The funeral service has been held today for the victims of last week's awful train crash in Santiago. The judicial investigation into what happened is also just underway, although for many it's already a closed case. Despite the fact that the black boxes recovered intact from the train have still not been opened, and that no serious investigation of all possible factors has yet occurred, for Spain's government and sections of the media it's a done deal. The train driver is to blame for everything.
The accusation has enthusiastic support. La Razón and ABC, competitors in the bid to be the most servile conduit for the Spanish government's message of the day, have been the worst offenders with some truly appalling reporting. It may be the case that the driver didn't do what he needed to do in the section of the route where the crash occurred, but the reasons for pointing the finger so loudly and quickly at him have little to do with a real desire to know the truth about what happened.
In what was fairly clearly a political manoeuvre, the police were ordered by the interior ministry to arrest and hold the train driver even though he was in hospital following the crash and showed no signs of going anywhere. In Spain it's the investigating magistrate who has to present any formal accusation and so it was that yesterday the driver appeared before the magistrate and, at least from what has been reported, recognised that he failed to reduce the speed of the train as he entered the curve where the fatal derailment occurred. He's facing charges of reckless manslaughter.
The media and political campaign didn't need to wait for such needless legal formalities. The driver of the train had posted a photo on Facebook some time ago of the speed display on his train showing 200km per hour. That was enough for those looking for a summary trial, the driver had obviously caused the accident because he is a reckless, boastful, boy racer. Now I've travelled many times on Alvia trains like that involved in the accident and similar ones running on high speed tracks built for the faster AVE, and they still go very fast - frequently at more than 200km per hour. So a train driver pointing out that he has hit 200km with a train like this isn't boasting about doing something that he shouldn't do.
What is really missing in such tragic circumstances is that someone from the government appears and makes clear that all necessary steps will be taken to ensure such an accident doesn't happen again. If that has happened, I haven't seen it. There hasn't even been a single press conference yet by the heads of the public companies involved, infrastructure (ADIF) or operator (RENFE). Instead the government, in what has now become almost a trademark procedure for PP administrations, looks for someone to blame and then acts as if responsibility for rail safety has nothing to do with the national government. It's that Prestige approach to crisis management all over again with that special "how dare you call me to account for what happens on my watch" arrogance.
But there's more to it than this habitual attempt to evade any political responsibility, commercial motives have also played their part in this urgent campaign to blame the driver and only the driver. Spanish companies are bidding for high speed rail projects around the world and in some cases there are conditions for bidding that include a clean safety record. So the line where the accident occurred is no longer considered to be high speed since the accident, although it was presented as such and forms part of the planned AVE line connecting Madrid and Galicia. It's true that no AVE trains run on the line at the moment, but there are services running on it capable of travelling at speeds up to 250km per hour. That's not high speed?
The regional president of Galicia, Alberto Nuñez Feijóo, who should be fully occupied with the consequences of dealing with those affected by the crash in his region instead decided to go for the idiotic 'Leyenda Negra' argument claiming that evil unnamed foreign interests are out to get Spain's successful high speed rail industry. Despite obvious differences, I'm reminded of the Paddington train crash in 1999; a product of a stupid and disastrous privatisation plan that left passenger safety at the bottom of the priorities list way behind the bonuses and fat profits that were being earned by those in charge of the rail infrastructure. It was another avoidable accident, and as in the case of Santiago there was a concerted campaign to attribute it to 'human error' rather than to deficient safety systems.
So what do I mean when I write about deficient safety systems? How about this odd situation where, of 87 kilometres of high speed line built between Ourense and Santiago, the last 7km into Santiago were left with a safety system dating from the 1960's whilst the rest were equipped with a modern state of the art system. A modern and expensive system which is not being used at the moment, for reasons which have not been explained. Yes, the 7 km with the old system includes the stretch where the crash occurred. The driver should have braked 4 kilometres before the curve, says the president of ADIF. Which sounds like more than enough time until you do the calculation and understand that a train travelling at 190km takes little over a minute to cover that distance. An up to date safety system would have stopped that train.
At first many people were also asking what such a potentially dangerous curve was doing on a high speed line, requiring a train to slow down to a maximum of 80km in a relatively short distance. It seems that this is far from being a unique case on Spain's high speed lines. Nor is it necessarily a bad solution in itself. The alternative is to either put a special AVE station well outside of Santiago city limits (Tarragona or Segovia style), to tunnel, or to bulldoze a significant part of the city to build a nice straight line for the fast train. The drive for speed above all else is a big part of the problem.
The AVE has become, in these times of crisis, an absurd trophy project that swallows huge resources at the expense of the rest of Spain's rail network. Both in terms of investment and because other train services around the country are being cut so that fares on the AVE can be discounted for expensive trains that have to run almost full to stand a chance of breaking even. This time it's prestige with a small 'p', the AVE offers tremendous inauguration and boasting possibilities for Spanish politicians from all governments since the 1990's and has become an untouchable icon of Spanish progress. So you have the bizarre way in which the new Madrid-Alicante line was introduced just before the summer, the authorities on the inaugural ride whizzed through ghost stations where a dirt road leaves the forecourt. Then those managing the line beg, borrow or steal the rolling stock from other high speed lines so that appearances can be maintained. Everything works fine until it doesn't.
The technology already existed to prevent the Santiago accident, and it has existed for quite a long time. Placing all responsibility on the driver for anything that happens on a high speed rail line isn't just unfair, it's irresponsible. It seems hard to believe that everything will just continue as before with the driver as the scapegoat. You have to hope that, at the very least, when memories of the accident fade and the commercial bids have been submitted workers will be quietly sent in to put in place the safety system that such a section of track requires. You hope, but you can't be sure that's what will happen.
Puerto Natales, one of the places where we stayed on our trip to Chile last winter, is not a big town. In the Patagonian summer it does modestly well out of tourism, mainly from those who want to walk, as we did, the nearby Torres del Paine national park. Given the way the wind blew when we visited I can't imagine wanting to spend too much time there outside of that slightly warmer season. It's certainly not the first place you would expect to find members of the growing Spanish diaspora, those for whom economic exile is becoming the only way forward. But the waiter who served us one night in the local asador was from Barcelona, and the receptionist in our hotel from Canarias.
Then, a couple of weeks ago, we were at a family wedding in Oxfordshire. Having breakfast in the hotel the morning of the wedding my partner was talking in English to the waitress for a few seconds until, in that way the Spanish have of recognising each other, the waitress started talking to her in Spanish. Two people from Cadiz working in the middle of the English countryside. Last week it was a weekend in Innsbruck, the hotel receptionist who checked us in was Catalan. So what, some people say, young Spaniards have spent periods abroad for years and there is some truth in that. London in the late 1980's and 1990's always seemed to have a large Spanish population.
But I think some things have changed. Young Spaniards are not just going overseas now to get away from home for a year and pretend to learn a foreign language. Also, many of those who are leaving are not so young. People who would possibly be thinking more in terms of a settled life and maybe starting a family are also amongst those looking for a fresh chance overseas. This is not the rural exodus of the 1950's and 1960's, many of those making the move belong to the best educated sector of Spanish society. Many of them are going for the foreseeable future.
To the lords of the rentier economy, the Botins and others, there is no problem. They've got what they want from the crisis and everything seems to be going just fine as they pick over the debris from the crash. A complacent, and utterly useless, government seeks only to manage the situation in such a way that they don't get replaced by anyone else. Job creation is a skill reserved for friends and family only. The Spanish government even sets up websites to encourage people to look for work overseas. This weeks new government euphemism in a crisis where euphemism production has never been so healthy is to describe the growing exodus as "external mobility".
