Friday, January 03, 2020

Thoughts from Pontevedra, Galicia, Spain: 3.1.20

Spanish life is not always likeable but it is compellingly loveable.
            Christopher Howse: A Pilgrim in Spain
Spanish Life
  • Just before I had my first go at eating 12 grapes in time with the 12 clock strikes at midnight on the 31st, I noticed that one of the TV shows was being co-hosted by Anne Igartiburu. If memory serves me well - and I'm not sure it does - in the early 2000s she used to co-host a show every Saturday night, called Corazón. If so, she was around 30 then and is around 50 now. Not that you could tell. For she's just as pretty and even slimmer. A miracle cream?
  • BTW . . . I read that the show, for some reason, became Corazon, Corazon. Which reminded me that, when I was first here, I concluded that it was legally compulsory to include this word - which means 'heart' - in every song played in Spain.
Galician Life 
  • Shrinking: The Galician interior. More than a third of Galicia's councils have lost more than 50% of their population since 1981.
  • Growing: The Portuguese camino. There were around 5,000 'pilgrims' on this in 2009. Since when the numbers have been:-
- 2015 43.1k 
- 2018 81.7k
- 2019 96.0k  
  • This camino now sees 26% of the annual total of 'pilgrims' to Santiago, reflecting the very crowded nature of the French Way. Ironically, one of the main spurs to this growth has been the availability of cheap flights to Oporto's much enlarged airport. As I've said several times, Galicia's 'localist' politicians have consummately failed to amalgamate Galicia's 3 small international airports into one effective competitor.
  • Similarly, rail travel down to Oporto and its airport has been neglected by the governments of both countries, meaning that you can almost bike there faster. Not surprisingly, we'll shortly have 5 private bus companies competing for passengers between Portuguese and Galician cities.
  • Thank god that the first child born in Pontevedra province in 2020 was given a Gallego name Xabi (Javi/Javier). We're all nationalists now. BTW . . . He was born in my barrio of Poio. 
  • The first baby born in Galicia entered the world in O Barco de Valdeorras in Ourense province. And was also given a Galicia name, Iago. As in Santiago. Or Saint James. 
  • I was less than surprised to see that both newborns - in accordance with Spanish custom - had had a woolly bobble hat plonked on their heads. 
  • This is the corner of Gran Vía de Montero Ríos with Rua Marqués de Riestra in Pontevedra, then and now. What's really interesting is the construction taking place in the former, adding a 3rd floor to the corner house. Something we've seen in all previous fotos of old and new fotos. On the left edge is the Town Hall, built in Portuguese style:- 

A hundred years or so ago, the building on the right had only 2 floors and an attic, but now has 5. In the old foto, note the 2 women with parasols on the the left hand balcony of the house on the corner, where there is now a galeria. With a twin to the right.

  • Not many people know this . . . Ideal time zones are based on the mean solar time of a particular meridian located in the middle of that zone with boundaries located 7.5 degrees east and west of the meridian. In practice, zone boundaries are often drawn much farther to the west with often irregular boundaries, and some locations base their time on meridians located far to the east. For example, even though the Prime Meridian (0°) passes through Spain and France, they use the mean solar time of 15 degrees east (Central European Time) rather than 0 degrees (GMT). France previously used GMT, but was switched to CET during the German occupation during World War II and did not switch back after the war. Similarly, prior to World War II, the Netherlands observed "Amsterdam Time", which was 20 minutes ahead of GMT. They were obliged to follow German time during the war, and kept it thereafter. 
The UK and Brexit
  • There are 5 known unknowns for Brexit in 2020, say the author of the article below.
  • Word of the Day:  Un váter. A toilet. Cistern.
Finally . . . 
  • In a section on rape in his book The Better Angels of Out Nature, Stephen Pinker points out that: In no society are women and in-laws obsessed with the virginity of grooms. In sharp contrast . . .

