has weighed in to say that Spain mustn't trample on the Catalans' right to free speech. As is this is ever absolute!
Cataluña 3: Here's The Local (again!) on how Madrid could – and should – have engaged in more dialogue with the Catalans, most of whom don't (Query: didn't?) support secession.
Cataluña 4: The best outcome – but not necessarily the most likely – is that things will calm down and a more sensible Madrid will allow the Catalans to have, like the Scots, a legal referendum. But not very soon, as Madrid has surely assured that more Catalans would vote for secession now than they would have done 6 months ago. Or even 6 weeks ago. Maybe in 3 years. Possibly 5.
Cataluña 5: Here's the always estimable Simon Jenkins of The Guardian on the wider issue of secession. As he rightly says: Secession is a concept riddled with double standards. The only sensible conclusion is to acknowledge the right of territorial groups to some form of self-rule. That is why the issue is not secession as such, but the state centralism that is usually its cause. The conflict between Madrid and the Basques led eventually to compromise and “autonomy-lite”. This must surely be the sensible outcome of the Catalan dispute. How superior power treats inferior rights has lain at the root of politics since the dawn of time. Devolution is not an option but a necessity. [En passant . . .As someone has said, the (super)state centralism of the EU is a major factor behind Britain's 'secession' via the Brexit.]
The Basque Country: Needless to say:- Thanks to Madrid's clumsy approach to the Catalan challenge, the leading Basque party - the PNV – has withdrawn its support of the PP party's proposed budget for 2018, leaving the Government in a minority. It will be interesting to see what this means in practice. And the impact on Spain's credit rating, etc.


  1. Spanish: My friends at dinner last night confirmed that the phrase tener feeling has entered the language. But they stressed it means 'to get on well together' and can apply to heteros between themselves. So, 2 men or women can agree that tenemos feeling. Always in the singular, I'm told.
  2. English: Sologamy. Marrying yourself. See here. In the US, a website called I Married Me offers self-wedding kits. You couldn't make it up.
Galicia: I think I've mentioned there's been a gigantic increase in Camino Portugués 'pilgrims' in the last 10 years, from fewer than 7,000 in 2006 to 56,000 last year. And that 120,000 are expected in the 2021 'Holy Year'. Driving to Santiago this week on the 'old road' (the N-550), I saw clear evidence of this, in the form of more than 100 walkers at those few points where the camino goes alongside the highway for a short while. The tip of the iceberg, then. When I first did this camino in 2009, we saw fewer than 20 fellow 'pilgrims' all week. Incidentally, a few of the walkers seemed to have missed the yellow arrows taking them back on to rural tracks, or to have decided to take the (normally) shorter route alongside the main road. I didn't bother to say anything, as I've walked the camino 'backwards' and it gets annoying to be constantly told you're going the wrong way.

Talkwater seems to be a better option these days than Google Alerts. It's given me this blog on Galicia, for example. About being foreign here. Of course, the word foreign here in Galicia means anyone not from the region, including 42 million Spaniards . . .

Finally . . . My elder daughter has sent me this diagram of wine flavours. It'll surely come in handy when reading any fulsome – and otherwise unintelligible – description of a particular bottle:-

Friday, September 29, 2017

Thoughts from Galicia: 29.9.17

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.

Life in Spain

  • Cataluña: Ambrose Evans-Pritchard sees the utter mess there as being an existential threat to the EU. See the first article below this post for his rationale. Which seems accurate to me. As you can see, like everyone except the idiots on the PP party's right wing, AEP thinks the Spanish president, Mariano Rajoy, has made a complete pig's ear of the challenge. To everyone's cost. An interesting weekend ahead.
  • This is an excellent review of the Spanish economy, in video form. It emphasises the macro/micro divide I bang on about regularly.
  • I mentioned yesterday the (individualistic) Spanish attitude to rules. Basically: If a rule inconveniences me, it doesn't exist. Later that morning, I was walking along the riverside path toward Pontevedra's old quarter when I was confronted by a mother and her young son on their bikes, she on the parallel cycle path but he beside her on the pedestrian path. Even when I gestured (politely) that he move onto the cyle path, he didn't. Just looked at me, bewildered. His mother said nothing. Spaniards learn early to ignore people to whom they have no duty of care/consideration. Basically, everyone they don't know . . .  In Germany and Holland, by the way, you will be mown down, if you're dumb enough to walk on a cycle path. Here, no one cares. A different universe.
  • For Spanish speakers, here's an article from El País about Spaniards in the UK who back Brexit. And here's the English version I've just noticed . . . 

Talking of the EU . . .  For those readers who don't understand my aversion to it, I offer the 2nd and 3rd articles below. The first of these is as close to an encapsulation of my views as you're likely to get. It's the vision of the future thing, as some US president might have said. Sweet FA to do with backward-looking hankering for a restored empire, or with racism - the rather pathetic calumnies of those - in the UK and elsewhere - who oppose Brexit. Of course, the Catalan situation addressed by AEP in the first article does nothing to undermine my belief that the EU is an over-ambitious dream of out-of-tune technocrats which is doomed to failure. And that it is already dying under the weight of its internal incongruities. But that's just my view. Everyone is free to differ. Time will tell . . .

