Thursday, August 09, 2018

Thoughts from Galicia, Spain: 9.8.18

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. Garish but informative.

  • Lenox Napier here expresses some concerns about the impact of increasing immigration.
  • And The Local reports here on a deal between Spain and Germany on this issue.
Life in Spain
  • Lenox mentions manteros in his post. These are the men who sell things – illegally – from blankets (mantas) on the ground. Down on Gran Vía in Madrid last week, there were many more of these than there used to be, it seemed to me. And each of them held 4 strings in his hand, attached to his blanket's corners. I'm sure you can work out why. I don't recall seeing this before but am probably wrong.
  • I was a bit surprised not to see our local autopistas mentioned in this revealing article – apart from the very cheap one cited (which hardly anyone uses) from Vigo to both Bayona on the coast and Porriño/Portugal inland. My calculation is that our far-less-cheap toll road from Pontevedra to Vigo costs 14 centimos a kilometre.
  • In an article on Fart's antipathy to Mrs Merkel, I read that: For much of his life Trump has denied his origins; he is a self-hating German. His grandfather Friedrich (now Frederick) skipped to America to avoid military service, trained as a barber in New York, followed the gold rush and made money not out of prospecting but out of restaurants and brothels. He hid his German roots during the First World War. Trump's father reinvented himself as Swedish to fend off any hostility in the Second World War and the son seems to have accepted the fiction to get through military school, where many of his instructors had been vets. In 'The Art of the Deal' he described himself as a Swede and does not appear to have acknowledged his German heritage until the 1990s. Who'd believe it. Everyone, I guess.
The EU and Brexit
  • I commented to reader Sierra yesterday that: “If I had to (optimistically) guess, I'd say that a degree of common sense will lead to an extension of the time frame in which to work things out.” Maybe this won't be necessary, as I read in The Times this morning that: European leaders are preparing to negotiate a deal that would let Britain remain in the single market for goods while opting out of free movement of people. Member states have let it be known that they could abandon one of the bloc’s ideological red lines in return for more Brexit concessions from Theresa May. They expect her to replicate all new EU environmental, social and customs rules in addition to those set out in the Chequers white paper. But can this really be true? Is the awful reality – see the article below - of a Hard Brexit for both sides beginning to force serious (and sensible) compromises?
Galicia and Pontevedra
  • For Lenox Napier, one of the advantages of living in Murcia is the ability to eat in 'Moorish' retaurants. How I wish we could here in Galicia, where the attitude to international cuisine is, shall we say, conservative.
  • It's reported that the further north you go in Galicia, the lighter the locals' skin is and the more blue eyes there are. Presumably in pairs. The legacy of British raiders and pirates?? And/or less 'Moorish' impact?
  • It's also reported that the average height of Galician males is now 176cm(5 foot 9 inches), which was a surprise to me. For Gallegas, it's 163cm(5 foot 4 inches).
Finally . . .
  • Of no great interest to anyone except me, but for the record . . .
Yesterday's readership by country:-
UK – 46%
Spain – 33%
USA – 12%
Australia – 3%
Ireland - 3%
New Zealand - 3%

By city:
La Coruña: 13%
New York: 9%
London: 6%
Lugo: 4%
Vigo: 4%
Mitcheldean: 4%

I have to admit I had to look up Mitcheldean . . .

© David Colin Davies, Pontevedra: 9.8.18


Let's be honest about a no-deal Brexit; it has nothing to offer but blood, toil, sweat and tears: Roger Boyes, The Telegraph.

For the umpteenth time, no-deal is not an option, or at least not one that you would voluntarily choose. Before accusing me of "remoaner" pessimism, let me explain why, for there has been much ill-informed nonsense of late to the effect that we have nothing to fear from such an outcome but fear itself. This is denial verging on the delusional.

Jeremy Hunt, the Foreign Secretary, says the chances of a no-deal Brexit grow by the day, Mark Carney, Governor of the Bank of England, says those chances have become uncomfortably high, and Liam Fox, the International Trade Secretary reckons it’s now more likely than not. Each ill-judged utterance brings the pound that bit closer to outright parity with the once languishing euro.

With this slide towards the cliff edge has come a gathering volume of commentary to suggest that such a divorce would be both manageable and even positively desirable.  The safety net of World Trade Organisation terms are all the protection we need, it is claimed, making it impossible for the EU to discriminate against our goods and services.