The five ‘known unknowns’ for Brexit in 2020: Peter Foster, Europe Editor, The Telegraph

Tanned and relaxed after a week in Mustique, Boris Johnson returns to the office this week as the most powerful Tory prime minister since Margaret Thatcher.

With Labour’s electoral coalition fractured perhaps beyond repair, Mr Johnson will believe he now has a decade at his disposal to reboot Britain - a job that begins with his renegotiation of the UK’s relationship with the European Union.

The outcome of this negotiation, the first phase of which is currently set to be completed by Dec 31 2020, will lay the political and economic foundations for what comes next, and yet it is still remarkably unclear how Mr Johnson intends to handle the process.

If he gets Brexit wrong, it could prove a permanent drag on his new administration. Conversely, a successful negotiation (the definition of which depends where you stand on Brexit) may yet provide a springboard to a better future.

So as we look to the year ahead, here are five big ‘known unknowns’ about what happens next.

1. Will Boris listen to business?

It was Mr Johnson who memorably exclaimed “f--- business” when, as foreign secretary, he was asked at a diplomatic reception about why greater consideration was not being given to the negative impacts of Brexit for British business.

That was June 2018 and the context of the remarks is important - Mr Johnson was then in the process of fighting against Theresa May’s slide towards a much softer Brexit, high-alignment approach set out in the Chequers deal.

Mr Johnson was expressing deep frustration at the apparent drift towards the EU’s single market for goods, frustration that only a few weeks later would trigger his resignation from the Cabinet.

Now Prime Minister, Mr Johnson will have to decide whether to put his money where his mouth is - or was. Clarifying those remarks, his aides said he was actually attacking the big business lobby groups, like the Confederation of British Industry, that have been warning about the perils of Brexit for jobs and investment.

The first big unknown of Brexit 2020 is therefore whether Mr Johnson will stick to that position as industry groups spell out the costs of doing a ‘hard’ Brexit that yanks the UK out of the EU single market after nearly 30 years of deepening economic integration.

Emotionally and ideologically, Mr Johnson is deeply attached to ‘freeing’ Britain from the EU’s all-encompassing regulatory orbit, to create a nimbler, smarter, more productive ‘Global Britain’ - and yet staying true to this idea will require him to defy the laws of gravity in trade.

He must do so against a growing chorus of warnings about the costs of electing for the UK to trade with the EU (which takes 43 per cent of UK exports) on the same terms as Canada, which sends just 8 per cent of its exports to the EU.

Boris Johnson speaking at the CBI annual conference in London in November  Credit:Bloomberg

The UK’s car makers, for example, are demanding “frictionless trade, free of tariffs, with regulatory alignment and continued access to talent” and warning that exiting without a deal in 2020 would cut output from British car plants by a third by 2024.

And yet the current signals from Whitehall and Westminster point to a much harder, more divergent deal, with a tough immigration regime and - if necessary - accepting the need to pay tariffs to access the EU marketplace.

Even a ‘zero tariff, zero quota’ trade deal would impose huge burdens on business, unless it is accompanied by alignment on areas such as agricultural standards.

The Food and Drink Federation, which represents UK an industry with exports to the EU worth £13.5 billion a year, has repeatedly warned of a ‘hidden hard Brexit’ imposed by a basic EU-UK trade deal, as producers face new regulatory and bureaucratic hurdles to send goods to market.

Similar warnings have come from major companies like Airbus and other exposed industries, particularly chemicals and pharmaceuticals - none of which is to mention the impact on service providers (insurance, pensions, transport, financial etc) which by some estimates will fall by £20billion a year under an EU-UK Free Trade Agreement.

Business groups privately say the  early signals from government on consultations are not encouraging:  time is short and Mr Johnson’s first act was to strip any mandatory Parliamentary consultation process out of the Withdrawal Agreement Bill that was re-tabled before Christmas.