The government will be happy to get rid of those voters most likely to be critical, and emigration looks like being the only factor in the next few years (barring extensive statistical manipulation) that can make any significant dent in an unemployment figure likely to reach 27% by the end of this year. So if lots of people leave it can be presented as yet another fake signal of economic recovery. Those on the receiving end are not fooled by the talk of recovery, they can look at piles of unsuccessful job applications, their friends in the same situation, and draw a sad but understandable conclusion. It's Spain's huge loss, a well prepared generation taking their skills elsewhere.
Although I usually blog about Spanish issues here, there are always exceptional cases. I was not even planning to write anything about the death of Margaret Thatcher, but the disgraceful and ideologically incoherent decision not to privatise her funeral and to turn it instead into an expensive and wasteful military jamboree has made me change my mind.
The armed forces presence in her funeral has of course been designed above all to pay homage to a military adventure only exceeded in its pointless absurdity by Aznar's dramatic capture of the goats grazing on Isla Perejil a few years back. The Falklands War was memorably described by the Argentinian writer Jorge Luis Borges as being like two bald men fighting over a comb. Nevertheless, we are still force fed a mythical account of democracy triumphing over fascist tyranny as one set of troops conscripted by unemployment overran the positions of another group of, often very young, untrained conscripts shivering in their trenches.
Except that not too long before the Falklands War the UK was training Argentinian naval officers in Portsmouth. That's right, the same navy that was running one of the most notorious torture centres of the last 50 years. Why be surprised? Anyone who was such an ardent friend and admirer of Pinochet as Thatcher was would also surely be a friend of those who tossed their victims alive from planes into the sea? Operation Condor, bringing nasty vicious murderers together throughout the 1970's and 80's. Indeed, such was Thatcher's fierce commitment to liberty that she was also one of the most determined defenders of the apartheid regime, labeling the ANC as a terrorist organisation. For a while I was becoming concerned that she would outlive Nelson Mandela, thankfully we've now been spared that sorry and unjust outcome.
Meanwhile the fans of Thatcher's economics, of which there are many, have developed an understandable aversion to hard data. Because it's not a theoretical debate, not any more, after 34 years the results are in and it doesn't look good. Average economic growth in the 30 years following her election in 1979 has been significantly poorer than in the preceding 30 years. Then there is unemployment. Here things are even worse, high unemployment has become an almost permanent feature of the UK economy since 1979. Ironic when you consider that Thatcher used it as the main issue of her first election campaign. Even more so when you take into account the numerous changes made to the unemployment count that were designed to artificially reduce the figures.
Then there is oil. Many oil producing countries have been noticeably wasteful in the use they have made of their earnings from it. But even so it's hard to think of a country that has obtained absolutely no long-term benefit at all from it. That's the UK. Stupid Norway eh, with its sovereign wealth funds trying to use oil revenues to guarantee decent pensions and to invest in the future of their economy! What would they know? Idiots. Showing the way forward, the UK under Thatcher pissed away the country's oil wealth on corporate tax breaks and the like. Not even a balance of payments surplus to show for it. Nada, cero patatero.
I think of these things when, as I did in the days immediately preceding Thatcher's death, I travel on the finest Victorian public transport system in the world. I don't know what they did to make The Tube work during the Olympics but the sellotape and chewing gum has now fallen off again and you get plenty of time to think about all sorts of issues as the tannoy announces yet another delay or line closure. Cut long term investment for short term political gain via tax cuts and nobody notices the true effects for 15-20 years. Thatcherism in a nutshell.
It's a failure, an abject failure if you analyse the data. But the dogma survives in the form of "my theory must be correct so therefore something is wrong with the economy". We see it today with the slash and burn economics practised in the name of austerity. Indeed, the current crisis has its roots deep in the kind of economics advocated by Thatcher. The UK economy has been hollowed out and nobody has any notion of how to get it working again without generating yet another "your house is temporarily worth four times its real value so don't worry be happy" credit and property bubble. Of course we have to present the other side of the argument. There are some impressive statistics from the period since 1979. Inequality has increased enormously since Thatcher came to power. Poverty too. That deliberate redistribution of wealth to those that already had the most is what sustains the stupid, failed dogma. It works magnificently for those who wield economic power.
It's hardly surprising in this context of economic failure that the inheritors of Thatcher's political tradition promote hatred and fear of the poor to mask their failure to deliver. If a millionaire member of the Bullingdon Club turns out to be a misogynist prepared to kill his children to take revenge on a woman who has spurned him then it's an isolated case you see. Shit happens. But if the misogynist in question happens to be drawing welfare benefits then we get the vile, repugnant attempts by the likes of George Osborne to use the case to smear all welfare recipients. Likewise, if you've promoted policies that mean a huge chunk of social housing stock has ended up in the hands of private landlords then obviously the only solution to a lack of housing for those on low incomes is to blame those who are still lucky enough to have a roof and a spare bedroom. So you make their incomes even lower. There are even more vindictive policies than that.
Ah, but you don't understand how terrible things were before she came to power is the last resort of the Thatcherites. But I do know how things were before Thatcher, and it seems I have a much better memory than her fans. I don't just remember strikes and tales of inexorable decline, I remember a country supposedly much poorer than it is now yet able to provide a whole range of reasonable public services that have now become perplexingly unaffordable. Pensioners weren't expected to live out their last years on the poverty line, a health service that kept people healthy without corporate sponsorship! Industries that made things. All terribly old-fashioned I know, but if I want to look for evidence of long term decline I don't need to go back into history to find it.
So I'm glad that she's dead and I hope the coffin is made of lead. All the better for it to sink slowly, but relentlessly, down through the sticky London clay until it reaches a point where return becomes impossible. Now, if you'll excuse me, I need to go and check that the cava I have in the fridge is chilling nicely and that I have the right music selection ready for such a solemn day.
I said it last year, didn't I? Somewhere a bit further down the page. In the comments to what I now realise was a hopeless and pathetically inadequate attempt to parody what Mariano Rajoy might say about the EU rescue for Spain I noted just how difficult it is to parody the man. Then today he said this, I swear I haven't changed a single word:
It's that time again, the South of Watford winter break. Well deserved, as always. Defying Mayan or any other prophets of doom I'm taking off this afternoon for Chile. As that country seems to be doing a lot better than Spain I might have to resist the temptation to stay and grow avocados or something similar. The picture below is of a place I've been before, and hope to repeat this time around; Puerto Varas and the Osorno volcano. As Rajoy might say, have a good festive season - if you can.
It's a South of Watford world exclusive. Spanish Prime Minister and well known man of action Mariano Rajoy spoke to this blog with unprecedented frankness on the possibility of his government asking for an EU financial rescue package. This is what he had to say:
"If we choose to ask for what you like to call a 'rescue' then we might do it; or not. On the other hand you could tell me what we might be doing. Today we are not asking, tomorrow we might. Or not. We've taken a difficult decision not to ask for it until we do. But first we need to know whether we will be asking for it or not. If we feel the need not to ask for the rescue then we must first establish what we are not asking for. Is berry difficul todo esto."
A very strange thing happened last week in Spain. An elected representative of the Partido Popular resigned after his involvement in murky events came to light, and not only did he resign but he did it quickly. Even stranger still, his own party did nothing to defend him. Odd when you consider how long the PP affords protection to people who take money supposedly destined for children suffering sexual abuse or for those suffering from AIDS and spend it instead on apartments in Valencia.
But everything is odd about the case of Santiago Cervera, a member of the Spanish parliament for the PP until his sudden resignation just over a week ago. Cervera was arrested in Pamplona two days before he resigned by a unit of the Guardia Civil who were staking out the drop off point for a supposed blackmail attempt on the president of the local savings bank. They caught Cervera in the act of retrieving the (fake) package that had been left as bait in a hole in the wall of the city's old fortress.