Here in GaliciaLa Crisis has led to a pile of 'regularisations' - measures aimed at ensuring that rules are followed and tax revenues maximised. We've had the municipalities using drones to check on property improvements and now there are inspectors in the fields checking on who's involved in the wine harvesting, and how. The peasants are almost revolting against this campaign to ensure the payment of income and social security taxes.

Finally . . . After they were fined almost a million euros, the ferry operators found guilty of taking too many people to the Atlantic Islands off our coast are complaining that they're being 'criminalised'.   It seems they need course 101 in the operation of the law.

Today's cartoon:

The Times' view of Jeremy Corbyn's reception at the Labour party annual conference in Brighton. It's a play on a famous poster of the 1930s:-


Spain threatens to break up the euro unless Catalonia comes to heel:   Ambrose Evans-Pritchard

While the EU watches in disbelief, a remote threat has mushroomed suddenly into an existential crisis. It is even more intractable than Brexit, and certainly more dangerous.

The volcanic events unfolding by the day in Catalonia threaten the EU project within its core. They pose a direct threat to the integrity of monetary union.

Former French premier Manuel Valls – son of a celebrated Catalan painter – warns that if this weekend’s banned vote on independence goes ahead and leads to Catalan secession, it will be “the end of Europe” as a meaningful mission.    

Those old enough to remember the Spanish Civil War can only shudder at TV footage of crowds across Spain cheering units of Guardia Civil as they leave for Catalonia, egged on with chants of “go get them”.
As matters stand, 14 senior Catalan officials have been arrested. There have been dawn raids on the Catalan Generalitat, including the presidency, the economics ministry, and foreign affairs office.

Officials preparing for the vote have been interrogated. The Guardia Civil has been deployed to seize ballots sheets and to prevent the referendum from taking place, if necessary by coercive means.

The Catalan security forces – Mossos d’Esquadra – have told the Spanish authorities that they will not carry out orders to shut down voting sites if this leads to civil disorder. Their higher duty is to Catalan cohesion, or "convivència ciutadana". It is defiance, a little like the British Army’s Curragh Mutiny in March 1914.

The government of Mariano Rajoy insists that the Guardia Civil is being sent to preserve the constitutional order and inviolable integrity of Spain.

Catalonia’s leaders call it fatally-misguided repression that risks spinning out of control. “We will never forget what has happened. We will never forget this aggression, this prohibition of opinion,” said Carles Puigdemont, the Catalan leader. The contrast with the Scottish referendum in 2014 is self-evident.

Markets have yet react to this showdown even though the Spanish finance minister, Luis de Guindos, has openly warned that Catalonia will suffer a “brutal pauperisation” if it presses ahead. He said the region would suffer a collapse in GDP of 25pc to 30pc, a doubling of unemployment, and a devaluation of up to 50pc once it had been thrown out of the euro.

This is a threat, not a prediction. Such a collapse would occur only if Spain chooses to bring it about by making life hell for the Catalan state: by closing its economic borders, by using its veto in Brussels to ensure that Catalonia cannot rejoin the EU or remain in monetary union, and by blocking Catalan accession to global bodies such as the International Monetary Fund.    

The problem for Spain is that if it acted in such a fashion, it would bring a commensurate catastrophe upon itself. Catalonia is the richest and most dynamic region of Spain – along with the Basque country – and makes up a fifth of the economy.

Such circumstances would entail a partial break-up of the euro, re-opening that Pandora’s Box. The status of Spain’s sovereign debt would be unclear. Why would the Catalans uphold their share of these liabilities if subjected to a boycott?

Markets would have to presume that the debts of the rump kingdom would no longer be 99% of GDP but more like 120%. This burden would be borne by a poorer society and one that would necessarily be in an economic slump itself.

The Bank Of Spain played down the crisis on Thursday, saying only that Spanish borrowing costs would rise if tensions worsened. “It would initially affect the sovereign risk rating, and afterwards spread through other interest rates,” it said. So far the silence from the rating agencies has been deafening.

It is not for foreigners to take sides in a historical dispute of such emotion, drenched in mythology, with the wounds of Franquismo and Las Jornadas de Mayo raw to this day. Catalan nationalists date the original sin to 1714 when Philip V abolished their institutions and imposed Castilian laws – and absolutism – by right of conquest.

What seems clear is that Mr Rajoy and his Partido Popular have  provoked a Catalan backlash by blocking enhanced devolution that had already been agreed with the outgoing Socialist government. What the Catalans want is a settlement on the Basque model with their own budget and tax-raising powers.

Mr Rajoy then exploited the eurozone banking crisis to try to break the power of the regions, forcing Catalonia to request a €5bn (£4.4bn) rescue even though it is a net contributor to the Spanish state. He has since hid behind mechanical legalism.

You might equally blame the Catalan nationalists for charging ahead with a referendum barred by the constitutional court, creating a mood of division between ‘Remainers’ and ‘Leavers’. Yet they were sorely provoked. Mr Rajoy’s heavy-handed response has since been so inept that he may have created a majority for independence where none existed before.  

The problem for the EU is that it is a prisoner to legal rigidities. Commission chief Jean-Claude Juncker has had to back Mr Rajoy and the Spanish constitutional order because that is how the EU system works. This has made Brussels a party to alleged abuses in Catalan eyes.