How much Mr Johnson listens to these warnings and lobbies will be critical to the shape of any deal - and the future of Britain.

2. Will the B-word be banished to the business pages?

The second major uncertainty is whether, politically speaking, Mr Johnson can ‘Get Brexit Done’ in the sense of shifting it away from the top of the news agenda.

For the last three years Brexit has paralysed politics, but the hope of the new Johnson government is that after ‘Exit Day’ on Jan 31 the country will move on, creating space to focus on other issues, like NHS funding, schools and the care crisis.

To this end, it is reported that Number 10 wants to ban officials from even using the word ‘Brexit’ in a bid to turn the UK’s EU exit talks into a technical process taking place in the background of daily life rather than a cliff-edge that leaves the country constantly quailing.

After all, the election slogan was ‘Get Brexit Done’, with the heavy emphasis on the act of completing Brexit, not on the substance of what Brexit might actually mean, or deliver for people.

This points to an interesting political challenge for Mr Johnson. Until now, the act of ‘Getting Brexit Done’ - or effectively winning the guerrilla war over ‘leave v remain’ which continued after the 2016 referendum - was a political end in itself.

But in triumphantly completing that task, by signing a deal with the EU and winning December’s general election and ratifying an exit treaty by Jan  31, Mr Johnson opens the door to a new question ‘what is the next deliverable’?

Is it more fish for British fishermen after we leave the Common Fisheries Policy? Is it more certainty for business? Is it healing constitutional divisions? Or more prosperity for the English regions or the North and the Midlands who voted so decisively for Mr Johnson? Because the Brexit negotiation currently envisaged - an 11-month dash for a ‘barebones’ trade deal - is likely to push Brexit to the fore of politics, not into the background of the business pages.

For now it is difficult to rationalise the two approaches - getting Brexit down at faster-than-necessary speeds, while simultaneously hoping no one much notices the impacts.

3. How will the Northern Irish ‘frontstop’ work?

Mr Johnson’s headlong dash for a Brexit deal in just 10 days last October, and the political drama surrounding whether it would find a majority in Westminster, largely obscured the nature of the deal that was struck in Brussels.

Put bluntly, a Conservative and Unionist prime minister has consigned a part of the Union (Northern Ireland) to a special status in Europe without the consent of the province’s leading Unionist political party.

The Democratic Unionist Party has called the deal “absurd” and “unconstitutional” and Northern Ireland’s police chief has warned of the risk of Loyalist disorder if the deal, which puts a trade border in the Irish Sea, is seen to negatively impact Northern Ireland.

Mr Johnson may calculate that - as his election victory arguably demonstrated - the British electorate has little care or interest in Northern Ireland and that any troubles resulting from implementing the deal can be smoothed over.

But the UK Treasury’s own leaked internal assessments warn that the new border, with its customs declarations and physical and documentary checks, will be “highly disruptive to the NI economy”.

Goods travelling from Great Britain into Northern Ireland will be separated into ‘red’ and ‘green’ channels, with those heading into the Republic of Ireland, or ‘at risk’ of doing so, requiring costly additional formalities.

Mr Johnson has promised “no checks” for goods travelling from Northern Ireland into Great Britain, but business groups still fret that the new status of the province will gradually undermine business relations with the GB-based clients.

The precise extent and nature of the border remains subject to negotiation, but depending on the shape and progress of those talks, Northern Ireland’s divisions may yet again cloud the new Brexit horizons.

4. Will the UK really dare to diverge?

The answers to the first three questions posed above ultimately depend on the extent to which Mr Johnson decides to diverge from the EU’s regulatory and trading orbit.

The extent to which the UK diverges - up to and including exiting the EU with no preferential trade deal in place and falling back onto WTO trading terms - will determine how far Brexit stays off the front pages, the operation of the Irish ‘frontstop’ and the wider impact on business and industry.

Divergence on key areas, such as EU plant and animal health regulations, will particularly determine the level of friction at the border and the depth of any trade deals signed with other countries, particularly the United States.

