Spanish life is not always likeable but it is compellingly loveable.
Christopher Howse: A Pilgrim in Spain
Note: Some of today's items come courtesy of Business Over Tapas.
Spain
- The Economy: I regularly highlight the difference between the macro and micro situations. See the interesting article below on this theme: Will Spain’s working poor take revenge?
- Politics: El Pais on the rise of right-wing rhetoric.
- Corruption: For reasons possibly connected to its own history, the PSOE has scrapped the parliamentary inquiry into the monumental corruption of the last PP administration.
- Cataluña: The estimable Matthew Bennett has some harsh words for the independistas here. I should add that, as I recall, MB - like me and others - was none too impressed by Madrid's handling of the crisis.
- Driving around Madrid: BoT: The 'concept SEAT Mínimo' is a cute electric two-seater solution which will no doubt be ubiquitous in a few years from now. Citröen have an odd new electric transporter too, the 'Ami One Concept'. Both of these are planned as ‘car-share’ where one buys credit on a card and then books the vehicle for single-time use.
- Brexit: More on the fight for rights for Brits here. And news on continuing free healthcare here.
- Strange doings in Galicia: We've had an ambulance drivers' strike for a few weeks now. During which not only have seat belts been cut, tyres slashed and ambulances 'painted' but vehicles have been set alight. It takes all sorts.
- Strange doings in Madrid: A judge has suspended the movement of Franco's remains from his ugly vast mausoleum in the Valley of the Fallen to somewhere else in the capital city. Need I add that the magistrate comes from a family with a Francoist history?
- There will be a final(?) 'meaningful' vote on Mrs May's deal in the British parliament on March 12th. Not many believe it with be approved, meaning that she'd then have to seek a delay in the implementation of Article 50. But one commentator, at least, believes there's grounds for a more positive view: May could claim unlikely triumph on March 12: The Brexit nightmare has lasted so long it’s easy to miss the signs that Conservative MPs are edging their way towards ending it. . . If the attorney-general can squeeze a concession out of Brussels and call it a codicil, then the deal is done. . . It is no surprise, of course, that change is happening tight against the wire. It is in the nature of negotiations that they crystallise late. . . Something finally happened and all of it points towards the deal. There are 3 converging reasons to think that success is the most likely of all the unlikely outcomes: 1. the collapse of Labour; 2. the tribalism of the Tories; and 3. the late arrival of naked fear into the Brexit project. . . Success for Mrs May is by no means guaranteed. Yet a decent outside bet is that Britain does indeed leave the EU on March 29, as scheduled. . . I am not saying that it will definitely happen; I just won’t be surprised if it does. Vamos a ver.
- Some decent argumentation from a Brexiteer in the second article below.
- More on the imbecilic Ms Crokin.
- Word of the Day: Lamentar.
- Odd Old Phrase: Tatony Pig: The smallest pig of a litter [the runt], which allegedly follows its owner everywhere. Derived from 'St Anthony'. Who was fond of piglets, they say.
- I didn't know that bull-baiting and bull-running were only made illegal in the UK in the 1820s and the 1830s, respectively. Could be a while yet in Spain.
Will Spain’s working poor take revenge? Peter Franklin
The G20 is an increasingly important forum of nations (well, 19 nations plus the EU). Its membership, though, is controversial. To make room for countries from different parts of the world, countries in well-represented regions have been excluded. The most glaring example is Spain. By any reasonable measure, the Spanish economy easily makes the global top twenty. But because western Europe is rich in medium-sized powers – with four in the G20 – it was thought that adding a fifth to the list (at the expense of, say, Argentina or South Africa) would result in a regional imbalance. And so Spain is fobbed off with “permanent guest invitee” status.
That’s the Spanish story more generally: it’s a country that doesn’t get the global attention it deserves. Never mind the size of its economy, just look at the influence its culture and language has in shaping the modern world. But even when the media’s attention is on Europe alone, it’s as if the continent stops at the Pyrenees.