Barcelona’s mayor Ada Colau – who opposes secession – has called on the EU to “defend the fundamental rights of Catalan citizens against a wave of repression from the Spanish state". 
Europe cannot allow itself to adopt a passive position over the Catalan question, seeing that the events going on in Barcelona are affecting Paris, Madrid, Brussels, and Berlin alike,” she wrote in the Guardian.

We will find out on Sunday whether or not the Catalan people turn out to queue defiantly at locked polling stations, manned by the Guardia Civil. A declaration of unilateral independence is not yet “on the table”, said Mr Puigdemont. Not yet.

The EU is in a horrible bind. It faces a rule of law crisis in Hungary and Poland. It faces an East European revolt over migrant quotas. Its relations with Turkey have turned hostile. Now Spain is threatening to break up the euro unless the Catalans come to heel.

Brexit is surely the least of their problems, and one that can be solved so easily with an ounce of common sense.


Emmanuel Macron’s ‘inspirational’ EU dream is actually an authoritarian nightmare: Allistair Heath

One of the great pathologies of British politics, at least since the Fifties, has been our strange refusal to understand European integration. We keep telling ourselves that the EU is a transactional relationship, a “trade block”, a means of boosting our mutual GDP, of making it easier for British banks and German carmakers to do business. The entire post-Brexit referendum debate in Britain has continued to be conducted along such absurd lines.

Whenever bemused Europeans tell us that we are missing the point, that EU integration is a historic project to build a new civilisation, we cannot compute. We laugh nervously, stick our fingers in our ears, and go back to arguing about how the EU should focus on trying to semi-liberalise the market for purple widgets.

French énarques, who pride themselves on Cartesian rigour, have a theory for why Britain is unable to face facts. They believe that, as befits a conservative nation obsessed with evolutionary change, that hasn’t undergone a proper revolution since 1688, we are overly practical.

We are accountants and shopkeepers who cannot comprehend grand theories or abstract concepts: in effect, Brexit was a rejection of a philosophy we never understood. The French specialise in the general; we focus on the particular, and neither side understands the other.

That is why anybody who cares about politics should read Emmanuel Macron’s speech on the future of Europe. His agenda is striking: he wants more new bureaucracies, a centralisation of the setting of taxes, an EU-wide minimum wage, European military integration and much else.

If you follow European politics, you will know that its aims are mainstream among the continental establishment. But if you still believe the EU to be little more than a clever vehicle to facilitate tourism or cut the price of phone calls, you may be jolted out of your complacency.

This is about politics and nation-building, not commerce; economics only matters when it is weaponised to promote political integration, as with the euro. You may even come to understand that Theresa May was right to say in Florence that “the United Kingdom has never totally felt at home being in the European Union”.

On top of the European military intervention force, Macron wants a substantially greater European budget, and a drive towards tax harmonisation, starting with corporation tax, the treatment of tech firms, carbon levies and national insurance.

Macron has been forced temporarily to tone down his support for a Eurozone finance minister and debt mutualisation as a result of Angela Merkel’s humiliation in Germany; but these ideas still lurk in the background. Macron also wants a European public prosecutor, an asylum office, a border police and a more integrated immigration policy.

The purpose is to build a new country called Europe, with a common history and cultural references. For this to work, old identities need to be downplayed and eventually turned into historical curiosities. Hence the creation of new European universities, the promotion of apprenticeships in other countries and the adoption of pan-European lists and parties at European elections.

It is usual to contrast Macron’s vision with that of Jean-Claude Juncker, also outlined this month. But the distinction is merely one of practicality: Macron realises that an increasingly centralised European state will have to be multi-speed. The hard core will integrate fastest; the more reluctant Europeans will move more slowly. He even thinks the UK may rejoin this slow lane.

Juncker, by contrast, is more one size fits all. Everybody is “duty-bound” to join the euro and European banking union; he wants a “fully fledged European Defence Union by 2025”; a new economic nationalism which screens “foreigners” (ie non-Europeans) from buying certain companies, and a crackdown on Eastern Europeans who oppose a centralisation of immigration policy. It’s all or nothing, with dissidents crushed.

Both men are euro-nationalists, inspired by the 20th-century ideology of Jean Monnet and Robert Schuman; both share the same assumptions; both are latter-day empire builders who want to “reunite” Europe and pit it against other countries. It’s a “choice” between two shades of grey that will end in catastrophe by unleashing populist demons across the continent.

To legitimise this power grab, European ideologues like to draw upon the work of the sociologist Benedict Anderson. He claimed that contemporary national identities are “imagined communities” forged out of disparate, pre-industrial groups by national education systems and other forms of top-down cultural moulding.

If “Frenchness” and “Germanness” are mere political creations, then why not replace them with “Europeanness”? Yet the logic is faulty: past acts of extreme social engineering do not justify a project to remould society.

That is not a “liberal” vision but a sinister, authoritarian one. Seeking to replace supposedly “fake” identities with new, carefully constructed ones designed to lead to a particular political outcome is merely replacing one kind of nationalism with another. The British metropolitan Left is kidding itself if it does not see this.

Pro-EU ideologues may argue that by forging a new coherent Euro-demos and holding elections to determine who governs it, a genuine form of democracy will be able to take root in the EU. But that will be a 100 year project, at best.

