Friday, December 14, 2018

Thoughts from Headingley, England: 14.12.18

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.

  • I walked into the village centre this morning behind 4 young people. Three were clearly male – 2 in fashionable drainpipe jeans and 1 in loose trousers that ended just above his ankles. The 4th was wearing tights and so it wasn't until I'd passed them that I could identify his gender as male. Well, his sex, anyway. God knows about gender these days. Assuming I've got that the right way round.
  • I spent much of the morning watching my 2 young grandchildren in a play place. It was very enjoyable. At times. My 3 year old granddaughter - presumably hungry - pointed 4 times to a door and said "The cafe´s through there." What the Spanish call an indirecta. She clearly needs to be more assertive. . .
  • I think it was Noel Coward who said the Costa del Sol was 'a sunny place for shady people'. No, it was Somerset Maugham and he was talking about the French Riviera. No matter. Here's an article on the Spanish claimant.
  • Here's something that'll ensure the already over-touristed city of Granada is infested with even more visitors. Soon you'll have to book a timed-ticket for the entire city, not just the Alhambra.
  • And here's a video on Galicia, entitiled A Celtic paradise. Which is partly true.
  • Professor Brigitte Granville, a French economist at Queen Mary University of London: The biggest danger for monetary union is not Greece, or Italy, it is France. The European Commission is in a serious bind. Any demand for harsh budget cuts in France in this volatile political mood could spin out of control. If they make the French too angry, it’s the end of the euro. And that's to ignore the impact of not doing so on the Italians. Still, you can't make an omelette without breaking eggs. . . .
The UK and Brexit
  • Just how much pain, punishment and humiliation can Mrs May take? She's now a duck lacking the basic requirements for lameness - a single leg - after the wind-in-their-sales EU leaders not just rejected her pleas for (legalisitc) help but hardened their demands and conditions. As I've said, why not? They're in the saddle, with 27 whips. In so far as they can be in a boat and on 27 horses at the same time. Which they clearly are.
  • And yet, there's a strong view in the UK media that the developments of the last week have increased the chances of Mrs May's universally disliked deal being accepted, in January if not in December. But you'd have to be chess grandmaster to understand the logic.
  • A couple of fundamental points/questions about the EU from one Brexiteer's perspective:-
- Given the way the EU has behaved during the Brexit negotiations, Remainers can hardly portray the bloc as a body which respects the views of its peoples. Indeed, the bruising experience of the past few years has exposed the central reason why many voted to leave: the gaping democratic deficit at the EU’s very heart. It is this lacuna which has manifested itself in the rise of populist parties across Europe, from the Front National in France to the Five Star movement in Italy and the AfD in Germany.
- Why would we lock ourselves for the next 40 years into an institution that we don’t like?
- Remainers in a second referendum will have to answer this last question. They will have to say why they support moves to deepen the structures of the EU as outlined by Jean-Claude Juncker, the outgoing EU Commission president, in his “road map”. Yes, we might remain for a while outside the eurozone and the Schengen area, the cornerstones of nascent European statehood. But it will become increasingly hard to do so if we decide to remain. And, presumably, those who want to stay will make the case for us to join both. After all, if they think the EU is a good thing, why not commit to it fully?

Meanwhile . . .

Said EU
  • Siren voices continue to warn that, economically, things are going to get very bad very quickly. Which will make the consequences for EU states of a Brexit even worse than they fear. A couple of views:-
  1. Ambrose Evans Pritchard: The balance of economic terror over Brexit has shifted over the last year. The eurozone is more vulnerable to the shock of no-deal rupture on punitive Macronesque terms than it was at the point of peak hubris in December 2017, when EU negotiators set the trap of the Irish backstop.
  2. Jeremy Warner: Throughout Europe, the UK included, economic growth has slowed to a snail’s pace. Business investment is on hold, and sentiment almost everywhere is turning down. Outside Germany and its satellite states, Europe remains an unmitigated disaster area. In withdrawing monetary support, the European Central Bank answers to the supposed needs of the Eurozone’s German core, but in so doing further threatens economic recovery and therefore political stability in the still severely compromised periphery. . . . Inbuilt contradictions at the heart of Europe’s single currency are again coming back to haunt it.
  3. Ambrose Evans Pritchard again: The ECB is to halt its €2.6 trillion programme of bond purchases this month despite the deepening economic slowdown in the eurozone and the lack of any safety buffer against a deflation shock. The 4-year blitz of emergency stimulus saved the European banking system and helped lift Europe out of an economic slump but has failed to generate self-sustaining momentum. Core inflation remains nailed to the floor at 1.1%. Such a low level at this late stage of the cycle raises the risk of deflation and poisonous debt dynamics in the next recession.   . . .Mario Draghi, the ECB’s president, said quantitative easing had been a resounding success given the impossible circumstances. It was the “only driver of this recovery” at crucial moments. . . . Critics say the ECB waited too long before launching QE in early 2015 - 6 years after the US Federal Reserve - and allowed the deflationary forces to become lodged in parts of the system. It may now be trapped. The window is closing as the ageing global expansion fades. Mr Draghi warned of “downside risks” to the economy but stuck to his line that the sudden slowdown over recent months is a hiccup caused by one-off factors and disruption in the car industry. The ECB tweaked its forecast slightly but is still banking on growth of 1.7% next year. . . .“It is the usual soothing babble from the ECB,” said Ashoka Mody, a former bail-out chief for the International Monetary Fund in Europe. “They are seriously underestimating the pace of the slowdown. China’s stimulus has run out and this is causing a world trade slowdown, with cascading effects through the global economy.” Professor Mody, now at Princeton University, called it a grave policy error to declare ‘mission accomplished’ and cut off stimulus when it has failed to meet its inflation target and while growth is crumbling.  . . . Italy has one foot in recession. It faces an incipient credit crunch. Germany contracted in the third quarter. The Sentix index of business expectations for the eurozone has fallen to minus 18.8, the lowest since the EMU banking crisis in 2012.  . . . Gilles Moec, from Bank of America, said his tracking model shows that growth has stalled to an annual rate of 0.55 and that core inflation is trapped in a range of 0.7% to 1.1%. “We believe the ECB is well aware of this, and its repeated messages of optimism have more to do with the political need to do away with QE than with its actual assessment of the current situation.” This is a polite way of saying that the ECB has hit a host of political constraints and is being forced to abandon stimulus too early. Bank of America suggested that the ECB is knowingly issuing inflated growth estimates in order to justify its actions. Some might deem this an astonishing situation.
Hey ho . . . For amusement . . . 

  • Of course it's credible . . . Trump says he's considering his son-in-law, Jared Kushner, as his next Chief of Staff.
  • Word of the Day: Jaleo.
© [David] Colin Davies

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