Of course, if the news is about the fraught relationship between the richer northern and poorer southern members of the Eurozone, Spain (and Portugal) may get a mention, but the focus tends to be on the latest Italian drama or Greek tragedy. But perhaps that goes to show that ‘no news is good news’ – because as Clara Wright reminds us in an AFP report (via The Local), there is some good news about the Spanish economy: “Spain’s economy shrank during the financial crisis from 2009 to 2013 but rebounded in 2014. Its rate of expansion has since outstripped much of the EU with growth of more than 3%” Furthermore, “Spain’s jobless rate is down from a peak of nearly 27% in 2013 to 14.5% in September”.
The Spanish recovery is an under-reported story; and perhaps that’s because it doesn’t fit the standard narratives. It contradicts the idea of southern Europe as an economic disaster zone in need of firm guidance from Frankfurt. It also appears to contradict the Eurosceptic narrative. If membership of a single currency is such a straitjacket (one tied to the primary benefit of the Germans) then how have the Spanish pulled off such a notable turnaround? Indeed, how have they managed to show those self-righteous northern Europeans a thing or too about growth?
Unfortunately, this is where good news gives way to bad: “The country has the European Union’s highest proportion of workers at risk of poverty, 13.1%, after Greece and Romania, according to 2016 Eurostat figures… “…salaries did not recover when the economy returned to growth because unemployment has remained high… “Real wages actually declined in the last two years, the OECD said in a report published in July.”
Poverty pay isn’t the only way in which Spanish workers are disadvantaged: “Spain is more reliant on temporary contracts than any other EU nation. More than one in four workers, 26.9%, was employed on a temporary contract in the second quarter, according to Eurostat.” There’s a name for this kind of thing: internal devaluation. When a country suffers a severe economic shock as Spain did during the Eurozone crisis – and it can’t devalue its currency in response because it no longer controls that currency – then it has to find other ways of staying afloat. One of the easiest, but unfairest, approaches is to squeeze workers. At a time of high unemployment and cuts to social security, people can’t afford to turn down work – no matter how poor the wages or insecure the contract.
Of course, it’s not as if the external devaluation resulting from exchange rate adjustment is cost free. When the value of a country’s currency sinks, its exports get cheaper and imports more expensive, driving up prices at home. However, while everyone experiences the pain of inflation, an attack on wages and work security falls heaviest on the least protected workers – such as the young and low-skilled.
It should also be said that upward pressure on prices tends to help people in debt by inflating away the real value of the sums they owe. Putting pressure on wages, on the other hand, only reduces people’s ability to repay their debts.
For all these reasons, Spain’s economic success story is not quite what it seems. The shine has also come off the political success story. For many years Spain was unique among the big EU countries in having no significant party of the radical Right.
Though politics-as-usual was disrupted, but by new parties on the Left (Podemos) and in the centre (Ciudadanos), not to mention the separatist movement in Catalonia. However, in the last year or so, the national populist party Vox has emerged from nowhere to become a major force in Spanish politics. It’s set to win dozens of seats in the forthcoming general election. Last year, it also pulled off a major upset by helping dislodge the ruling socialists in their Andalusian heartland.
The rise of Vox has been explained as a nationalist reaction against Catalan separatism. However, political discontent and volatility are also the result of economic factors.
It is one thing to have ordinary working people suffer through a recession, but if they’re still suffering through a supposed recovery, that’s when the establishment should really watch out.
2. If MPs don’t deliver a WTO Brexit, they’ll be allowing Brussels to subvert our economy: Sheila Lawlor
The UK is on course to leave the European Union in one of two ways.
Either there will be ‘no deal’, the default option for Brexit day: but far from ‘crashing out’, the UK can trade smoothly in the interim under international law and WTO terms, and be free for the future to strike Free Trade Agreements globally and with the EU, follow its economic star, chart new paths across the world and weather the squalls on the way.
Alternatively, the UK will leave under Mrs May’s deal by being locked into an EU customs union (in all but name), with Britain’s economy bound to EU laws, tariffs and regulations. For even if Brussels agrees to an end date for the backstop, the UK will be obliged to mirror its terms for a permanent deal.
