Thoughts from Pontevedra, Galicia, Spain: 19.3.21

 Night’s candles are burnt out, and jocund day stands tiptoe on the misty mountain tops.

Spanish life is not always likeable but it is compellingly loveable.  

- Christopher Howse: 'A Pilgrim in Spain'

As usual on Fridays, my thanks to Lenox Napier of Business Over Tapas for a couple of today's items. 

 

Covid 

Vaccination percentages of respective populations: Britain 40;  the EU 12; Spain 13. But Galicia only 8. 

Spain: I fingered Madrid the other day for raising the national infection rates. This article rather endorses this allegation. 

Cosas de España y Galiza   

Spain will be the 7th country in the world and the 4th in Europe to allow physician-assisted suicide and euthanasia for long-suffering patients of incurable diseases and people with unbearable permanent conditions. In contrast, Portugal’s Constitutional Court this week blocked proposed legislation, arguing that the bill was imprecise in identifying the circumstances under which life-ending procedures could occur.

 

Thanks to a deal between Spain and the UK, Gibraltar will cease to be the tax-haven Madrid has long accused it of being. I guess they’ll move on to Andorra next. Ha ha(Jaja)

Click here for an insight - in Spanish - on how Spaniards are different from others.

Despite protestations to the contrary, the use of plastic by supermarkets seems to have relentlessly increased over the years. So it’s good to read of this Mercadona plan.

Everyone knows of the tricks use by employers - especially in the hospitality area - to minimise salaries, social security payments and taxes. Not to mention job security. A few weeks ago the Hacienda (Tax Office) announced it was starting a campaign against abuses. I guess no one was surprised to see the number of temporary contracts suddenly decrease by 61,000 in just 2 weeks.

Centuries ago, there  used to be a kingdom of León. This encompassed what are now known as Galicia, Asturias and Cantabria, and even some of Portugal, I believe. But it was subsumed in the all-powerful Castilla - of Reconquest fame - and the modern region (or 'Autonomous Community') is Castilla y León. The Leonese would like to revert to a separate region, with Zamora and Salamanca snatched from CyL. I doubt it'll fly,

The UK

The Scottish First Minister, Nicola Sturgeon, is a very decisive person. So, it's a tad surprising that her response to being found to have committed the (resignation) offence of lying to to the Scottish parliament has been:-

Oh, I just don't know 

whether I should stay or go*

So, I'll ask my sycophantic Yes men

If I should answer Yes or No**.

* But should this be 'gang'?

** And should that be 'Nae'?

 

The UK and The EU and Covid

A Personal perspective: From the (very slow) start, the lockdowns in the West have been all about politics - the saving of national health services and the avoidance of the electoral consequences of failure to do this. Arguably, saving lives has been subordinated to this superordinate objective. And now the vaccine rollouts in the UK and the EU are bedevilled by politics. It does tend to endorse the view that you're better off having a system of government where you can kick out of power the incompetent and the corrupt. Is this a bill that the EU Commission fills, I wonder. Mrs Van de Leyden in particular. 

In the case of the EU, someone has said, it's all political because it's about the future of integration. Personally, I don't doubt this. So, of course, was the reaction to Brexit.

I said there'd be a 3rd . . . Woe 3: The vaccine fiasco will ignite a second eurozone crisis that will bring the EU to its knees. As spring unfolds, we will see plummeting confidence in eurozone economies and a panic in the bond markets that drives up borrowing costs. The full article rationalising this depressing prediction is below.

The Way of the World 

It’s clear that Covid will change the world in two profound ways. It has forced the West to confront the true nature of the Chinese Communist regime and the dangers of our ever-increasing economic dependence on it. But perhaps the bigger change is the realisation that in a crisis, borders reassert themselves. Every big country or bloc will make significant efforts to achieve self-sufficiency in medical supplies as a result of this pandemic. The first wave of globalisation, which started in the 1870s, was ended by the First World War. The latest wave, which started around the turn of the century, maybe ended by Covid.  From this article. 

Finally  . . .  

There seems to be a pattern emerging in my spam emails . .  Special elongation: White wife finds elongation secret from African tribesmen.

The question in a UK TV quiz: Which famous sitar player founded the National Orchestra of India?