In the meantime, existing checks and balances will be eroded as power is handed to nameless politicians and officials, and technocracy will reign supreme. Far from saving the enlightenment values that almost perished in the World Wars, European integration will have destroyed them.

Britain never wanted any of this. We joined the European Economic Community for practical reasons: we thought it would modernise our economy and help the West to defeat communism. We were wrong, and we won’t make that mistake again. It will become increasingly impossible, as the years pass and Macron and his allies get their way, for anybody to pretend that the EU is merely a “free market” rather than an embryonic state.

Once we leave, that will be it: we will never rejoin.


Theresa May's speech was eminently reasonable. How could the EU reject it?: Norman Lamont

The Prime Minister’s speech was never going to meet the artificially high expectations that some people, especially her opponents and critics, had set for her. But her words in Florence were thoughtful, eloquent, well-constructed, and provided a vision for Brexit which will be clear both to people in the UK, whether Leavers or Remainers, and in Europe.

What was most striking about the speech was how overwhelmingly reasonable it was. Overwhelmingly reasonable in explaining that Brexit was not an act of hostility by the UK to the EU. Overwhelmingly reasonable in the way it outlined a new relationship, especially a trading relationship neither Norwegian nor EEA, but one manifestly in the interest of both sides. It was reasonable before she made her offer on money and even more so afterwards.

It was so reasonable that even the most stubborn or ostrich-like Eurocrats will surely see that it is in their interest to accept something along these lines. It is difficult to believe that the EU can be so determined to harm itself that it will reject her vision of a deal. Mrs May even curtsied before the idea that we cannot benefit from the single market without being a member of it; many people don’t accept this, and I suspect she does not either, but she nonetheless made obeisance to it.

The transitional period, which she quite rightly prefers to call an implementation period, will offer reassurance to businesses worried about the so-called cliff edge. There is some danger of sudden change in regulatory regimes, but in the busy world of commerce and contracts people will be quite capable of making the necessary adjustments.

Some people will wish to pour cold water on the speech – both opponents of Brexit and people in Europe. It was never going to break the stalemate (if stalemate is what there is at the moment). But it would have been wrong for her to intrude into the negotiations in a detailed way. You cannot negotiate through speeches. She did not attempt to snatch at some instant solution, and quite rightly so. Her speech was a calm one, playing a long game.

Shortly after I stepped down as Chancellor, in 1994, I made a speech at the Conservative Party conference in which I said that one day Britain might have to choose between remaining in Europe and going in a direction that wouldn’t suit us at all, or rather awkwardly having to leave. I’m not surprised we have finally reached that point. But I was always confident that we would be able to secure a close, friendly, mutually beneficial relationship with Europe befitting our status as a large and strong country.

Today Theresa May has set out what that relationship should look like in terms anyone who wants the best for this country, whatever they voted for last June, can understand.

Thursday, September 28, 2017

Thoughts from Galicia: 28.9.17

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.

Life in Spain
  • Cataluña 1: Here's Don Quijones on the latest developments and potential consequences of them.
  • Cataluña 2: Lenox Napier, of Business over Tapas, fears that next weekend will end in riots, rubber bullets and tears. Who's to say he's wrong?
  • You might have noticed DQ's reference to Liberbank in the above article. As he says, it's reported to be in trouble and might well be the next Spanish bank to fail – with or without the fallout from the Catalan mess. In Toledo last week, I was intrigued to see - in the museum dedicated to him - that one of El Greco's paintings was labelled the property of this bank. My immediate thoughts were, firstly that, its value on the bank's books might be more accurate that that of all the properties there, and, secondly, that the picture might not be in the bank's ownership for much longer.
  • Here's The Local warning us - again - of the various things it's unwise to do or say when eating in Spain, especially in someone's house. Sadly, they're mostly true. Which doesn't mean the 'rules' have to be obeyed. Especially given the Spanish attitude to rules.
  • This is a site which might be of interest to all expats living here in Spain. And here and here are pages relevant to only Brits and to expats living in Vigo, in Galicia. They haven't got round to Pontevedra yet.
Here's a report on (possible) EU taxation plans. I guess those who endorse plans for a superstate will regard direct taxation as not only logical and inevitable but also as 'a good thing'. Even if true representation will be minimal, at best. But, as we Brits well know, revolutions have been caused by this sort of thing.

Donald Trump, it says here, was mocked yesterday for referring to Mariano Rajoy as President of Spain, whereas – in a constitutional monarchy – Rajoy is only Prime Minister. But, this time, you can hardly blame Trump. Rajoy is the President of the PP party and, more to the point, is regularly referred to as Presidente here in Spain. To muddy the waters further, Wiki in English labels him Prime Minister, whereas Wiki in Spanish has him as Presidente del gobierno de España. And, as far as I'm aware, he has at least 2 Vice-Presidente/as. One of whom seems to be responsible for just about everything and talks to the media far more than Rajoy. But, if you've heard the latter talk, you'll understand why.

Strangely, Google Alerts offers me info from a wide range of media organs but I can't recall ever seeing anything from the BBCAl Jazeera, yes - inter alia - but the BBC never. Wonder why not.