Make no mistake: a customs union, whatever the name, has been the EU goal from the start. It is the thickest and reddest of EU lines, because on it the Franco-German axis, its founding aims and its future depends. Their joint project, conceived and led by the French to contain German industrial and economic power, gave France security, Germany respectability, and brought economic gain to each. Today this big, interventionist, all-embracing state run from Brussels on French dirigiste lines is poised to subvert Britain’s economy. It will do so through the fair means or foul, deployed ruthlessly in pursuing its own interests.
Over the years, France and Germany moved on from coal and steel to back the winners that now dominate at home and abroad. Carving out a centralised economy, one walled in by tariffs, regulations and EU law, oiled by public support (up front or behind the scenes), the industries that lead the EU’s most powerful sectors, singly or conjoined, emerged. Promoted by chief executives whose minions often bribed their way into global order books, their fight to command markets in the EU and UK has been unceasing, their drive to eliminate competitors through fair means or foul, relentless – Airbus, Siemens, Alstom, Mercedes-Benz, Volkswagen.
Airbus, the aviation giant, sums up the Franco-German ‘project’. Its two dominant shareholders, the French and German states, directly or indirectly each own around 11% of the shares; the remaining proportions are non-state, except for the Spanish government which owns 4%. Airbus is headquartered in Toulouse, run by a German CEO (the next will be French), with main EU production centres in Germany, France and Spain (the others are in China and the US). Known via the UK airwaves through its campaign of scaremongering and threats against Brexit, its international reputation has been mired by bribery investigations in the US, France and the UK – the ‘bribes for business’ allegations follow an earlier finding (in 2010-11) that it breached government subsidy rules.
Airbus was the result of a Franco-German marriage between France’s Aerospatiale and Germany’s Daimler Benz in the 1970s, a union that may now be replicated by one for their respective locomotive flagships, France’s Alstom and Germany’s Siemens: their proposed merger, though blocked by the competition Commissioner earlier this month, looks set to return, despite the warning that it could lead to ‘higher prices, less choice and innovation’. Paris and Berlin, through their economy ministers Bruno Le Maire and Peter Altmaier, quick to respond, contended the rules should be changed. Given the nature of the EU project, they probably will be.
For such industries and their governments, Brexit is an anathema, threatening their profits, their captive UK market and their use of relatively cheap but skilled British labour – all of which can give them the edge over foreign and potential UK rivals in the battle for UK market share for aircraft, trains and cars. They will keep up the fight to protect such interests in the way they know best, by taxing, regulating and controlling their competitors, by fashioning (or breaking) the rules to their own benefit.
This way of doing business does not suit Britain. This island race, as Churchill put it, made its own way in the world, through a political system that protects freedom and a free economy based on market competition and entrepreneurship, both protected by the common law. The sense that people can pursue an idea or a hunch, can ‘give it a go’ and make it work, breaking into new markets at home and the world over, remains strong. The sense that they can rise to the heights is secured by the knowledge that they are free to excel, and that freedom is guaranteed by the law – one independent of politics, respected and which operates from Singapore to New York.
MPs now agree that Britain cannot sign up to an indefinite customs union under the backstop with no exit clause. But they should beware that the same plan will return as the backstop would be replaced by more of the same to kick in at a later date. It therefore falls to a Conservative Prime Minister to recognise the truths for which her party has stood surety, and reject the backdoor customs union, now or in the future. Britain’s voters, invariably wiser than their rulers, saw that the EU’s corrupting system not only thwarted democratic freedoms, but held them, their aspirations and their country’s economy back.
MPs and ministers should now give way to their electorate and do their duty by the country to honour the promise made under Britain’s unique democratic system, to leave – ‘just leave’ – and go for WTO trade, and not a deal that would give far less freedom than current membership. They should remember it is not the politicians but the people who have made this country work. The people have brought this country to its triumphs, to being the fifth richest world economy, by believing in their ideas, their enterprises, their hunches, seeing through their plans, from the laboratories of their minds to the order books of the world. Unlike their rulers, they believe in themselves. But more important, they believe in their country.
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