Spanish life is not always likeable but it is compellingly loveable.
Christopher Howse: A Pilgrim in Spain
Note: One or two of the items below have been borrowed from Lenox Napier's Business Over Tapas of yesterday.
Spanish politics
- Catalan trouble is brewing. But, then, it always is.
- More on a book I cited recently, set in the Franco era.
- I could swear I cited a report the other week that Spaniards were less happy than almost any other folk in the EU. But here's a study which says the opposite. Take your pick.
- This is a surprise/shock to me, as I'm always telling visitors that, though the level of politico-commercial corruption here is truly vast, you're never asked to bribe anyone in daily life . . . Lenox advises that: As any foreigner knows, paperwork can take time here. So much so that an underground network can help move those appointments and papers forward in exchange for a bit of cash. These 'conseguidores', says El País, will be glad to lend a hand for €150 in Madrid, or twice that in Barcelona. And reader Barry adds: In Alicante I'm told for €500 you can obtain an appointment almost immediately. I guess the truth is that it remains true that you're never actually asked to bribe a civil servant but you can opt for getting someone else to do this for you. Taking a margin on the transaction. It's probably cheaper in, say, Italy and Greece.
- Some reassuring[??] words for Brits resident in Spain from Mr Raab
- This is something being circulated in my barrio, and is self-explanatory. It's been translated by Mr Google and tweaked by me:-
All strength to their elbows, especially if this results in the end to the concomitant plague of begging addicts in the city's old quarter.
The UK
- Entering the Crown Courts building in Liverpool yesterday - en route to the Probate Registry - I had to pass 4-5 security personnel. One of them looked at my little Asturian penknife and told me he'd have to relieve me of it:-
Him: No. You'll have to write to the court about it.
Me: That won't work. I live in Spain. So, I'll take it back to my car.
Him: Well, technically I'm not supposed to let you have it back, but OK.
Me: Much appreciated. See you in 10 minutes.
Germans living in 'cloud cuckoo-land' as economic decline sets in. Ambrose Evans Pritchard, Daily Telegraph.
It might surprise some Britons that Germany has been one of the world's slowest growing economies over the last twenty years
Britain risks relegation from the advanced league of global economic powers within a decade if it is not careful, but less obviously so does Germany.
The close siblings have opposite flaws. While the British are gambling wildly on political and economic upheaval - full of dangers, yet also breath-takingly bold - the German people are doubling down on ideological certainties, a 20th Century pre-digital model, and the status quo.
There is a whiff of the Brezhnev era about the long cautious reign of Angela Merkel. Some Germans are vaguely aware that Deutschland Inc is no longer entirely fit for purpose but there is no sense of urgency.
“We’re living in cloud-cuckoo land. We think we are the superstars and that other Europeans should follow our example,” said Marcel Fratzscher, president of the German Institute for Economic Research in Berlin (DIW) and author of The Germany Illusion. “If you compare us with southern Europe or Italy we look fantastic. Compared to the Nordics we don’t look so good at all,” he said.
It might surprise some Britons - rightly impressed by Germany’s superb manufacturing exporters, but less exposed to the protected, archaic, over-regulated service sector - that Germany has been one of the world's slowest growing economies over the last twenty years. East Asia, the Anglosphere, and Scandinavia have done better. Much-mocked Japan has done better.
The Bundesbank says Germany’s trend growth rate is heading for 0.75% by 2021 if productivity continues to stagnate. OECD data shows German labour productivity growth has averaged 1.2% since 1995 (it was zero last year.) This compares to France (1.2% ), the UK (1.3% , Australia (1.5% ), the US (1.7% ), and Korea (3.9% ). Has the euro really done any favours for Germany, or has it been a trap?
Die Welt's Olaf Gersemann warned as far back as 2014 in The Germany Bubble: the Last Hurrah of a Great Economic Nation that his countrymen had mistaken a confluence of particular events for a second Wirtschaftswunder. Germany was briefly able to ride the ‘China wave’, becoming the supplier-in-chief of machine tools and capital goods for the industrialisation of Asia.
That Chinese catch-up phase is over. Worse yet, the Lehrer has outgrown the Meister. “China is increasingly exporting products that coincide with Germany's top export categories,” says the German Council of Experts. The annihilation of Germany’s solar champions by Chinese upstarts -with stolen technology and export subsidies - shows how fast the tables can turn.