Cervera claims he has been the victim of a setup and after his resignation produced anonymous emails that claimed to offer confidential information on what had been happening in the Caja Navarra savings bank. This information was supposedly to be placed in that same hole in the wall in Pamplona, and Cervera claims that he only went there motivated by curiosity. The investigating judge is clearly not convinced, and has formally notified Cervera that he could be facing criminal charges.
Now it is apparently well known in Navarra that Cervera and those running the Caja do not get on, just as it is well known that Cervera has plenty of enemies there as a result of the political shenanigans of the last few years involving the PP and their, occasional, partners in the ruling Unión del Pueblo Navarro. Perhaps this history is the reason why Cervera ran on the PP list for Madrid in last year's general election despite his long association with Navarra.
Santiago Cervera would not be the first person in the PP that you would link with sinister activities such as blackmail, there are many other far more likely candidates. Indeed Cervera - and you have to take this statement in the general context of the PP and how they behave - had something of a reputation for integrity and for campaigning for greater transparency in politics. As I say, I wouldn't like to stretch that point too far; we're talking relative integrity. Perhaps that's why his party dropped him so coldly and quickly?
Or maybe they know more than we do? The details we have of the case so far just don't fit. The emails produced by Cervera were dated almost a week before the president of Caja Navarra went to the police over the alleged blackmail attempt. So if Cervera went to the hole in the wall earlier there would be nothing at all to find and life would have resumed its normal course. Now we must await further news from the judicial investigation. Running with the bulls isn't the most dangerous sport they play in Pamplona.
With all the fuss around the Catalan elections, the first anniversary of Mariano Rajoy's election slipped by almost unnoticed. Of course it's still not a year since he (allegedly) took office as it takes a month or so after the elections for a change of government to take effect in Spain. Anyway what a year we've had, packed with hugely impressive achievements of all sorts. This is really just a small sample:
Unemployment - at the end of the third quarter of 2011 Spanish unemployment stood at a measly 4,978,300. Thanks to the rapid and forthright measures taken by Rajoy's government to reactivate the Spanish labour market, we have now reached the historic high of 5,778,100. The once remote possibility of having 6 million unemployed in Spain will now almost certainly be happening in 2013. If that perhaps seems a bit grim, it's not all bad news. Hundreds, if not thousands, of new jobs have been created in the public sector for friends and relatives of senior PP politicians.
Economic growth - if last year the economy was showing some weak signs of recovery (Spain was no longer in recession) the new government swiftly put paid to any of those old fashioned notions about the necessity of economic growth and now we have -1.6 growth and a profound recession which is predicted to last throughout next year at the very least.
Taxes - the party which took to the streets against an increase in sales tax when it was imposed by Zapatero quietly deleted the web page publicising this campaign shortly before Rajoy introduced a further increase in the same tax. Income tax has also been increased but then the requirements of having a balanced view oblige me to put the other side. The onerous burden of shared sacrifice means that the enormous fortunes stashed away in the SICAV investment funds have retained their hugely generous tax status untouched. A similarly generous tax amnesty for fraudsters has flushed out less than half of the target figure even on the government's own figures.
The banks - in one year we have gone from "we won't put a euro of public money into the banks" to the Bankia fiasco and possible fraud and the creation of a bad bank. Worse, that is, than the others.
Still, at least the pensioners have been protected? The last remaining unbroken electoral commitment of the few that Rajoy actually made has just fallen, with the breaking of the link between pensions and inflation. Rajoy had made a sort of implicit contract with pensioners, they would vote for him to protect their pensions whilst he made sure that future generations would never enjoy the same conditions. He lied.
It's been a while since I've had anything in this blog that I would consider to be a rant. I suppose some may not share that opinion. As a final post for the moment on the Catalan elections I thought I'd share a list of some of the things I found most irritating during the campaign. Plenty of material there, but this time I've decided to leave all the ridiculous stuff from right wing sources in Madrid to one side. I've dedicated plenty of space to them before on this blog and I hope to continue doing so, it forms an important part of what I see as my public service remit.
Instead this time I'm focusing on things from the pro-sovereignty side. Feel free to put the other side or conflicting opinions in the comments, for a day or two we can still pretend we live in a free society. The disclaimer first, I think I've already pointed out on previous occasions that I support the right to decide for Cataluña and other places too. I am not now nor have I ever been a prisoner of the opinions of the lunatic right in Madrid. I don't share the argument for Catalan independence, although I understand and respect the case for it when it is reasonably argued. However, that is not the case with the shit I'm going to describe now. Here we go:
The "nobody loves us" argument. You see it in comments like "we have to separate because we see the Spanish have no love for us". Oh please, grow up! Be like Millwall fans for God's sake. No one loves us, we don't care. Well, maybe you don't need to go that far, although at any given time half of them are probably slumped in a bar somewhere just off the Ramblas anyway. But a bit of mental toughness. Not everybody has to like everybody else to be able to share the same territory. Perhaps also consider the possibility that describing the rest of the country as fascists (see below) or lazy scroungers living off your hard earned money doesn't really help when it comes to creating a harmonious and mutually respectful atmosphere? Just a suggestion, take it away and think about it. But do stop bleating.
It's the history stupid! I don't have a disdain for history, on the contrary I think it's very important that we study and above all learn lessons from the past. But that's not the same as living in it. Trying to use past glories as a basis for the future is precisely that. Only the good bits of history, of course, not the bits where most people are just peasants standing around in their own shit and keeling over with the plague. Let's just pretend we're all in the Catalan nobility and we're riding off to conquer another chunk of Italy or an island somewhere. I don't generally accept Balkan/Catalan comparisons, but I can't stomach that kind of Serbian "we fought a battle in this muddy field 1000 years ago so therefore its ours" mentality. It's over, and it's a far better contribution to join in constructing a different future than to try and return to an often imagined past. If, after having considered the issue you decide that what you like is dressing up in stupidly heavy armour and slaughtering peasants than you are probably standing in the right muddy field. Just try not to bother anybody.
The fake solidarity argument. Of course I have nothing at all against redistribution between wealthier and poorer regions but first we have to have all of our money. ALL OF IT! I guess it helps that I can write this from a region that also contributes to the redistribution of wealth in Spain, and I can declare that I'm in favour of that policy. There should be more transparency over funding and where all the money goes. Those who want independence or the full monty in terms of fiscal receipts are clearly not in favour of redistribution, at least not outside of Catalan borders. So why pretend otherwise if you are demanding something that makes it impossible? Will it be 10 pujols a week into the collection plate at church for solidarity after independence?
There's no investment. You know those Spanish 'pijo' cretins who like to comment in foreign media like the FT or The Economist trying to take advantage of what they assume is complete overseas ignorance about Spanish affairs? You know who I mean, they would write things like "Perhaps you are not aware of this, but Zapatero is really an ETA terrorist and second cousin of Saddam Hussein who eats the babies of decent Spanish families for a hobby". Well there's a Catalan equivalent. They write things like "Spain spends millions on high speed trains in other regions, yet we have no transport link to France". You lying little fuck is my usual measured reaction to this kind of comment. It's being built and its about to fucking open, and its not like at the moment you have to change in Barcelona into a donkey cart to get to the French border. When I come to power anybody who tries to get away with this will be taken outside and given a severe talking to by someone dressed as a traditional British bobby. Maybe a slap too, but in a non gratuitous way, obviously. Then they'll have to write a letter of apology to the media organisation concerned saying how sorry they are for being a lying little fuck. I mean, if you have to tell porkies like that to bolster your case? About 6 months after the high speed link to the border opens there'll be someone writing in the comments page of The Guardian saying "Oh it's so unfair that it takes us Catalans 27 seconds to get to Paris in our train that only goes at 3000 km a minute when in Madrid they have one that gets there in 26 seconds and lands on fucking Mars on the way". Jeez it's annoying.