More broadly, the extent to which Mr Johnson is prepared to agree to follow the EU’s rules on workers’ rights, the environment and state aid (the Government’s ability to subsidise business) will determine whether he can secure ‘zero tariff’ access to the EU’s single market.

Similarly on immigration, the extent to which the UK wants to erect barriers on the movement of people will, at root, determine how far UK services industries in particular are impacted by Brexit in the years to come.

For now, there is a lot of tough talking coming out of Whitehall and Westminster, but as the negotiation progresses and the Dec 31 deadline approaches, calculations may start to change.

In short, the Boris Johnson that wants to ‘liberate’ the UK from the EU’s regulatory orbit, and is prepared to say “f*** [big] business” to do so, will have to wrestle with the Boris Johnson that wants to “Get Brexit Done”, keep it off the front pages and maintain the stability of the Union.

The Prime Minister may choose a dual-track strategy - talking tough on issues like immigration and ambitions for global trade deals, while quietly pursuing a much closer economic relationship than this headline billing for Brexit suggests in order to create a smooth exit.

Or he may stick to his guns, and push for something much more radically divergent despite the warning from business and expert trade economists who say that the upsides from doing global trade deals will never compensate economically for erecting trade barriers with the advanced EU markets on our doorstep.

For now Mr Johnson seems brimful of determination to diverge - but he started the last negotiation with similarly tough talk, before largely conceding to EU demands on Northern Ireland.

The unknown, again, is whether that process repeats itself - or not.

5. What will the transition period look like after December 2020?

For now Mr Johnson has emphatically ruled out any extension to the transition period which was available under Article 50.

That ‘standstill’ period put a legal roof over the heads of both parties while they negotiated the future relationship, enabling the UK to effectively still be treated as an EU member state even after exit day.

Mr Johnson’s refusal to extend that status for up to two more years comes despite overtures from the EU not to be so hasty - only this week the EU’s trade Commission, Phil Hogan, suggested Mr Johnson reconsider his position, asking him to move from “stunt to substance”.

But barring a last minute change of heart (Mr Johnson has until July 1) that leaves just 11 months to clinch a deal on the EU-UK trade and security partnership.

Or more accurately, 8 months, if you allow time to agree a negotiating mandate (which means talks won’t start until March) and then to get the deal ratified in the European Parliament and Westminster.

All of which means, deal or no deal, there will (as Michel Barnier, the EU’s chief negotiator warned recently) inevitably still be plenty of issues outstanding on Jan 1 2021 when the new deal kicks in.

The big unknown is what this new ‘state of play’ will look and feel like - and this will depend on the political temperature of the talks as the deadline approaches.

The EU is clear that it cannot, legally speaking, replicate the full-fat ‘transition’ status of virtual membership enabled by Article 50, but the range of other possible outcomes remains extremely broad.

It could look like something very close to the ‘no deal’ world that was feared in October this year, with business, trade and transport suffering visible dislocation and disruptions, mitigated only by minimal unilateral actions on the EU side.

Or it could be something softer. The EU, while sticking to its own red lines, has secured its divorce deal including a £39 billion financial settlement and a solution to Northern Ireland, and will be looking to keep the UK as close as possible.

Its motivations may therefore be less defensive than in the previous negotiation. This could lead to something much more benign - with the basic framework of a trade and future association agreement in place, and a determination by both sides to use this as a scaffold on which to build as they adapt to the new trading regimes.

As time passes, deeper agreements could be forged, for example, on transport, data sharing, aviation, audio-visual services and wider services provision - all of which will be dependent on UK appetite to engage and limited by the choices outlined above.

But for all the unknowns of the coming year, one thing is crystal clear: with a majority of 86 seats the outcome - good, bad or indifferent - will ultimately reflect directly on Mr Johnson, and Mr Johnson alone.

No comments: