Thursday, May 31, 2018

Thoughts from Galicia, Spain: 31.5.18

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.

  • The censure vote will take place tomorrow. I get the impression PM/President Rajoy thinks that, if he clings to power for another 2 years, he'll be able to restore the PP to its leading position in the political spectrum before the next general elections in 2020. He comes across as an arrogant dead-duck who takes no responsibility at all for the party's massive corruption of the last 20 plus years or so. But - as the PSOE struggles to get the required numbers - he might well be given the chance to succeed or fail.
  • In the UK, Mrs May constantly contends – publicly - with people in her own party who aspire to replace her. There must be such folk in the PP party here but, so far, tribal loyalty has been rock-firm and no one has put his/her head above the ramparts. It's very hard to believe there are no people in the party who know that more of Rajoy could well be very bad for the party. But they're clearly not willing or able to do something about it. Two more years of power and money is clearly a less unattractive option than getting the boot in 2020.
  • But, for now, an El País columnist takes the view here that the PSOE leader has fluffed his chance and will not only fail with the censure but will actually strengthen Rajoy and the PP party in the process. I fear he's right. And this can only be because the newish 'liberal/centrist/right-of-centre' Ciudadanos party believes keeping Rajoy and the PP party in power will be to its benefit in 2020. Of course, they might be right too. Stuff the country and its image in the meantime.
  • For the Left, the only hope is that PSOE and the far-more-socialist Podemos party will come together in the 'coalition' which the leader fo the latter is hinting at.
  • Spanish banks might well have yet another headache to deal with – Turkey. Says the Express, at least. Not a paper I'd usually trust much. Click here.
Life in Spain
  • I had a minor op yesterday and was impressed by the informal, non-hierarchical environment in the operating theatre. To me, this is a key - and very attractive - feature of Spanish society. Instantaneous 'friendship'. Albeit pretty superficial, of course. I was less impressed by the surgeon arriving at 9.15pm for a 6pm discussion of whether or not I could go home. But surgeons are busy people everywhere in the world. And I'd taken a book of cryptic crosswords, which came in very handy. As it always does.
The EU:
  • If you want to know why Italy has gone from loving to hating the EU, read the first article below, or click here.
  • In similar vein, here's  Roger Black -a self-confessed 'EU pessimist' (my club, of course) - on the threatened future of the EU. Which stems from admitting as a member another country apart from Greece which didn't qualify - WYB Italy? And from countries - France and Germany - breaking the fundamental rules whenever it suits them, while castigating (if not actually ruining) others. Under a government which can't be voted out.
  • Also below, as the second article, is Ambrose Evans Pritchard's latest thoughts on the subject of the mismanagement of Italy. After years of reporting from Brussels and observing the EU in action, AEP now sees it as a 'bankrupt edifice'.
I might have to shorten my odds on the EU failing to survive another 20 years. Hope we can all keep the good bits that middle class liberals love so much. 

Social Media
Finally . . . For Spanish readers/readers of Spanish, a friend in the George Borrow Society has produced George Borrow en España, which can be obtained here. It's a collection of articles on the fascinating man. In case you need it, here's the Wiki page him. He was quite a character.

© David Colin Davies, Pontevedra: 31.5.18


1. This is the New Italy: Attilio Moro, a 'veteran Italian journalist'.

Years of neoliberal economic policies imposed by Brussels and by Italian politicians alike have devastated numerous industrial towns and the very fabric of Italian society.

Sesto San Giovanni, a town on the outskirts of Milan, used to be one of the industrial capitals of Italy. With around 200,000 inhabitants (45,000 blue collar workers, and a robust middle class), it was the headquarters of some of the most dynamic Italian companies, including Magneti Marelli, Falck, Breda and many more.

Today Sesto is an industrial desert – the factories are gone, the professional middle class has fled, many stores have shut down, and the city is trying to reinvent itself as a medical research center.

Twenty-three kilometers (14 miles) to the north of Sesto, the town of Meda was the seat of various symbols of Italian excellence: Salotti Cassina and Poltrona Frau, both of which exported high-quality furniture all over the world and employed tens of thousands of workers and designers. They fed a number of small family-based companies providing parts and highly qualified seasonal labour. Today both companies are gone.