Franco. It's the opposite of the history thing combined with a touch of the pijo cretin. This notion that Cataluña is some sort of 21st century liberal Scandinavian paradise trapped in the evil grasp of a medieval theocratic Spanish beast. Or a Francoist beast, take your choice. I mean it's not like CiU are the fucking People's Democratic Front For The Liberation Of Catalunya is it? Whilst we're on the subject, and despite the attempts to talk them up, it's not like Esquerra Republicana are either. Take Josep Antoni Duran i Lleida for example. This politician, leader of the CiU group in the Spanish parliament, is bizarrely popular with all sorts of Spaniards. This is because, on issues that don't affect Cataluña, he exemplifies this sort of "Why don't you all stop bickering and sort yourselves out?" common sense approach. He also lives a very fine life in the Palace Hotel in Madrid. He is also a catholic reactionary with opinions so extreme on issues such as homosexuality that you can almost imagine people at a Hazteoir meeting nudging each other and whispering "He's a bit over the top isn't he?" Then there's Franco and this idea that Spain has not changed even a little bit since 1975. Madrid, according to the absurd caricature, is supposed to be some sort of drab city straight out of a 1940's black and white movie where blue shirted Falangists keep the cowed inhabitants of the city in check. Now even if you line up the entire readership of La Gaceta in the same place, all you end up with is something that looks a bit like a large group of smokers outside an office building. Except that by the time you've finished half of them have died of old age anyway. This Franco memorial meeting next weekend, commenters were saying, is proof of how little Spain has changed. But journalists will outnumber other attendees 4 to 1 at least. Anyway, the Falangists have been replaced by the riot cops these days, so who says we've got nothing in common with Barcelona? Of course there are all sorts of things that could and should be modernised to make a better society, and the remaining leftovers of Francoism should be dealt with. Says a person who comes from a country where the opening of parliament is like a Monty Python parody with people wearing multi-coloured smocks and waving staffs and pikes.
All these lists for everything. You know what I mean, all those space fillers in what used to be called the quality press like "57 things you didn't know about some alleged celebrity who you've never fucking heard of anyway" I don't even make lists for going shopping. Life isn't some sort of giant Powerpoint slide for Christ's sake. Down with lists!
It didn't work. That's the simple and clear verdict of yesterday's elections for Artur Mas and Convergència i Unió (CiU). The gamble that they could capture absolute power in the Catalan parliament has backfired in a spectacular way that few expected. Whilst the last opinion polls suggested Mas might not reach the objective of an overall majority, I don't think any polls predicted that CiU would lose ground in the way that they have. It seems evident that there has been a significant shift of votes from CiU to Esquerra Republican (ERC). So one of the main consequences of this gamble by Mas has been to restore the fortunes of his main rival for the nationalist vote. That should have a few people inside his own party sharpening their knives.
Despite the setback, CiU are still very much the dominant force in Catalan politics. If anyone believes that the shift in support from CiU to Esquerra represents some sort of major turning point in nationalist voting patterns then I suggest they click on the results for 2006 in the results widget in my previous post. Esquerra have been here before, they've even done better than this before. The general assumption this morning seems to be that CiU and ERC will unite in a grand coalition, as between them they command a majority in parliament. This is not, it needs to be pointed out, the same as a majority of the votes cast. Between them the two parties can claim just over 44% support. Ironically, the alliance last time around between CiU and their good friends from the Partido Popular could claim greater electoral legitimacy, at least they made it to 50%.
The solution of a nationalist coalition might appear to be obvious but it's not so simple. Esquerra have never wanted to be a junior coalition partner to CiU, and that option is full of danger for them. There is, of course, the compensation that they get back their offices and official cars and all the trappings of power which they showed such a liking for with the 'tripartit' government a few years back. Unfortunately for them it didn't go down so well with their voters. Also, an agreement with Mas means they have to publicly line up behind setting the Mossos d'Esquadra and their rubber bullets onto anyone who doesn't like their health service being dismantled. There isn't that much remaining of the 'Esquerra' part in ERC but they also have to keep an eye out for emerging rivals, look at the rise of the CUP in yesterday's election.
In return for keeping Mas in power, ERC will need something to show for it and the obvious trophy is paving the way for an independence vote. The problem is, following yesterday's results, that the popular enthusiasm for such a move seems to have been wildly exaggerated. Nor is it really valid to spin the result by confusing an apparently pro-referendum majority with a pro-independence one. Despite what some appear to think, being in favour of the 'right to decide' yet against independence is both a coherent and an impeccably democratic viewpoint. It's the position I hold, for example, concerning Scottish independence. Even though I'm entitled to the passport if Salmond gets his way.
It's also important to remember, when considering the balance of forces, that regional elections tend to overstate the nationalist vote in Cataluña, with a reverse effect being seen in national Spanish elections. Nationalists are more motivated by the issues of Catalan government than Spanish. That seems to have changed a bit this time, there has been a greater mobilisation of anti-independence voters. The unionist party Ciutadans have been regarded as something of a joke, but they have tripled their representation in the new parliament. The PP also did well, by their own standards, although they are still a minor party in Catalan politics. After a build up that had almost everyone expecting a major shift towards pro-independence sentiment, a closer examination of the results reveals a small reverse in nationalist support.
The Catalan socialists of the PSC must be relieved, not because they did well but because it could have been worse and because of all the attention focused on Mas. The PSC should be the big hitter of the national Spanish parties in Catalan elections, and in the end they've finished in third place just ahead of the PP. That's an awful result, but I still believe it has as much to do with national issues as with local ones. It fits the pattern of dismal results in other regions for the PSOE. It's hard to say whether they have lost votes to Ciutadans and the harder line anti-separatist positions. Iniciativa per Catalunya, which would expect to pick up votes on the left from disillusionment with the PSC, have gained three seats which isn't bad but it doesn't suggest great things to come either.
There are all sorts of lessons to be drawn from these elections, but perhaps its the Catalan left that really needs to be thinking hard about where it is going. Seeing every issue through the prism of the national question isn't offering any solutions to those who need them as the crisis continues to bite hard. The idea that the unemployed of Badalona have more in common with Artur Mas and company than they do with the unemployed of Alcobendas looks patently absurd. As does pretending that the rest of Spain lives a leisurely life of ease and comfort at Catalan expense. Hard times are still ahead, and holding hands with Artur won't do anything to help those who are bearing the brunt of the crisis.
So is this it, crunch day for Cataluña as it decides its future relationship with Spain? Well no, not really. We are treated to yet another early election called, as in the recent case of Galicia, for opportunistic reasons. Which is not to say that today's elections won't be something of a turning point, it's just that it would not be fair to judge the results purely as a verdict on the future status of Cataluña. But such is the game being played by regional president Artur Mas that nobody can be sure that anything will happen in terms of a future sovereignty vote, even if he gets his desired overall majority. That majority is what this election is really about, Mas decided to try and ride the wave of nationalist sentiment surrounding the huge march in Barcelona on September 11th to try and get the majority government that he couldn't get last time around in 2010.
Mas and his party, Convergència i Unió (CiU), have never been in favour of Catalan independence, and the language he has used in the campaign to refer to the national question has been deliberately ambiguous. It's not hard to foresee that he could disappoint an awful lot of people if he gets his desired result. Not the for the first time, and it's not that easy to feel much sympathy for those who allow a bit of demagogic, flag waving, populist tub thumping rhetoric to triumph over the reality of their own experience. Mas runs a right wing government that cuts welfare services at the same time as reducing taxes for the better off. To then plead that there is no money to pay for essential services because of Spain seems blatantly ridiculous but you can hardly blame him for doing so given that it seems to work?