Nutters Corner: This is a short video showing that Evangelist Christians are not alone in their craziness. But, then, whoever thought they were? Btw . . . it was a perfectly innocuous film.

Finally  . . .  In the UK, fear of knife crime has led to serious restrictions on the sale of anything that could be used to stab someone. In contrast, as these fotos show, in Toledo you can buy even a double-headed war-axe - amongst many, many other types of weapon. There are so many shops there dealing in these things, it's hard to believe they all turn a profit:-

Spain is (still) different . . . 

Wednesday, September 27, 2017

Thoughts from Galicia: 27.9.17

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.

Life in Spain
  • Cataluña: Although Brussels naturally supports Madrid against Barcelona, it's said to be is deeply concerned about Spain's handling of the crisis. But, as at least one commentator has pointed out, whereas the EU has been quite happy to interfere in the politics of other states, it's said absolutely nothing about the situation in public. Doubtless because the PP government conforms to its neo-liberal agenda and, with 3% GDP growth, is otherwise setting a good example to all other EU members.
  • According to the author of this article – in Spanish – the Spanish press is failing to innovate and is effectively committing suicide.
  • Another example of Madrid foot-dragging . . . Spain has only taken in 14%(13.7) of the Syrian refugees that Brussels instructed her to take. I doubt there's a penalty to pay. Or that Spain is the only defaulter.
Do these names mean anything to you?:-
Fallen Angel
Lost Sierra
Night Nurse
Lemon Créme
Pineapple Sage
If so, you're someone who probably doesn't need a site which tells you all about the world of cannabis. Click here to learn why the responsibility for the introduction of cannabis as an intoxicant in the Americas rests with the Spanish, with some help from the Portuguese. 

Talking of EU inaction . . . Although poor little Greece has been browbeaten for 6 years into complying with the 3% deficit rule, there are 2 major economies which have ignored it with impunity for many years – Spain and France. Germany at least managed to get its act together but these 2 major members often give the impression of thinking rules are for others. Especially this one.

Facebook has issued advice on how to tell what is Fake News and what isn't. It includes bad spelling and syntax. On this basis, the UK's Daily Telegraph – which has farmed out sub-editing to ignorant teenagers in New Zealand – is composed of little else but fake news.

Donald Trump: If interested in an overview of his presidency so far, take a butcher's at this article. Taster . . . The Final paragraph: Theoretically, we still live in a republic, but the question is: Who exactly represents whom in Washington? By now, I think we can take a reasonable guess. When the inevitable conflicts arise and Donald Trump must choose between business and country, between himself and the American people, who do you think will get the pink slip? Who will be paying for the intermeshing of the two? Who, like the investors in his bankrupt casinos, will be left holding the bag? At this point, we’re all in the Washington casino and it sure as hell isn’t going to be Donald Trump who takes the financial hit. After all, the house always wins.

Yesterday, the Voz de Galicia gave us the Selectividad marks required to get onto the elite courses at the region's several universities. These used to be out of 10 but are now out of 14. And, of course, to 3 decimal points. They range from 13.7(13.660) to 12.1, with Medicine at the top and – strangely – Veterinary Medicine at the bottom of this First Division. What regularly surprises me is how high Nursing figures, at 12.5 this year. Just above Law at 12.4. Pick the meat out of that. Of course, lawyers are much lower creatures than notaries here in Spain but – as it's not on the list - I guess Notarying is something you study after you've taken your first degree and done very well at it. And then you become a millionaire.

Finally . . . Here in Pontevedra, the 800 year old Convent of The Sisters of Santa Clara has closed its doors. In contrast, I've mentioned that 3 young nuns have recently come from elsewhere to re-open the Convent of the Apparitions. So, as one celestial door closes, another opens. God's plan, I guess.

Today's cartoon:-

Tuesday, September 26, 2017

Thoughts from Galicia: 26.9.17

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.

Life in Spain

I'm again indebted to Lenox Napier of Business Over Tapas for these items:-
  • Público reveals that, in the past 4 years, 58,000 Spaniards have become ‘rich’ - owning more than €1m in assets. The journal contrasts this with the 1.4m people who've become technically ‘poor’ - having an income of less than €6kpa. There are now 5.4m such unfortunates in Spain, it says, notwithstanding recent impressive macro economic growth. 
  • As for influence, allegedly the top 0.4% of the population now control c. 54% of the GDP. Spain is not unique, in this regard, of course.
  • Separately, El Boletín tells us that Spain, the UK and France are the leading countries when it comes to the amounts of cash stashed - and hidden - offshore. In each case, it's said to be 30-40% of the assets of the wealthiest folk
  • Spanish justice comes under fire in this long article, in Spanish.
As ever, events in Germany can be interpreted in numerous - even conflicting - ways. The article at the end of this post seems accurate to me. As does this comment:- Mrs Merkel’s probable alliance with the liberal Free Democrats (FDP) will dim the prospects of German agreement to a push by Mr Macron to deepen the EU’s core zone of single currency states. Mr Macron has bet that his pro-EU reforms in France will help to persuade Germany to accept more “solidarity” in the eurozone. His chances of success diminished on Sunday night. 

Of course, the EU is not the first attempt to subordinate sovereign European states to a superstate. The last one - quite successful at the time - was the Roman Catholic Church, supported by God. And look what happened to that.