Luca Cordero di Montezemolo, a former chairman of Ferrari, Fiat and Alitalia, and now a public enemy because of his dismissal of the “Made in Italy” label, acquired both companies and moved them to Turkey, choosing profit over quality—and Italian jobs. Montezemolo, of aristocratic background, is a champion of Italian neoliberalism, having founded the influential “free market” think tank Italia Futura (Future Italy) in 2009.

Another victim is the town of Sora, with a population of 25,000, 80 km. (50 miles) east of Rome. Until recently Sora was an affluent commercial city, with medium-sized paper factories and hundreds of shops. Today, all of the factories are gone and 50 percent of shops have closed.

All over Italy, the neoliberal policies that led to the economic crisis and resulting social decadence have accelerated in the wake of the financial collapse of 2007.

Once The Stalingrad of Italy

Sesto San Giovanni used to be known as ‘the Italian Stalingrad’, due to the strength of its working class and the Communist Party receiving over 50 percent of the vote. Now the strongest party in town is the Lega (The League), a right wing, xenophobic party. This has been accompanied by a demographic shift, as Sesto has lost almost one third of its population, but acquired tens of thousands of immigrants, which today constitute almost 20 percent of its population.

The Italian Communist Party, once the strongest in the capitalist world, has in the meantime disappeared, together with the working class. There is also the destitution of a dwindling middle class accompanying the breakdown of the social fabric with rampant corruption. All the traditional political parties have been wiped away.

They have been replaced by the so-called ‘populists’: The Lega and the 5 Star Movement, undisputed winners of the latest elections in March, who are now in the process of trying to form a new government. The Lega expresses the frustrations of the north of Italy that is still productive (fashion, services and some high quality products), and demands lower taxes, as Italian taxes are among the highest in Europe. They also want a parallel national currency, a reduction in circulation of the Euro (which slows down exports, especially to Germany) and limits to immigration.

The 5 Star Movement, which is partly considered to be the heir of the former Communist Party but with a different social base consisting of an undifferentiated lower class replacing the disappearing working class. It advocates a moralization of the political parties and a universal basic income of 750 euros per month ($875) for the poorest to reduce the effects of the social disaster which took place in the south of the country in the last 10 years: 20 percent unemployment, affecting 40 percent of young people, making the mafia and organized crime the biggest ‘employers’ in the most critical southern regions.

This is the new Italy. The old one, the Italy of Fiat, Cassina, small family-run businesses, the Italy of the Christian Democrats, the Communist Party and vibrant working-class culture is no more.

2. Brussels' kamikaze tactics to keep the EU dream alive will end in tears: Ambrose Evans Pritchard

No, you can’t leave the EU, you can’t quit the euro and you can’t even have a little less Europe. How dare you even ask? You don’t really believe that we would let you have your own way, did you? That has been the establishment’s breathtaking retort to every democratic cris de coeur across Europe these past few years, most recently in Italy.

This is an absurdly risky strategy straight from a kamikaze playbook: the EU is not merely playing with fire but deliberately setting light to the tinderbox. Why provoke electors by conceding nothing to their demands and treating them like children? Why incite a backlash, with potentially devastating consequences?

Yet for those who buy into the EU’s warped logic, this fear-driven double or quits strategy makes some sense. The worldview that motivates many true European believers is based on a simple, yet demonstrably flawed, premise: that “disunity” and the existence of competing nation-states is what caused the First and Second World Wars, and so the creation of a single European state is the only way to save Europe from itself.

The stakes are so immense in a nuclear world that – to these pro-EU ideologues – it’s worth sacrificing everything else, from free speech to democracy, for the ultimate goal. Hence the pro-EU side’s ruthlessness, the increasingly successful attempts at stopping a meaningful Brexit, the support for Madrid’s obscene crushing of the pro-Catalan independence movement, and now the rejection by the Italian president of a Eurosceptic finance minister.

The political and moral cost of defying democracy, of the lies, of the endless obfuscation and hypocrisy: none matter in a world where the means, any means, justify the end. All will be forgiven, even the destruction of Europe’s enlightenment values and its historic institutions, as long as the project survives indefinitely.