The campaign against the austerity measures so enthusiastically embraced by Mas and company has been effectively destroyed by his suceess in turning it into an issue of Cataluña versus Spain.
Some polls have shown Mas getting the majority he wants and others have shown him falling short, there is no consistent picture. What does seem evident is that there will be a significant collapse in support for the PSC, Catalan wing of the PSOE. Although this will also undoubtedly be attributed to nationalist issues as well it really forms part of a broader national pattern. This is all terribly flattering to the governing Partido Popular, some polls have even suggested the extraordinary outcome of the PP becoming the second biggest party in a region where its supporters have occasionally been able to fit in the largest model in the SEAT range.
As in Galicia, where the PP lost a significant number of votes but won a larger majority on a smaller share, the collapse in the socialist vote makes the PP look stronger because of their ability to mobilise more of their core vote. For the other parties it looks like there will be some revival for Esquerra Republicana (ERC), who have resolved their attempts to combine left wing and nationalist politics in a faintly ridiculous way; they now consider themselves to be left wing in the national parliament and nationalist when playing at home. Another beneficiary of disenchanted left wing votes could be Iniciativa per Catalunya, although much of the traditional socialist vote looks destined for abstention The results, as usual, will not be known before 20:00 Madrid time. The results widget, courtesy of El País.
The latter stages of the campaign for tomorrow's Catalan regional elections haven't just been about the cynical attempts by Artur Mas to convert nationalist sentiment into an overall majority for his party, Convergència i Unió (CiU). Corruption has become one of the main issues following a report by El Mundo claiming that senior figures in CiU have millions of euros carefully stashed away in Swiss bank accounts. Mas and CiU have continued to play the nationalist card by claiming that any such reports are just the evil work of Madrid based Spanish centralists.
Now my views on El Mundo's journalistic standards have, I think, been fairly clearly expressed in my blogging over the last few years. The paper has a long history of manipulating information and sources, so it should always be a standard procedure to try and get hold of the original documentation. Yesterday, in the case of the corruption allegations we got that opportunity as a police union released the document which El Mundo used for its story. In reality, the issue of the Swiss accounts is not the core of the document, which is more about the scandal surrounding Barcelona's Palau de la Música Catalana.
Lovely building the Palau, I went to a concert there a few months ago. Not so lovely is the the way in which the rehabilitation of the historic building was used as the cover for a massive corruption scandal which goes to the heart of the Catalan political establishment. The case concerns the paying of huge commissions by major companies in return for public contracts, with the governing bodies of the Palau being used to distribute the proceeds between individuals and organisations closely linked to CiU. El Mundo's document casts little new light on the case, but as a description of the scale of the corruption involved it's really quite useful.
Interestingly, it turns out that it's not just CiU that is affected by the scandal. The document mentions an allegation that El Mundo, unsurprisingly given its political orientation, didn't seem to find very interesting. The claim cited by the document is that José Maria Aznar's political foundation, the FAES, also received a handsome commission via those accused of ripping off the huge sums of money involved. Surely there would be no collusion between the dominant party of Catalan nationalism and Madrid's right wingers, supposedly so bitterly opposed to each other? Well it seems that one of those accused in the Palau case, Felix Millet, was also a prominent member of the Catalan branch of the FAES. By one of those uncanny coincidences that life throws up, Aznar's administration made a generous contribution to the (by now) incredibly expensive job of restoring the Palau.
The Palau case is not unique by any means, it's remarkably close to that pattern of corruption that is still emerging in Partido Popular ruled areas like the Balearics, Valencia and Madrid. Public money is ransacked via commissions and phony billing with part of the money being diverted to the illegal financing of political parties. The only 'fiscal deficit' we're talking about here is the millions these people have managed to extract from public funds. Nevertheless, it's clear that Cataluña is more than capable of supporting its own local kleptocracy without any help from the rest of Spain. It's going to take an awful lot of flag waving to get rid of the stench.
With all the noise of the election campaign, it's easy to forget that CiU and the PP have had a pact for the last year, with the Catalan nationalists showing enthusiasm for some of Rajoy's failed economic recipes in return for the PP propping up the minority administration run by Mas. The collaboration isn't finished either. Yesterday the Spanish governnment pardoned, for the second time, members of the Mossos d'Esquadra who had been convicted of torture. Yes. Torture. This pardon, along with that of a corrupt CiU politician a few months ago, is part of the pact between the two parties. Now the same officers will be free to torture other citizens. I would nominate them for the job of waving the Catalan flag from the police helicopter on the next Diada march in September 2013. I'm reliably informed such gestures go down very well. That is, if they're not too busy dealing with the pesky opposition.
I was reading last week an extract from Aznar's forthcoming memoirs. It's a tedious and difficult task, but somebody has to do it - I mean, you're not going to buy this stuff? In the midst of all the vainglorious grandstanding about how Aznar made Spain the greatest nation the world has ever seen, there was some interesting detail about how he worked hard to get CiU to join his government, even when the PP had an overall majority. You see, they had quite a lot in common. They still do, it's a shame that so many will need to have Catalan independence before being prepared to deal with that.
5778100 and still rising. 1737900 households where nobody is working. Unemployment in Spain is above 25% for the first time ever and it would be churlish not to acknowledge the key role played by that important labour market reform we got earlier this year. Still, with temporary contracts only taking around 90% of those few new jobs being created, there's clearly still everything to play for.
I did toy with the idea of continuing wordless blogging and just post the results widget from El País. The results will start coming in after 20:00 Spanish time.
Both of the regions voting today belong to that select group of comunidades autonomas in Spain (along with Cataluña and Andalucia) that set their own electoral timetable instead of having a common voting day. Neither Galicia nor The Basque Country have made it through the full four year term, although the reasons for early elections are different.
The outgoing Basque government had no choice but to call elections after the Partido Popular withdrew their support for the minority administration led by the socialist Patxi López. The expectation for today's election is that 'normal service' will be resumed and that the nationalists will sweep the board, probably taking the first two places. A return to nationalist rule would probably have been the case even without the fall in support for the two big national parties (PP and PSOE) provoked by their management of the crisis. The legalisation of parties linked to ETA's political wing means that the full nationalist vote will be reflected in the results, unlike the previous election.
This will leave Patxi López free to become the 'continuity' candidate for national leadership in the PSOE when current leader Alfredo Pérez Rubalcaba finally gets the message that he is not the future of his party. López will be in an even stronger position if the Catalan socialists get a drubbing in the forthcoming elections there. Carme Chacón almost beat Rubalcaba to the leadership but she will be damaged by a bad result in Cataluña. The next time a leader is elected there will be other contenders.
The effect of ETA's continuing truce and the legalisation of their political wing changes the balance of power in nationalist circles. The conservative PNV has always dominated the nationalist vote but now they are in competition with a strengthened rival. The margin between the PNV and Bildu will be important for the balance between those satisfied with regional autonomy inside Spain and those who favour a push for independence.
In Galicia the reason for early elections is simply political expediency on the part of the PP. The party has decided that with the economic situation continuing to deteriorate and the with the threat of imminent EU intervention to prop up Spain's finances, there is less political cost in bringing the elections forward. The PP may even conserve their majority in the Galician parliament, the PSOE shows little sign of electoral recovery and the Galician nationalists have been in disarray. If it comes off, the PP will feel fully vindicated in their consistent strategy of putting the party interest before anything else.
Barring surprises, the distribution of the vote may not change very much. What will be important is turnout, a big decline will be seen as something of a vote of no confidence in the big two parties. Some recent national opinion polls show them with little more than 55% support combined, when in happier times for Spain it would have been more like 80%. Some disenchanted voters will vote for the smaller parties, but many may simply opt for abstention.