In the UK, TV viewers are being treated daily at the moment to the avuncular personae of Labour ex[?]Trots - leader Jeremy Corbyn and shadow Chancellor, John McDonnell. It's all an act, of course. As demonstrated by the raft of anti-business measures threatened by the latter yesterday. I'm reminded that Stalin was known for a long time as Uncle Joe. While murdering millions. Though, to say the least, he wasn't a Trot.

Here in Pontevedra, when you get to the edge of the city on the camino to Santiago, you're presented with this:-

Of course, it doesn't matter which route you take, as either way you end up at Burgo bridge 2-3 minutes later. But the proper route is to the left and, if you don't take it, you won't walk down the street - Rúa da Ponte - where the famous George Borrow stayed in 1837. On which, see here. BTW: I do rather take issue with the author's description of Galicia as a 'province'. Technically, I believe, it's one of Spain's 17 Autonomous Communities. In practice, 'region' is the most useful handle. Especially as it has 4 provinces.

Finally . . .
  1. Isn't it wonderful how companies invent new conditions to worry you. Like ugly elbows or heels, for example. Yesterday I saw an ad for a product for "screen eyes". Allegedly, we blink up to 60% less when we watch a screen. Maybe. But has anyone proved this leads to eye problems?
  2. Is targeted advertising on the net really effective? I ask because yesterday I was presented with an ad telling me prices have dropped at a hotel we stayed at last week. Why on earth would I be interested in that?
  3. If you pride yourself on being rational, you might enjoy this site - Rationality Rules. Yesterday, I enjoyed his debunking of the ouija board nonsense.


The far Right's humbling of Angela Merkel is a wake-up call for complacent Europe - William Hague

For the last six months, there has been rising confidence in European political circles that populist and nationalist forces on the continent were being overcome.

With the Netherlands and France electing moderate leaders and Angela Merkel set for re-election, there has even been a certain conceit – that populism had turned out to be an Anglo-Saxon phenomenon, producing Trump and Brexit, but with sensible voters in the rest of the EU cleaving to the centre ground. 

Any such narrative lies in ruins today. With the nationalist AfD winning at least 80 seats in the German parliament, and the far Left doing well at the same time, nearly a quarter of Germans voted for the political extremes. It is important not to understate the significance of this outcome.

This is Germany: the most powerful state in the EU by far, an undoubted economic success story, and possessed of a strong culture of political moderation since 1945. When millions of its citizens vote to overturn that culture something is seriously wrong.

There are many obvious lessons to be drawn. First, that all those who have told us for years that proportional voting systems work against extremists need to think again.

Second, that Europe is indeed beset by strong populist forces bubbling up beneath the complacent assumptions of its chancelleries – Spain battling Catalan separatism, Italy in political shambles, France with a centrist new President but a huge vote of discontent, and Poland and Hungary led by nationalistic governments.

Third, that in these circumstances the pursuit of the Jean-Claude Juncker agenda of forcing all EU members to join the euro and removing their vetoes on tax and foreign policy is more likely to destroy the European Union than save it.

And fourth, that immigration is the single most crucial issue of the coming years. Merkel has already promised not to repeat her opening up of German borders to a million migrants and refugees, but the next 30 years will bring more than a billion extra people in Africa and the Middle East.

European countries need much stronger control of their borders, a full network of agreements to control migration with all the countries to their south, and a huge effort to encourage development and stability in many places with booming populations. Yet no leader has set out an overall plan to do this despite the prospect that this issue alone could overwhelm EU unity and shatter its centrist political leadership.

The strategic outlook for Europe is now an extremely difficult one. Threatened by an immigration crisis it will struggle to control, the EU also faces Russia seeking to neuter it, America diverging from it, Turkey turning away from it, and a Eurozone the problems of which will reappear with the next recession.

Against that background of mounting dangers and clear rebellion by voters, I have a polite suggestion for my old friends and colleagues around the foreign ministries and parliaments of Europe: you now have the opportunity to respond constructively to one of your other big headaches, namely Britain’s exit. In a world of problems you will struggle to overcome, this one now has a solution.

The speech delivered by Theresa May in Florence last Friday demonstrated the British commitment to uphold the security of the rest of Europe. She also rightly pointed out that when we have left the EU, we will be its biggest trading partner, so it is in our common interest to reach a workable agreement. And she called for “a new alliance that can stand strongly together in the world”. That is indeed what we are all going to need.

The Prime Minister’s speech contained serious offers. It suggested solutions to difficult issues – like how to enforce the rights of EU citizens in the UK – and promised that we would not leave other countries with higher bills to pay or less money than they were expecting.

It was clear about seeking a two-year transition to help businesses in every country to prepare. Yes, it took great political effort in a minority government in which everyone has strong opinions, but it said everything that those of us favouring a realistic and pragmatic approach to Brexit had asked for.

EU negotiators are not of course going to say: “Marvellous, that’s cracked it and we can settle on whatever you just said.” As talks resume this week, they are going to probe for more details, press for further specific commitments, and nail down as many concessions as possible.

Fair enough. But in three weeks time, the EU heads of government will meet and will have to decide if enough progress is being made to warrant widening the negotiations into a full discussion of the future relationship and all the matters the UK needs to discuss.