The “hope” was that the next economic crisis, when it came, would allow the EU to integrate further, rather than threaten the collapse of the whole edifice. And that is why Brussels is panicking

Yet the pro-EU side’s understanding of history is hopelessly flawed. It is simply not true, wherever one looks in the world, that modern, democratic self-governing countries have a tendency to go to war with their neighbours. The very opposite holds: almost all are inherently peaceful, and very few seek armed conflict.

In the 1930s, Germany, Italy, Japan and the Soviet Union had never been properly liberal or democratic. It is certainly true that countries can regress spectacularly, as we have seen with Erdogan’s Turkey. It is more than likely that at some point one or other country in the West will embrace an expansionary fascist, communist or other authoritarian ideology, perhaps as the result of a depression.

But the answer is not to pre-emptively abolish all nation-states and subsume them into an unaccountable, technocratic empire: there are such things as internal, civil wars, and there would just be more of those. The better answer is to create multilateral alliances that ensure the world can deal promptly with countries that go rogue, while embracing international economic policies that make extremist lurches less likely.

Caretaker prime minister Carlo Cottarelli leaves parliament for a meeting with the Italian president, aiming to break the impasse in the country's politics Credit:ANDREAS SOLARO/AFP/Getty Images

It’s not just the EU’s understanding of history that is dodgy, leading it to overreach dangerously: its grasp of economics is equally disastrous and is the other, related explanation for the current madness. Ever since Jean Monnet, one of the founding fathers of the EU, economics has been seen as a tool of politics: policy has been designed not to maximise growth or promote free markets but to force political unification. Crises can be a good thing in this dystopian vision, especially with a set of institutions whose answer to every problem is more powers for Brussels.

The euro was always necessary to achieve political unification: all states have their own currency. But the EU took a massive gamble when it launched the euro. It was designed not merely with no possible way back for the Franc, Mark or Lira but also to ensure that the fiscal affairs of member states were interlocked to a far greater extent than almost anybody still realises today.

The euro isn’t really a single currency but a hopelessly complex monetary system, with internal debits and credits reflecting capital flows between the different national central banks as part of the Target2 system. Despite all of that, the euro didn’t come with any explicit fiscal integration: there was no single tax system and Treasury for the EU as this would, rightly, have been anathema to electorates, including in Germany.

The “hope” was that the next economic crisis, when it came, would allow the EU to integrate further, rather than threaten the collapse of the whole edifice. And that is why Brussels is panicking: Euroscepticism is rampant, and almost nobody wants to massively increase the size of the EU budget, which would be the logical next step. Brussels is facing the wrong sort of crisis, one that wasn’t part of Monnet’s playbook, and one that could trigger another 2008-style calamity.

The EU’s last roll of the dice is to portray itself as the only true supporter of bourgeois values and capitalism. It’s nonsense, of course

Even if it were managed carefully, a dismantling of the euro would wipe out the Bundesbank’s nearly €1 trillion in Target2 credits, which would finish off the German centre-Right and centre-Left and threaten political stability in Berlin; it also means that the Eurocrats will do anything, including shutting down a dissident country’s banking system, to stop anybody from leaving.

The EU’s last roll of the dice is to portray itself as the only true supporter of bourgeois values and capitalism. The message to the middle classes is simple: if you value your assets, support the status quo. It’s nonsense, of course: the EU’s economic system is a cross between corporatism and social-democracy, with strong protectionist tendencies, and an ultra-distortionary monetary policy rigged against savers. It is not designed to promote economic liberty and prosperity, which is why the EU has underperformed for so long.

But it means that Eurosceptics, in Italy and elsewhere, are using Left-wing rhetoric to oppose the EU, another appalling development. In Italy’s case, they are blaming “speculators” for not getting their own way, rather than a political stitch-up. Down that road lies not Eurosceptic rejuvenation but economic ruin.

That is the problem, ultimately, with the EU’s scorched earth policy, its decision to sacrifice every ideal and every value to keep itself alive: when its bankrupt edifice is finally torn down, be it in a year or in a decade’s time, there will be very little left to save.

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