Trade dependency on China has become Germany’s Achilles Heel. The Council said a permanent 10% decline in exports to China would cut German GDP by 4.8% within a four-year period. This damage is already becoming visible. Germany has been in recessionary conditions on and off since early 2018. Each time the Chinese stimulus stimulus cycle fades - and the impulse is becoming progressively weaker - the German economy wilts.
Ashoka Mody, the International Monetary Fund’s ex-deputy director in Europe, said no country has come to rely so heavily on Chinese perma-growth. The country is now suffering a systemic shock as a consequence. "It is almost a heart attack,” he said.
“Korea has diversified into the electronics, which Germany has not done. The Germans pride themselves on engineering excellence and they have been wizards at it since the late 19th Century. But that technology is becoming obsolete,” he said.
“We are on the cusp of a fundamental change in the way the world produces and distributes things and I don’t think German society recognises how deep the problem is.”
Yet much of this structural decline is home-grown. Prof Fratzscher says public investment has been negative almost every year since the early 2000s and is still negative. It is why the Kiel Canal - the Baltic shortcut - has had to be closed repeatedly over recent years. The old locks are crumbling.
Most investment is carried out by the Lander and municipalities. Many are broke, including the 18m-strong Nordrhein-Westfalen. “They are over indebted and close to default. It has caused a huge decline in the quality of infrastructure,” he said.
It is one reason why fibre-optic cable coverage across the country is less than 5pc, but it is not the only one. Deutsche Telekom took the monopolist's cheap route of upgrading or ‘vectoring’ existing copper lines. No surprise that Germany has been an absent player in the digital revolution, SAP excepted.
Why was public investment slashed to the bone when Germany could borrow at steeply negative real rates for 10, 20, or even 50 years? Because the policy establishment thought it had to salt away money to meet the coming old-age crisis, but also because it fetishised a balanced budget for its own sake: hence the infamous ‘black zero’, and the constitutional debt-brake. The zero-sum economics of the Schwabian Hausfrau has prevailed.
This structural corrosion has been masked by monetary union. “Life can get very comfortable when you have a massively undervalued currency,” said Charles Dumas from TS Lombard.
The EMU debt crisis gave Germany and the creditor states the whip hand over the debtor bloc. The saga became a false morality play of saints and sinners. This distorted perceptions. It also “went to Germany’s head”, says Olaf Gersemann.
The dark side of Germany's export miracle is little understood abroad. It relies on a tax, energy, and regulatory structure that favours the exporting elites at the cost of the bottom half. The pre-Merkel Hartz IV policies of wage compression caused real pay to drop back to the levels of the late 1990s.
The legacy is a lumpen-proletariat of 7.8m people on “mini-jobs”, part-time work up to €450 a month. Companies love it because of tax concessions. This underemployment flatters the jobless rate. It has left Germany more unequal than at any time in its modern history. Prof Fratzscher the percentage in poverty has risen from 12pc to 17pc since 2005. Two fifths of Germans have no net wealth.
What is remarkable is that the political Left has made such little headway protesting this pauperisation. German workers have mysteriously accepted the mercantilist belief-system against their own interests. One day the spell will break.
Nowhere is Germany's predicament more obvious than in cars. German industry misread the Tesla threat and clung to the combustion engine for too long. “Our manufacturing companies are a victim of their own success. They became lazy and arrogant. They are trying to catch up again but can they transform themselves quickly enough?” said prof Fratzscher.
Electric vehicles are computers on wheels. The advantage switches to California. Or equally you might say they are batteries on wheels, and the advantage switches to Asian companies like Korea’s LG Chem and Samsung SDI, or China’s CATL, which have locked up lithium supply. These rivals now produce the power packs for VW and BMW and capture much of the value added.
Daimler’s Dieter Zetsche says the profit margin on an EV is half that of fossil car. Will Germany’s great auto industry support an army of 870,000 workers and an economic ecosystem of millions in ten years time?
The euro years have been a lost era for Germany. The chance was missed to future-proof the country by investing in the next wave of technology before its turns old. It drifted off too long and now its demographic dividend is reversing with a vengeance.
The Bundesbank says the workforce will shrink by 200,000 a year from now on even under any plausible scenario of immigration. The old-age dependency ratio will rise from 26.5pc to 39.3pc by 2025, before spiraling above 50pc by mid-century.