They know they have time on their side, because the longer it takes to make a breakthrough in the talks, the more international businesses will make plans to move operations out of Britain.

So they will be tempted to delay matters further, with the probability that Angela Merkel will be mired for many weeks in coalition negotiations as an excuse. One or two more months, they might calculate, will screw a bit more money out of the British.

In narrow negotiating terms, such an attitude would not be a huge surprise. But it broader strategic terms, looking at the need for a sensible outcome, it would be a great mistake, suggesting a Europe lacking in vision and incapable of leadership, the very things so many voters are rebelling against.

It would harden the attitudes of many people in the UK, and make it more difficult for Theresa May to seal an eventual agreement.

Europe’s leaders are underestimating the scale of the challenges they face, as the shock of the German elections has shown. They are going to need a mutually supportive friendship with us in Britain, just as we need that with them. Since our Prime Minister has done all she could reasonably do to unlock the talks on what that might mean, they need to respond in kind. 

If they don’t, they will risk adding yet another big item to the long and growing list of problems darkening Europe’s future, of an estranged, not just separated, Britain. They will have enough to deal with, without the justified resentment of a generous and fair-minded people.

Monday, September 25, 2017

Thoughts from Galicia: 25.9.17

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.

Life in Spain
  • Madrid v Barcelona: Time for Solomon to step in? See here on the latest developments. The final sentence of this seems about right:- How this escalating clash between Madrid and Catalonia is resolved over the coming week will define the fate of Spain for years to come. Assuming it is resolved, of course.
  • The Local gives us here - or attempts to anyway - the secret of Spanish longevity.
  • In contrast, it reports here on Spain's sudden and drastic reduction in her global health ranking.
  • Further down the negative road, here's something - in Spanish - on the death of the entire country. 
  • Guess which country has garnered 60% of EU fines for maladministration of funds over the last 5 years. Way behind, at no. 2, is Belgium, followed by Greece, at no. 3. And, no, it isn't Italy.
  • So . . . Reader comments suggest that tap water around Spain - as I've always - assumed is safe to drink but of variable taste. Well water - rather obviously - less so. People who only have the latter justifiably choose to buy bottled water but might, like reader Maria, go for the 5L bottles which cost about 50c, rather than the vastly expensive branded stuff from the likes of Nestlé. Which is what I buy for my sniffy daughters and visitors who turn up their refined noses at what comes out of my taps.
At the end of this post, there's a fascinating article on the German economy by one of my favourite columnists, Ambrose Evans-Pritchard.

Here in Galicia, our many rural dwellers continue to be up in arms again the speed-bumps which our local councils insist on placing in profusion on secondary roads. There's possibly no connection but yesterday the horrifying statistics on tractor accidents and deaths here were published. Someone in authority commented that some drivers treat them like Formula One cars. So, no different from any other vehicle on Spanish roads.

People here are also increasingly annoyed by the refusal of Franco's descendants to obey the law and open up the Meiras palace to the public, though the latest news is that they've caved in to the pressure and threats of legal action.

In 4 days in Segovia, Ávila and Toledo last week, we weren't hassled by a single beggar. Yesterday in Pontevedra, I was accosted by 3 new ones in an hour and half. (Our regulars don't bother to bother me.) Anyone got an explanation for this difference? Does it come down to the attitude of the city/town council?

The best news of the week - In it's upcoming fiesta gastronomica, the nearby town of Porriño will be offering vegetarian tripe. Made from tofu and comisu[?], whatever the hell that is.

Finally . . . Just in case anyone is interested . . . To exclude unwanted articles from Google Alert's search, you have to add the unwanted item(s) - preceded by a minus sign - in the same box as the article you do want. If you add them as new items, you will get even more of them!

Today's cartoon:-


Queen Angela commands a German economy unfit for the 21st Century

The German economic supercycle peaked two years ago. Chancellor Angela Merkel’s unenviable task over her fourth term is to manage national decline, whatever the make-up of the next coalition.
The pathologies eating away at the country’s pre-digital 20th Century economy have been masked by distortions of monetary union, and lately by the ‘QE boom’ and cyclical overheating. Monetary policy today is far too loose for German conditions. 

The Bundesbank warns that this year’s torrid economic expansion is not sustainable. It estimates that trend growth will fall to 0.75pc a year by 2021 unless something is done to revive Germany’s stagnant productivity.

This is ‘Japanisation’, and it is happening for much the same reasons as in Japan.  The workforce has already flattened. The Bundesbank assumes that it will shrink by 200,000 a year in the early 2020s under any plausible scenario for immigration - and that calculation was made before the anti-Muslim AfD party swept into the German parliament on a backlash vote.

The ‘demographic dividend’ of the baby boom is expiring. Half a million Germans will retire each year from now on. The old-age dependency ratio will rise from 26.5pc to 39.3pc by 2025, before spiraling up to 56pc by mid-century.

The presumption is that ageing societies have a status quo bias and lose their cutting edge over time. “It is likely to affect technological progress and will have a dampening effect on macroeconomic productivity growth,” said the Bundesbank.