Then, with the elections out of the way, perhaps Spain's government will come out of hiding although Rajoy's administration seems to have decided that is the best way to weather the storm. The decision on whether to ask for an EU rescue doesn't just depend on the electoral timetable, but as with the case of Andalucia earlier this year we have seen that the PP has no problem with concealing their intentions for electoral benefit. No-one in that party believes in falling on their sword for the greater good, power and the opportunities it presents are too tempting. As for those who suffer the consequences of this, ¡que se jodan!
It's now over 3 weeks since I last blogged on the subject, but the crisis over the bailout of Bankia rages on. As each week passes we learn more about the colossal disaster that the bank has become. The amount needed to save Bankia seems to rise almost every day and the disastrous handling of the issue by the government came dangerously close to provoking a run on deposits in the bank.
More than just being another episode in an ongoing financial crisis, the Bankia situation does show every indication of being a full blown scandal. How is it that a bank which announced profits of millions of euros and which was still talking of making new acquisitions just a couple of months ago has been revealed to be a wreck with such enormous losses?
The government is doing everything it can to avoid any kind of investigation into what has happened, criminal or otherwise, and is getting some help from the PSOE. The PP have tried hard to put all the blame on the outgoing governor of the Banco de España, who does deserve his share of criticism. But then we are still left wondering what exactly Rodrigo Rato and friends were doing in return for the millions they took out from presiding over the bank?
As usual in these situations it's the little people who take the hardest hit. Given the lack of interest from the big investors, Bankia mobilised its whole commercial network to sell shares to its own customers. I know personally of one case where €3000 was simply deducted from an account without consent in return for what would now be a virtually worthless shareholding. The 'mistake' was of course corrected, but I wonder how many other cases there were.
The PP have blocked the possibility of parliamentary investigation, even though they could easily use their parliamentary majority to convert any investigation into a circus. What should be happening is a full criminal investigation to examine what really happened inside the bank. Best wait for that sitting down, as the Spanish like to say.
It says an awful lot about the way this government operates that the announcement of how much public money Bankia needs was made by the newly appointed president of the bank, with a figure way above anything which had been suggested by government ministers. Then there is the (deliberate?) confusion over the way in which the bank will be rescued. True to their ideology, the government is making it fairly clear that there will be no general public benefit in return for €19,000 million of help.
The only response to criticism of their handling of the crisis has been attempts to distract public attention. Anything will do, the spat with Gibraltar, the chorus of whistles that greeted the national anthem at the Spanish cup final. All with the help of servile newspapers who find day after day that Bankia is not a significant enough issue to make the front page.
Spain's government is being crushed by the weight of its own mediocrity and inability to respond to the situation. After Mariano Rajoy's surprise press conference the other day, there are now not so many criticisms of his refusal to explain events. Because it has become evident that he doesn't have an explanation to offer, merely a collection of recycled cliches. The problem with this government is that they have the capacity to make the outcome of the crisis even worse for Spain because of their determination to politically manipulate the situation the country faces.
Some will be happy at the suggestions that the EU is now demanding even more cuts in return for possibly relaxing a budget target that nobody seriously believes to be achievable in the first place. However, the argument that this is a crisis of public debt looks more and more frail every day. It's about public resources being used to prop up the private sector. There are some absentees from the list of those accused of mismanaging the banking crisis, because those who control Spain's biggest banks have been instrumental in driving the disastrous strategy. Happily, not everybody is taking this situation lying down.
The news yesterday that Bankia is going to be bailed out by the Spanish government has put the stability of the Spanish banking system back at the centre of the country's ongoing crisis. In the process the government has managed to simultaneously create a certain degree of nervousness about the safety of deposits with Bankia as well as significant outrage over the proposed bailout - which could involve as much as €7000-10000 million of public funding. We don't yet know how a government which previously claimed it would use no public money to bail out the banks is going to manage the turnaround, Friday is the bad news day. The commitment on no public bailouts is now just another of those broken promises which sees virtually nothing remaining of the few concrete commitments that Mariano Rajoy made prior to the elections.
The surprising part of the announcement was that it came coupled with the removal of Rodrigo Rato as Bankia's president. Rato, at least until yesterday, was regarded by Partido Popular supporters as an economic wizard; based on him having been economy minister at the start of Spain's economic bubble. More recently he has just cashed in nicely on running the bank which holds a huge amount of devalued construction related assets and bad loans. Thanks of course to Rajoy's decision to place him as boss of Caja Madrid, Bankia's main component. Which makes it even more significant that such a powerful figure in the PP should be removed by a government of the same party. Because he was removed, it seems. The situation is made even more ironic by the fact that the move against Rato was spurred by a critical report from the IMF, Rato having been director general of that body until he walked away from that job before the shit hit the fan.
The whole Bankia situation stinks, and exposes in the process some of the false narratives that are used to justify the less well off sectors of Spanish society paying the brunt of the economic crisis. We were told that the fusion of the regional savings banks (the cajas) and their conversion into banks was a necessary step to clean up the mess left by the end of the construction boom. The cajas were bad because they are not run by professionals, was the story. Some story, because Bankia is now a bank resulting from this fusion process and all that has been created is an even bigger and more expensive monster. By the way, if things get really bad then don't expect the fund supposedly guaranteeing deposits to help account holders. That money has already been systematically ransacked to pay for a series of pointless fusions.
What makes things worse is that Bankia has already received significant public funding, in addition to what would turn out to be very expensive state guarantees if the bank were to go under. Funny, isn't it, that when we are told no money is available for public services the situation changes so quickly when it's the financial sector that comes calling? Especially when we were repeatedly assured that the problems were being solved. Don't go asking about the regulatory role of the central bank. Spain's Banco de España has been largely absent as banks and cajas have struggled to survive. Largely because the governor of this institution, Spain's highest paid funcionario Miguel Ángel Fernández Ordóñez, has been far too busy in recent years lecturing ordinary Spaniards on how well they have been living and why they need a good labour market reform to sort that problem out.
But at least we don't need to feel too sorry for Rato, he usually manages to land on his feet. It seems fairly likely that the economic terms of his departure will not be those set in the latest labour market reform for getting rid of employees. It was his economic model that failed and led the country into this crisis, the structure of the banks makes little difference to the outcome when the dependency of the whole sector has been on building ever greater numbers of houses year after year based on the assumption of endless credit. Bankia is still stuffed full of PP appointees and the solution adopted to allow them to continue in their comfortable positions is unlikely to be favourable to public finances. In this situation it is Rato that has been left, perhaps to Rajoy's satisfaction, looking like a greedy banker.
It's become a common feature for almost all governments with popularity problems to blame their troubles on poor communication rather than their policies. Spain's government is no exception to this, with the governing Partido Popular preparing a publicity campaign to attempt to justify Spain's disastrous economic course. Many of the PP's own supporters are deeply unhappy with some of the government's decisions, perhaps not surprising when you consider that Rajoy's administration has now broken almost every promise that the PP made before the elections. Party supporters are left trying to defend everything which they so loudly opposed when in opposition.
There is another aspect to the PP's strategy. The last few weeks have seen a growing chorus from government friendly media for something to be done about the state television company RTVE. Not having much of a democratic tradition means that Spain's right is unable to understand how a state owned broadcaster isn't directly supportive of their government. Any report which smacks too much of pluralism or which doesn't toe the party line is automatically accused of anti-PP bias. The right wing got their way last Friday, as the government changed the law concerning the appointment of RTVE's governing body so that they can put the corporation under their control.
