Spanish life is not always likeable but it is compellingly loveable.
Christopher Howse: A Pilgrim in Spain
- The run-up to the national, regional and local elections of this spring.
- A worrying prediction from El Independiente: The PSOE would win the 28-A general election while Vox would take up to 46 seats. Both PP and Unidos Podemos would lose almost half of their deputies.
- Excellent news for expats in the EU.
- Relevant news for Brits in Spain.
- Sadly unsurprising news from down South.
- A relevant update from EuroCitizens.
- Urban spots to avoid?
- Our local press has suggested that 'optimising' Galicia's 3 small international airports is a 'strategic objective'. I suspect that this is all that will happen - talk. Especially as our politicians say they won't capitulate to 'blackmail' from the airlines. Which can, of course, continue to play them off against each other until they're reduced to one large, competitive airport with negotiating clout. On the 12th of Never.
- Is there a more irritating site in the world than Renfe's? The most frequent - habitual? - problem is that it keeps telling me I haven't entered the origin and destination stations when I have. Yesterday it also first told me my password was wrong - several times - and then accepted it. Finally, having noted that my email address was wrong in my data, I eventually gave up trying to find out how to correct it.
- Richard North today: There was never a good time for a no-deal Brexit but that applies in spades when we could be on the verge of a global recession. What was already important to avoid now becomes a matter a vital national interest. But. . . In the last few weeks before we are scheduled to leave the EU, the prime minister has almost run out of opportunities to salvage a deteriorating situation and she shows no signs of being able to manage an orderly Brexit.
- This should possibly come under Nutters Corner.
- This, though, does belong here. Am I imagining a German accent for the singer of The Star-Spangled Banner? More on this here and here.¡
- Europe prepares risky counter-attack in US car war as Atlantic alliance falls apart. See below.
- Word of the Day: Conquistar
- Odd old word: A nokes: A simpleton. From A noke, an oak. [As with A norange, an orange]
- Yesterday, I had to ask the young waiter in one of my 2 regular bars what reggaeton was. Right on cue, here's what Lenox Napier of BoT, says this morning is a good example of it.
- Oops . . . A Colombian friend has just told me that isn't reggaeton but this is . . . What do I know?? Or maybe Lenox too . . . P. S. If you leave this second playing, you'll eventually get this interesting version of Elvis's Ann Marie's the Name. Possibly of more appeal to male readers.
Europe prepares risky counter-attack in US car war as Atlantic alliance falls apart: Ambrose Evans Pritchard
Germany has reacted with shock and mounting anger to threats of exorbitant car tariffs by the Trump administration, a move seen as a targeted attack on the country’s crown jewels.
In Brussels, the European Commission said it would “react in a swift and adequate manner” to any escalation by the White House after the US commerce department cleared the way for car sanctions on national security grounds.
Brussels has drawn up plans for first phase retaliation against €20bn (£18bn) of US goods, targeting regions seen as crucial to Mr Trump’s re-election but also taking direct aim at Tesla.
Leading figures in Berlin have called for proportional retaliation if President Donald Trump goes ahead with duties of up to 25%, even if this means a full-blown trade war and further damage to the disintegrating trans-Atlantic alliance. “War is war, and a trade war is a trade war,” said Norbert Röttgen, chairman of the Bundestag’s foreign affairs committee.
Chancellor Angela Merkel said it was alarming that Washington had invoked the nuclear weapon of national security under a “Section 232 clause” as a part of its trade armoury. “We’re proud of our cars and we have a right to be,” she told the Munich Security Conference over the weekend. “The biggest BMW plant is in South Carolina, not Bavaria. If these cars built in South Carolina are suddenly a threat to US national security, that is frightening,” she said.
The US commerce department delivered its long-awaited verdict to the White House on Sunday. While the findings have not been published, the broad thrust is known. The report allows the president to impose sanctions over the next 90 days on car imports worth $340bn without the assent of Congress.