There is much ruin in a great nation, and Germany has shown an extraordinary ability to reinvent itself before. But first it may need to shed some illusions. Much like Britain.
- I had lunch with my sister and brother--in-law in a new place in Liverpool's Hope Street. The one with a cathedral at each end. It's a sort of international tapas restaurant and all the dishes were excellent, and reasonably priced. But the drinks! Thirty euros for a bottle of Albariño that you can get for 9 euros in Spain and, would you believe, 8 quid in a UK supermarket. When I was young, the wine mark-up was 100% but it now appears to be close to 250%. And the desserts! Somehow the basic price of of 36 quid for 3 Specials mounted inexorably to 96 quid by the time we left. Or 106 with (obligatory) tip . . .
- The excellent waiter, Fran, was from Segovia and his partner from Poland. Neither of them, he claimed, was over-concerned about the impact of Brexit. He greeted us with a joke, in English. I told him, in Spanish, it wasn't very funny. How we laughed . . .
- The Germans are living in cloud cuckoo-land, says Ambrose Evans Pritchard in the article below.
- More Christian gullibility
- And a bit more from a truly professional shyster. As I've said, it's a hard to know why this isn't illegal. If only as the tort of fraudulent misrepresentation.
Spanish
- Word of the Day: Guagua
- Arriving in Liverpool late morning, I was taken by my satnav(GPS) past the street where I knew the Probate Registry was and then deposited in a roofed cul-de-sac outside the steel gates of the police cells below the city's courts. Another impressive performance from the thing, though I guess Google Maps' excuse would be that the Registry is in a pedestrianised area and this is the closest you can get to the building by car. Anyway, I then spent 15-20 minutes negotiating the interstices of Liverpool One shopping zone, ending up on a building site, before getting back to the street which I'd wanted to enter in the first place. 15 minutes earlier.
Germans living in 'cloud cuckoo-land' as economic decline sets in. Ambrose Evans Pritchard, Daily Telegraph.
It might surprise some Britons that Germany has been one of the world's slowest growing economies over the last twenty years
Britain risks relegation from the advanced league of global economic powers within a decade if it is not careful, but less obviously so does Germany.
The close siblings have opposite flaws. While the British are gambling wildly on political and economic upheaval - full of dangers, yet also breath-takingly bold - the German people are doubling down on ideological certainties, a 20th Century pre-digital model, and the status quo.
There is a whiff of the Brezhnev era about the long cautious reign of Angela Merkel. Some Germans are vaguely aware that Deutschland Inc is no longer entirely fit for purpose but there is no sense of urgency.
“We’re living in cloud-cuckoo land. We think we are the superstars and that other Europeans should follow our example,” said Marcel Fratzscher, president of the German Institute for Economic Research in Berlin (DIW) and author of The Germany Illusion. “If you compare us with southern Europe or Italy we look fantastic. Compared to the Nordics we don’t look so good at all,” he said.
It might surprise some Britons - rightly impressed by Germany’s superb manufacturing exporters, but less exposed to the protected, archaic, over-regulated service sector - that Germany has been one of the world's slowest growing economies over the last twenty years. East Asia, the Anglosphere, and Scandinavia have done better. Much-mocked Japan has done better.
The Bundesbank says Germany’s trend growth rate is heading for 0.75% by 2021 if productivity continues to stagnate. OECD data shows German labour productivity growth has averaged 1.2% since 1995 (it was zero last year.) This compares to France (1.2% ), the UK (1.3% , Australia (1.5% ), the US (1.7% ), and Korea (3.9% ). Has the euro really done any favours for Germany, or has it been a trap?
Die Welt's Olaf Gersemann warned as far back as 2014 in The Germany Bubble: the Last Hurrah of a Great Economic Nation that his countrymen had mistaken a confluence of particular events for a second Wirtschaftswunder. Germany was briefly able to ride the ‘China wave’, becoming the supplier-in-chief of machine tools and capital goods for the industrialisation of Asia.
That Chinese catch-up phase is over. Worse yet, the Lehrer has outgrown the Meister. “China is increasingly exporting products that coincide with Germany's top export categories,” says the German Council of Experts. The annihilation of Germany’s solar champions by Chinese upstarts -with stolen technology and export subsidies - shows how fast the tables can turn.