It would be going too far to describe RTVE as being independent, but the situation that existed until Friday at least meant that a single party couldn't impose their political control. Zapatero's administration had changed the law in such a way that that two largest national parties had to agree a consensus candidate for the presidency of RTVE, and neither party could have an outright majority on the governing board. That goes out of the window now, if there is no agreement on a consensus candidate then the government can impose whoever they want with their parliamentary majority. The pretext of austerity has been used to remove representatives of organisations like the unions from the board, allowing the government to appoint the majority.
This threatens to return us to the Aznar era, when RTVE news delivery was kept under tight political control. Although it's unlikely that news bulletins will begin, as they invariably seemed to do in Aznar's time, with the words "el presidente del gobierno ha dicho". Rajoy still seems to be averse to any kind of communication at all, although a more government friendly broadcaster will no doubt show the great leader delivering declarations without of course experiencing anything so uncomfortable as a journalist asking him a question he hasn't been prepared for. This is a move towards the Telemadrid model of television as a political tool, and those RTVE journalists who have demonstrated worrying signs of independence will now be wondering what future they have.
Despite the moves to control RTVE, it's still unlikely that Spanish television will be the chosen platform for breaking the really bad news. For that sort of thing you really need to be a reader of the Frankfurter Allgemeine, or perhaps occasionally the Wall Street Journal. Economy minister Luis de Guindos announces the government's measures first to overseas media, and then eventually the government gets around to telling the Spanish people what is about to happen to them. The latest example was with the additional health and education cuts which were announced first in the German paper. At least the sick can be reassured that when they have to pay more for their medicines it's really just a problem of communication.
Mariano Rajoy, the man who proudly proclaimed in January that he would always show his face and never hide from the crisis, left today's Spanish senate session by the back door to avoid having to answer any questions from journalists. This on a day when Spain has again been battered by the markets, to an extent that has previously provoked the dreaded EU "rescue" for other countries. All of which comes the day after an increasingly panicky government tried to placate the markets by throwing them a bone in the form of €10,000 million worth of additional cuts in Spain's health and education services. Because, as we all know, health and education services cause tremendous problems for a modern, 21st century, economy. Just as they did in the 19th century. These are services which have gone, in the space of just 3 months, from being "untouchable" to being top priority for cutting. The PP made very few concrete commitments, but they have already broken almost all of them.
Rajoy seems to have very quickly achieved the difficult task of making Zapatero look like a far sighted, long-term strategist by comparison. Those who so freely accused Zapatero of constantly improvising are now all over the place, although they maintain their ideological focus. Hence the offer of cuts in education and health in response to all the attention focused on the financial sector and its dodgy finances. The latest cuts figure was announced yesterday buried in the third paragraph of a press release, and with no indication of any sort of where the cuts are to be made. It's had no effect of any kind when it comes to improving Spain's situation, nor was it ever likely to. But now the government has created a situation where the cuts will have to happen, or they will be punished for not doing them.
This seems like a suitable time to recall how little Spain's public services have to do with the crisis here, which is above all a problem of construction related private debt. From the creator of the admirable Españistan we now get Simiocracia.
One of the comfort blanket beliefs of Partido Popular supporters as they finally start to come to terms with the true nature of Spain's crisis has been that their government is doing things properly and that the reward for this has been a decline in market pressures on Spanish bonds. Well they've just lost their blanket. Today's not very successful bond auction shows that once again it's the turn of Spain to be pushed a bit further along the path which the Irish, Portuguese and Greeks have already taken. The recent lull in such pressure has had everything to do with the "barra libre" policy adopted by the European Central Bank in terms of giving huge sums of money to the banks whilst of course doing nothing to help the countries most affected by the debt crisis.
But surely the Spanish government is doing everything asked of it, supposedly what the markets want? Leaving aside the almost incidental 0.5% difference between the deficit target the Spanish government wanted, and the one they have been given by the European Union. The much vaunted labour market reform, which is already helping Spain progress towards 6 million unemployed, and now a budget which aims to slash 3.2% off the deficit in a single year. It is always either too little or too much. Usually the former, but once it becomes clear that Spain's chances of economic recovery are being fatally crippled by these measures then the excuse for making it ever harder for the country to finance its debt will become the poor prospects for economic growth. It's this wonderful Catch-22 that allows the roulette wheel to keep on spinning.
So the idea that slashing public spending to cut the deficit is going to let Spain escape is lacking any credibility. Even less credibility can be given to the arguments from the government that this lays the basis for economic recovery. Apart from this, it's extremely unlikely that the government will get anywhere near the deficit target this year. I haven't seen one serious analysis of Spain's situation which suggests it is possible for the government to achieve such a big reduction of the deficit in the midst of a recession. The government doesn't believe it, hence their strenuous efforts to change the target for this year. The combination of spending cuts and tax increases announced in the budget is the minimum amount (a mere €32,000 million) needed to get to the target, but the downward spiral that these cuts set off is more likely to increase the deficit than reduce it.
The IMF estimate of a 1.7% GDP decline for the Spanish economy this year is already outdated. Revisions of these estimates are almost monthly events these days. With the latest measures announced in a budget that was delayed for electoral reasons, it is reasonable to start thinking in terms of a 2.5-3% decline for 2012. If, as may well happen quite soon, the response to the failure of the first package is more of the same then it becomes distinctly possible for this provoked recession to match that which we already saw in 2009. Even some of those who blindly followed the dogma and assumed this madness was bound to work are now revising their positions when faced by the bleeding obvious. Not that they acknowledge the shift. All this pain to achieve nothing but further destruction of productive capacity can in the end only be justified with a narrative that distorts reality beyond all recognition.
Much of the damage to be caused by the cuts is still to be revealed, almost half of the cutbacks have to be made by the regional governments who are the authorities responsible for education and health services. The way the government has presented the new budget makes it all seem relatively painless, but hidden in the details are measures which can only make life harder for many. Despite the talk of a general percentage cut across ministries, some of these are doing much worse than others. International aid has been brutally slashed, public works investment takes a huge hit and the money spent on scientific research is also heavily cut. Out the window goes the budget dedicated to assisting job seekers, and that which assisted young people in finding somewhere to live. We wouldn't want anyone to start thinking that Rajoy's government has an economic model in mind that isn't based on cheap labour, concrete and tourism.
The government claimed that it has no intention of cutting public sector salaries, although the decision to freeze these is in effect a cut in living standards. Not that prices are likely to fall as a result of the budget, RENFE will have to fill the gap left in their funds with significant fare increases for trains. Both the public television service and state support for the cinema industry are seeing significant reductions. Support for the most vulnerable who receive support for being dependent on others for their care has also been cut back. Some measures are a bit perplexing. If the government intends to maintain unemployment benefits as they claim then it is odd that they have assigned less money for this purpose at a time when the numbers of the newly unemployed have been increasing again.
The sacrifice is far from equally shared. The royal family gets a reduction of just 2%, something the king will probably forget to mention next time he makes one of his "we all have to pull together" speeches. The interior ministry also gets off lightly, those police helicopters, rubber bullets and gas canisters are expensive and are needed to dissuade people from protesting against their situation. The defence budget also came out relatively well. Then comes the star proposal. A tax amnesty for those fraudsters who pocketed so much of the profits from the boom years. They can now regularise their situation paying just 10% with no questions asked. Not that many of them will, the way things are going they almost certainly have their euros stashed outside of Spain. Meanwhile, the honest taxpayers who have had their income tax increased earlier this year are left paying a much higher percentage than the crooks.