Germany’s Council of Economic Experts rebukes Angela Merkel’s coalition for failing to fix the roof while the sun is shining. The political class is “resting on its laurels”, lulled into a false sense of security by the prop of a cheap exchange rate and a temporary remission in the eurozone crisis.
“The reform track record of the current government is disappointing. The economically successful period was not used sufficiently to prepare the German economy for disruptive technological changes,” it said.

These challenges are legion and forensically dissected in “Die Deutschland Illusion” by Marcel Fratzscher, head of the German Economic Institute (DIW), who says foreigners who fawn over the German model do the country no favours.  

There is no miracle in his view.  Germany’s growth since 2000 has been dismal by its own past standards. The country has suffered a loss of dynamism compared to East Asia, the Anglo-Saxon countries, and Scandinavia. 

German industry may have perfected the proverbial spark plug but it has been left behind by the information and data revolution.  Less than 1.8pc of broadband connections in the country use high-speed fibre that is 20 times faster. Lower than Turkey and Mexico, and the lowest in the OECD club.  The system still relies on copper wire.

The government refused to exploit the lowest borrowing costs in history - below zero for seven years even today - to upgrade its outdated infrastructure. Net public investment has been negative for most of the last fifteen years. Finance minister Wolfgang Schauble has pursued his Holy Grail of a balanced budget, disregarding all else. This is now written into the constitution.

Historians may one day deem this to be a strategic blunder. Germany is overly-reliant on an engineering model in a world where digital technology and artificial intelligence are changing everything. Cars are becoming computers on wheels. The advantage is shifting from Wolfsburg to Silicon Valley. 

The big German car-makers have deep pockets and superb technicians. They will fight back hard with their own range of electric vehicles (EVs) after wasting several years deriding the ‘Tesla’ threat. But as Daimler chief Dieter Zetsche said last week, profits on EVs may be half what the company makes on the internal combustion engine. Since EVs have far fewer moving parts and last much longer, they will not for long support an automotive sector that today makes up 14pc of German GDP.

The car industry bet the farm on diesel and will struggle to extract itself quickly. These diesel engines were supposed to be the bridge to the EU’s low-emission standards of 95 grams of CO2 per kilometer by 2021. But diesel production is now in run-off. Paris, Madrid, and Athens have bans coming into force. Asia is closing the door.  

German car-makers can off course switch back to petrol quickly. The core problem is that they are not ready to meet these emission targets with petrol engines. It is proving very costly to further refine the combustion engine to this level in time. 

Worse yet - for them - China has imposed draconian rules stipulating that zero-emission vehicles must make up 8pc of total sales next year, rising to 10pc in 2019, and 12pc in 2020. This is an earthquake. German manufacturers cannot come close. They risk being shut out of the world’s largest car market.

It touches on Germany’s broader problem with China. For a giddy decade German exporters were able to ride the ‘China wave’, becoming the supplier-in-chief of machine tools and capital goods for the industrialisation of Asia. But this catch-up phase is over.

The German Council of Experts says exports to China have stalled since 2015 and now something more threatening is happening. “China is increasingly exporting products that coincide with Germany's top export categories,” it said.

As China moves up the technology ladder it is competing toe-to-toe with German companies across third markets. The Lehrer has outgrown the Meister. The destruction of Germany’s once world-beating solar champions by Chinese upstarts shows just how fast this can happen. 

The Council cited a study estimating that a permanent 10pc decline in German exports to China, would cut German GDP by 4.8pc within a four-year period. This is a startling level of dependency. 
Part of Germany’s Wirtschaftswunder over the last twelve years has been real, but part is a mirage caused by the structure of monetary union. The euro system allowed to the country to lock in a 15pc to 20pc advantage in intra-EMU competitiveness by holding down wages in an ‘internal devaluation’, made possible by the Hartz IV labour reforms. 

Unit labour costs in manufacturing fell 4.4pc in the single year of 2005 as companies such as Volkswagen forced through effective wage cuts by threatening to shift plants to Eastern Europe.  This led to German ascendancy in the eurozone but at the cost of a Lost Decade for the European economy as a whole. 

Less understood, it also caused the pauperisation of Germany’s own working class although efforts are belatedly underway to cushion the effects. Half the population saw a protracted fall in real incomes. The reforms pushed almost seven million people into part-time ‘mini-jobs’ paying just €450 a month, flattering the jobless statistics.

“People are struggling to survive,” says professor Richard Werner, a German economist at Southampton University. “We have a bigger proletariat. Hidden unemployment is at a least one million.”

Critics say economic policy-making was captured by the exporting elites, and justified by a mercantilist ideology that extolled export-virtue as close to godliness. Berlin long patted itself on the back for achieving a current account surplus of 8.5pc of GDP, technically illegal under EU rules.

This is at last changing. Elga Bartsch from Morgan Stanley says Berlin has woken up to the “dark side” of these chronic imbalances: capital is rotated out of the country; the structure leads mechanically to a lack of corporate investment within Germany.  It is a trap for Germany itself.
As Adam Smith famously wrote, there is much ruin in a great nation. These are slow, corrosive effects. Britain knows them well from past episodes of complacency. But they are also powerful and hard to reverse. 

By the time Mrs Merkel hands the Kanzleramt to her successor in 2021, the trajectory will be obvious to everybody. Historians will judge the economic reign of Queen Angela in a harsher light than today’s media.