The answer: Ghandi.

I know a very good joke which also ends with this name. But it's too long to write here. Plus it's about both the Northern and Southern Irish and wouldn't go down well with woke folk. Not to mention everyone Irish!

 

THE ARTICLE

The vaccine fiasco will ignite a second eurozone crisis that will bring the EU to its knees. As spring unfolds, we will see plummeting confidence in eurozone economies and a panic in the bond markets that drives up borrowing costs:  Matthew Lynn, The Telegraph

 

Angela Merkel’s panel of economic advisers have cut their growth forecast for this year as the country battles to contain a third wave of Covid-19. President Macron is locking down the Ile-de-France, the powerhouse of the French economy, as hospitals are overwhelmed with patients, while the OECD has sliced its projections for the continent.

With infections and casualties plummeting in Israel, the UK, and the United States as vaccine programmes ramp up, Covid-19 is finally coming under control everywhere – except, of course, for mainland Europe. So far that has mainly been a health catastrophe, but very soon it will turn into an economic one as well. Greece sparked the first eurozone crisis, but the vaccine debacle will ignite the second one. 

The EU was already stumbling its way from one vaccine blunder to another. It ordered too few shots, spent too little money to ensure adequate supply, put an obscure Cypriot party hack in charge of the most important government programme since World War II, and then lashed out at the companies making the vaccines in a blind panic.

Now, presumably working on the premise that once you are in a hole the only option is to keep digging, half the continent, including Germany, France and Italy, have put the Oxford-AstraZeneca jab on hold while some statistically insignificant side effects are investigated. We will find out soon enough what the cost of that is in lost lives. With infections rising, even as the spring weather arrives, and hospitals filling up again, the toll will likely be a heavy one. But very soon it will be a financial crisis as well. Here’s why. 

First, economies will remain locked down for far longer than necessary. Right now, the differences are hardly noticeable. Israel has opened up again, but few other countries have managed to do so. Over the next few weeks, however, that will start to change, and dramatically so. As the UK and the United States cruise past 60 to 70 per cent vaccination levels, shops, restaurants and gyms will be reopening. Their economies will be growing in the 7-8 per cent range compared to zero in the EU. That is a vast gulf. At the same time, trashing property rights, and arbitrarily seizing vaccine production plants, will make it virtually impossible for multi-nationals to invest in the zone.

Next, borrowing will soar. Across Europe, huge, expensive support measures will have to remain in place, potentially for months, while they are lifted elsewhere. At the same time, tax revenues will remain depressed (closed restaurants don’t generate a lot of revenue). Budget deficits of close on 10 per cent of GDP will roll on and on. That might not matter a lot for Germany, but it does for Italy and France, two of the most heavily indebted countries in the world (they rank in third and fourth place respectively measured by the total amount owed). How much debt is too much? No one really knows, until the markets suddenly decide a threshold has been reached. Once that line is crossed, however, chaos is unleashed. 

Finally, muddled vaccine roll-outs will create a political backlash. We are already seeing that in Germany. Angela Merkel was always the world’s most over-rated leader, but her chronic caution, indecision and dithering, along with her personal responsibility for putting her inept "mini-mutti", Ursula von der Leyen, at the top of the EU, will bring her long reign to an ignominious close, as well as potentially handing power to the first Green leader of a major economy (although, in consolation, Robert Habeck is probably more of a "conservative" than the CDU leader ever was).

President Macron is facing a tight presidential contest next year, amid a deepening crisis, while across the border in Italy it is hard to see the point of having an unelected technocrat as Prime Minister – the former ECB President Mario Draghi – if he can’t get shots into people’s arms. In truth, the eurozone is about to enter a period of fraught political uncertainty at the very worst time.  

The net result? As the spring unfolds, we will witness plummeting confidence in eurozone economies, and a panic in the bond markets that drives up borrowing costs. Global investors have not started to price that in yet. But as the evidence becomes unavoidable, and as the gulf in performance widens, that will change.

It was the Greek crisis that sparked the first eurozone crisis in 2010 as a decade of incompetence and spiralling debt brought the single currency to the edge of collapse. It is now surely inevitable that the "vaccine crisis" will trigger the next act in that unresolved drama.