They say the champagne was ready to be opened in celebration on Sunday at the headquarters of the Partido Popular. Such was the confidence that they would win Andalucia's regional government with an overall majority. That's what the opinion polls prior to the final week of the campaign had all indicated, and it is said that the private polls in the last few days before voting also carried the same message. This was going to be the jewel in the crown following the conquering of power at national level, Spain's biggest regional government and the last remaining bastion under majority PSOE control. Not only that, but the popular mandate to be gained in Andalucia was going to be used as vindication for the agressive policies of the government - proof that the Spanish understood the need for tough measures.
But it didn't work out. Sure, the PP emerged as the largest party in terms of votes, something they had never achieved before in Andalucia. Barring dramatic events, it's not enough. They are 5 seats short of a governing majority and the PSOE can govern again if they obtain the blessing of Izquierda Unida (IU), who doubled their representation in the Andalucian parliament. When a similar situation occurred in Madrid in 2003, 2 of the PSOE deputies were 'persuaded' not to support their party in the crucial vote but in this case such a solution would be a bit more challenging. Despite the attempts by the PP to spin the result as victory their faces betrayed them and the party at their headquarters never got going. They entered the week of a general strike and what promises to be an extremely tough budget without the trophy they had hoped for.
For once the abstention didn't come from the voters on the left. At least not all of it. The PP lost around 400,000 votes in Andalucia compared to the general election, whilst the PSOE made a timid recovery from November's disaster and some of their former disillusioned supporters turned further to the left and opted for Izquierda Unida. The regional president, José Antonio Griñan, has seen his decision to give Andalucian voters a taste of the PP in office vindicated. Had the election coincided with the general election Griñan would almost certainly have been booted out. Now the question is what sort of agreement Griñan can make with Izquierda Unida.
IU have already made it clear that they favour keeping the PP out of power. It's very unlikely that there will be a repeat of the situation that occurred in Extremadura last year where relations between the PSOE and the local IU leadership were so bad that the latter permitted the PP to take office. Such a situation is unthinkable now, with a PP national government implementing aggressive right-wing policies. Even so, IU should play hardball over their support, it can't be a case of business as usual. Andalucia has some possibility of demonstrating that alternatives exist to destructive slash and burn economics, and IU should not sell their support cheaply. The option of letting the PSOE govern in minority seeking approval for their measures shouldn't be discarded.
The Andalucian result has had an important psychological impact. The PP had behaved in recent weeks with incredible arrogance, very much as if they were the "dueños del cortijo". Even though their victory in November was as much a result of rejection of the previous government rather than support for full blooded right-wing policies, the government has behaved as if they have popular support for everything they want to do. Just as they did when Aznar got his majority in 2000. Now things don't look quite so simple, and the honeymoon is over for Rajoy. With Andalucia, and possibly Asturias, in opposition the political panorama changes.
The result in Asturias has been overshadowed by that of Andalucia, but it is also interesting. The PSOE emerged as the largest party, with the right-wing vote split between the PP and FAC, the formation of the renegade Cascos. The PP came third in the region whilst the decision by Cascos to call another election has not done him much good. Today's count of the emigrant vote has also changed the outcome with the PSOE gaining an extra seat at the expense of FAC. This leaves the PSOE combined with IU on level terms with FAC and the PP. The casting vote could lie with the solitary representative of UPyD who have previously stated they would support the party with the most votes in such a situation. Their principles, such as they are, may yet be put to the test in Asturias.
I haven't found much time for blogging recently, but at least I can maintain this blog's tradition of posting election results from Spain via the handy widget from El País. Both Asturias and Andalucia are voting today for their regional governments, although the early indications on participation suggest that many people in both regions are not that enthusiastic about casting their vote. The participation figures released earlier today showed Andalucia 10 points down on the previous elections, and Asturias 8. The received wisdom is that low participation favours the right, as their voters are usually less likely to abstain.
Most of the attention will focus on the Andalucian vote, where the governing PSOE face a serious possibility of losing power after 30 years of uninterrupted control. Affected by the reaction against Zapatero's government, by weariness after so long in power, and by a serious corruption scandal, the PSOE will regard just a failure by the Partido Popular to obtain an overall majority as a major success. The Andalucian vote would have coincided with the national elections if Zapatero hadn't decided to go for an earlier election.
The PP will obtain a huge boost if they win Andalucia, their candidate Javier Arenas has been a serial loser of elections in this region. It will give them unprecedented power in the country, as they already control a clear majority of the other regions and form part of a governing alliance in others. Apart from anything else the Andalucian election has been the primary reason why we still don't know what cuts the national government intends to implement in order to attempt to meet the crazy deficit reduction target for this year. With the elections out of the way then reality will come rushing up fast behind.
Asturias is holding elections just 10 months after the previous ones. This is a result of the failure by the former PP secretary general, Francisco Álvarez Cascos, to form a stable government there following his victory in May last year with his breakaway party. Cascos represents everything that is bad about Spanish politics, although it's very unlikely that he will do as well today as he did last year. The region could still be left without a stable government as it is not likely that any single party will win a majority. No further elections are allowed for at least a year if deadlock is the result, and as Asturias is one of those regions that doesn't set its own election date any government that results will have no more than three years in power.
All seems to be calm. Mariano Rajoy announced last week that the Spanish government was relaxing its deficit reduction target for 2012 and....virtually nothing happened. There have been some token noises of disapproval from Brussels but nothing yet which seriously suggests that Rajoy's apparently unilateral move hadn't been quietly agreed with those who are really in control of the Spanish economy. We'll have to wait and see how events develop, but if I was running the show in Brussels and wanted to allow a couple of countries to relax slightly their targets without encouraging everyone else to do the same, then this is probably how it would be done. It even allows Rajoy to pretend to be in charge.
Rajoy's justification for the move was of course the massive overshoot on last year's deficit target. There is understandable suspicion about the 8.5% deficit figure from last year. Much of the responsibility for this lies with the regional governments who, oddly enough, were more or less on target at the end of the third quarter only to veer wildly off it in the final three months of the year. Given that most of these governments are now controlled by the Partido Popular it is suspected that the figures have been manipulated to exaggerate last year's deficit. There are obvious political benefits in doing this. Firstly, it permits the PP to apportion more blame for the deficit onto Zapatero's government whilst at the same time bolstering their case for relaxing this year's target.
Politics is everything with the deficit at the moment. Despite being persistently asked by the EU to present a budget for 2012, the government has managed to defer this until after the Andalucian elections later this month. Then will come the really bad news. If anyone thinks that the pressure is off because of the change to the deficit target then they could not be more wrong. The government still needs to deliver as a minimum another reduction in spending equivalent to that which they already announced at the beginning of the year. These are cutbacks that go way beyond anything that Zapatero's government was required to deliver in order to try and cut the deficit by 2.7% in a single year.
They've changed a completely unattainable target for one that is just simply unlikely. The reason being that once you start making savage cuts to hit a deficit target then the effects of these cuts on tax income and economic activity in general mean that you have to cut even more just to try and hit the same target. This is the full application of what we can call, in a bid to assist future historians investigating the disaster, The Cycle of Stupidity. So in addition to the headline cuts figure to formally meet the reduction target, there will be an extra hit. The total cuts figure in the end could still be close to the €40,000 million that was seen to be necessary to meet the previous deficit target. The overall reduction if last year's budget target had been met would have been less than the one we will still get this year. Even though it's very unlikely to work.
I still see some occasional talk of growth resuming in the last quarter of this year and you have to seriously question the judgement behind this. With the government now accepting the IMF's estimate of a 1.7% decline in the economy, and bearing in mind that these estimates change for the worse every few weeks at the moment, just where is that growth going to come from? It would be nice to think that Rajoy's shift on the budget meant that common sense had finally told, but it seems to be only a tentative step towards dealing with reality. Bear in mind that job losses don't really cease until you get to around 2%+ growth and 6 million unemployed in Spain is now looking inevitable. But not, of course, unavoidable.