This dispute has been coming for a long time. Europe is paying the price for building up a structural trade surplus with the US worth $171bn by compressing internal consumption with tight fiscal policies for much of the last decade, relying on global demand to pull the eurozone off the reefs. German imports alone accounted for $65bn of this last year. Mr Trump’s trade guru, Peter Navarro, said it is possible only because the structure of the euro keeps Germany’s exchange rate undervalued. Monetary union prevents the system returning towards balance through a German revaluation.
The trade showdown between America and Europe came as leaders of both camps clashed in open acrimony at the Munich security summit, a gathering that tore away all pretence of shared strategic interests. US vice-president Mike Pence rebuked the Europeans for free-loading on Nato, propping up the Iranian terror machine, and sacrificing Ukraine to curry favour with Russia over the Nord Stream 2 gas pipeline.
It was raw diplomacy of inter-War vintage and may mark the moment when the liberal Atlantic order became an empty term.
The EU has a powerful interest at this juncture in keeping Britain closely aligned, lest it is tempted by other strategic suitors. Former German foreign minister Sigmar Gabriel advises the EU to hug the British as tightly as possible to keep their defence, security, and finance strengths on the European side of the ledger. But Brexit negotiations have been conducted by lawyers in Brussels with little regard for the bigger picture.
Trade experts say the US report has fixed on a menu of options ranging from punitive tariffs on the hi-tech components of cars such as software, sensors, or GPS systems, as well as electric vehicles, all the way up to a sweeping 25% tariff on all car imports. William Reinsch, a former deputy commerce secretary, said the real goal is to pressure the Europeans into agreeing “voluntary” quotas along the lines of the 1980s deal forced on Japan by the Reagan Administration.
Michael Hüther from the German Economic Institute (IW) said the EU should hit back hard enough to “make it painful”. Yet tit-for-tat retaliation by the EU will enrage Mr Trump and lead to tariff escalation. The lesson of the 1930s is that surplus states suffer more in a trade war.
Conflict looks almost unstoppable. The European Parliament’s trade committee has called for a suspension of talks with the US, arguing that Mr Trump is abusing the WTO system and that Europe should not negotiate with a gun to its head. It said that agriculture must be excluded. This dooms any talks on a free-trade pact since the US Senate will not approve a one-sided deal that locks out US farm products on disputed health grounds. Little remains of the trade truce agreed last July by Mr Trump and EU commission chief Jean-Claude Juncker.
Gabriel Felbermayr from the IFO Institute said tariffs of 25% would cut German car exports to the US by half, costing €18.4bn a year.
A no-deal Brexit in these circumstances would mean a traumatic rupture in Germany’s two biggest car markets at the same time. German producers exports 750,000 cars a year to the UK, and rely on UK industrial supply chains.
The British car industry – led by Tata, Honda, and BMW – would also be hit hard by US tariffs. Sales to the US reached 221,000 last year, making up 18pc of UK car exports.
For Germany, the tariff threat comes at a time when the auto sector is reeling from the diesel scandal and is struggling to keep up with China and the US on electric cars. VW’s chief Herbert Diess says the German car industry risks being toppled from its dominant position and going the way of Coventry within 10 years if it is not careful. “Nothing is guaranteed for eternity. If you look at the former bastions of the auto industry such as Detroit, Oxford-Cowley, or Turin, you can see what happens to cities once their dominant companies and industries falter,” he said.
The EU must decide how to manage its internal rifts as it explores trade retaliation. France’s Emmanuel Macron pointedly said in a moment of pique with Germany last year that his country does not export cars in volume to the US. It was a veiled warning that Paris might not let Berlin use the EU trade process to fight its own sectoral interests, or a least there would be a political quid pro quo.
The eurozone is already close to recession. A US trade war at this point would push the economy over the edge and potentially into an “adverse feedback loop” where deflationary forces set it and trigger an unstable reaction in the debt markets. The European Central Bank has no monetary defences of any potency with rates already at minus 0.4%, and the currency has no fiscal fund able to launch counter-cycle stimulus through borrowing with a common safe asset.
If Mr Trump’s trade war combined with a no-deal Brexit, Europe would face an existential political and economic crisis.