Trade dependency on China has become Germany’s Achilles Heel. The Council said a permanent 10% decline in exports to China would cut German GDP by 4.8% within a four-year period. This damage is already becoming visible. Germany has been in recessionary conditions on and off since early 2018. Each time the Chinese stimulus stimulus cycle fades - and the impulse is becoming progressively weaker - the German economy wilts.
Ashoka Mody, the International Monetary Fund’s ex-deputy director in Europe, said no country has come to rely so heavily on Chinese perma-growth. The country is now suffering a systemic shock as a consequence. "It is almost a heart attack,” he said.
“Korea has diversified into the electronics, which Germany has not done. The Germans pride themselves on engineering excellence and they have been wizards at it since the late 19th Century. But that technology is becoming obsolete,” he said.
“We are on the cusp of a fundamental change in the way the world produces and distributes things and I don’t think German society recognises how deep the problem is.”
Yet much of this structural decline is home-grown. Prof Fratzscher says public investment has been negative almost every year since the early 2000s and is still negative. It is why the Kiel Canal - the Baltic shortcut - has had to be closed repeatedly over recent years. The old locks are crumbling.
Most investment is carried out by the Lander and municipalities. Many are broke, including the 18m-strong Nordrhein-Westfalen. “They are over indebted and close to default. It has caused a huge decline in the quality of infrastructure,” he said.
It is one reason why fibre-optic cable coverage across the country is less than 5pc, but it is not the only one. Deutsche Telekom took the monopolist's cheap route of upgrading or ‘vectoring’ existing copper lines. No surprise that Germany has been an absent player in the digital revolution, SAP excepted.
Why was public investment slashed to the bone when Germany could borrow at steeply negative real rates for 10, 20, or even 50 years? Because the policy establishment thought it had to salt away money to meet the coming old-age crisis, but also because it fetishised a balanced budget for its own sake: hence the infamous ‘black zero’, and the constitutional debt-brake. The zero-sum economics of the Schwabian Hausfrau has prevailed.
This structural corrosion has been masked by monetary union. “Life can get very comfortable when you have a massively undervalued currency,” said Charles Dumas from TS Lombard.
The EMU debt crisis gave Germany and the creditor states the whip hand over the debtor bloc. The saga became a false morality play of saints and sinners. This distorted perceptions. It also “went to Germany’s head”, says Olaf Gersemann.
The dark side of Germany's export miracle is little understood abroad. It relies on a tax, energy, and regulatory structure that favours the exporting elites at the cost of the bottom half. The pre-Merkel Hartz IV policies of wage compression caused real pay to drop back to the levels of the late 1990s.
The legacy is a lumpen-proletariat of 7.8m people on “mini-jobs”, part-time work up to €450 a month. Companies love it because of tax concessions. This underemployment flatters the jobless rate. It has left Germany more unequal than at any time in its modern history. Prof Fratzscher the percentage in poverty has risen from 12pc to 17pc since 2005. Two fifths of Germans have no net wealth.
What is remarkable is that the political Left has made such little headway protesting this pauperisation. German workers have mysteriously accepted the mercantilist belief-system against their own interests. One day the spell will break.
Nowhere is Germany's predicament more obvious than in cars. German industry misread the Tesla threat and clung to the combustion engine for too long. “Our manufacturing companies are a victim of their own success. They became lazy and arrogant. They are trying to catch up again but can they transform themselves quickly enough?” said prof Fratzscher.
Electric vehicles are computers on wheels. The advantage switches to California. Or equally you might say they are batteries on wheels, and the advantage switches to Asian companies like Korea’s LG Chem and Samsung SDI, or China’s CATL, which have locked up lithium supply. These rivals now produce the power packs for VW and BMW and capture much of the value added.
Daimler’s Dieter Zetsche says the profit margin on an EV is half that of fossil car. Will Germany’s great auto industry support an army of 870,000 workers and an economic ecosystem of millions in ten years time?
The euro years have been a lost era for Germany. The chance was missed to future-proof the country by investing in the next wave of technology before its turns old. It drifted off too long and now its demographic dividend is reversing with a vengeance.
The Bundesbank says the workforce will shrink by 200,000 a year from now on even under any plausible scenario of immigration. The old-age dependency ratio will rise from 26.5pc to 39.3pc by 2025, before spiraling above 50pc by mid-century.
There is much ruin in a great nation, and Germany has shown an extraordinary ability to reinvent itself before. But first it may need to shed some illusions. Much like Britain.
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