The reality is that the WTO framework is not as robust as it might seem, and crucially we would still have to rely on the goodwill and agreement of the EU to make it work in our favour. In other words, we would need some sort of a deal.

Intransigence by the European Commission and its puppet masters in France and Germany might yet bring matters to the acrimonious, no deal divorce that markets fear, though at this stage it is quite hard to see MPs agreeing it. Instead, parliament would seek an extension, and the Government would be sent back to try again.

But to argue that come what may it will all be fine, and like the millennium bug we’ll soon be wondering what all the fuss was about, smacks of arrogance and complacency, and risks a massive political letdown when it turns out not to be true.

Whoever takes us down that path must be honest about the consequences, and like Churchill, admit that they have nothing to offer but blood, toil, sweat and tears.

In the long term, advocates of this approach could be right; with the correct policies on tax and regulatory competitiveness, Britain might indeed thrive outside the EU. But supply side reform takes time to work. Payback will be some distance off. “In the long run we are all dead," observed the economist John Maynard Keynes. “Economists set themselves too easy, too useless a task, if in tempestuous seasons they can only tell us, that when the storm is long past, the ocean is flat again”.

One analogy that comes to mind is that of a car gliding along the motorway in sixth gear where the driver suddenly decides to wrench it into second or first. With luck it won’t destroy the gearbox, but it will cause the vehicle violently to slow, throwing the passengers forward in their seats. It will take some time to once more achieve cruise speed.

The millennium bug comparison comes from Bernard Jenkin, as thoughtful a parliamentarian as you could hope to find. But on this occasion, it is a misleading one. Today, we do indeed wonder what all the fuss was about. Yet we would likely have had a very different perspective had not so much money and effort been spent on neutralising it. By definition, we only see the disasters that happen, not the ones that are averted.

At the centre of the belief that it will all be fine on the night lies the admittedly not unreasonable assumption that since our regulations and standards will look no different the day after we leave than the day before, there could be no valid reason for interfering with trade as it is.

In an ideal world, this would indeed be the case. Unfortunately, the WTO provides no guarantee or legal underpinning for such hope. In virtually all its position papers in preparation for Brexit, the EU makes plain that Britain becomes a third country from the moment it exits. Without some form of dispensation, all those myriad tariff and non tariff barriers to trade immediately kick in. This may be legalistic and irrational, but it is the law. There is almost no business that takes place outside a legal framework of this sort.

Here’s one example. To sell medical equipment in the EU requires a certificate – or  “Conformité Européene” marking – to show required standards are met. These certificates are pretty much automatic for EU members, and as it happens are substantially written here in the UK for the EU as a whole, but would cease to be valid for UK suppliers when Britain becomes a third country. UK certification authorities will no longer be recognised.

Even if the UK said it planned to remain fully compliant with the EU, including ECJ rulings on such matters, the EU could if it wished to play hardball either refuse such certificates or subject British medical equipment to vigorous border controls to ensure compliance. Some countries – Switzerland, Australia and Turkey – enjoy mutual recognition with the EU on medical equipment standards, but by definition, this requires a deal to be struck.

Talk of empty supermarket shelves, long tailbacks at ports, stockpiling of drugs at hospitals – this all does admittedly seem somewhat hysterical. But to step outside the EU’s borders after decades of being within them, and begin trading instead on WTO terms, will none the less be a significant shock to the system. It is naive to think otherwise.

WTO rules to prevent discrimination provide little more protection than a thin cotton overcoat in a Force 9 gale. So long as the EU can show it no more discriminates against the UK than any other third country, it would be within the rules. This will be easy enough in all the high value-added trade the UK does with the EU.

And even where there is a valid legal case, it will take a long time for the WTO to decide it. By the time the ruling is made, the damage will be done.

For the EU to apply such an approach would be vindictive, economically irrational and self harming, but it shows no sign of giving way. Its stance is like that of Hugh Owens, the 78-year-old mushroom farmer who refuses to allow his wife to divorce him. It intends to make leaving this loveless marriage as difficult and costly as possible. The last thing the EU wants is for the UK to succeed once outside, for that would surely undermine its raison d’etre.

It will therefore be as parsimonious as possible with its favours.

To raise these points is not to succumb to Project Fear, but only to recognise the almost impossible task faced by those heroically trying to reconcile the smooth and easy Brexit promised with the unreasonable demands of the the world as we find it.

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