Democratic Regeneration

Suddenly, Spain's government has decided that its priority for the coming months is what it describes as 'democratic regeneration'. These are words that few have ever associated with the Partido Popular and Mariano Rajoy but there's no need to worry; Spain's right wing hasn't suddenly caught the democracy 'bug'. The weight of that long political tradition is still sufficient to ensure that the PP regards anything smacking of greater democracy as something to be avoided at all costs.

Instead we are getting a response to the dismal results that Spain's two main political parties obtained in May's elections for the European Parliament. 2015 is a big election year in Spain, if everything is scheduled as expected the country will have municipal and regional elections followed a few months later by a general election. The shock of the European elections was twofold, firstly because support for the two main parties combined fell just short of 50% of the vote, and secondly because of the surprise emergence of Podemos as a potential threat to that two party hegemony.

The PP does not panic in a very public way, but results which had the party not even reaching 30% of the vote in their strongholds of Madrid and Valencia have had a profound effect internally. Were this pattern to be repeated in the municipal and regional elections then the PP faces the prospect of losing power in places where they have governed for decades. Imagine the bonfire of incriminating documents that might mean, assuming of course that any incriminating paperwork that exists hasn't already already been destroyed in the wake of all the corruption scandals of the last few years.

The PP has an abysmal problem in reaching agreements with other parties, and the prospect of either governing in minority or passing to the opposition is too terrible to contemplate. Something must be done, and that something appears to consist of manipulating electoral law to ensure they can still govern with fewer votes. Pioneer in the gerrymandering exercise has been Maria Dolores de Cospedal, who combines her job as secretary general of the PP with that of president in Castilla La Mancha. Using the excuse of austerity, Cospedal has pushed through a law drastically reducing the number of members of the regional parliament. The new law has the happy effect of both making it harder to dislodge the PP from power and of effectively excluding any smaller parties from representation unless they can overtake one of the big two.

Inspired by such an impeccably democratic example, Mariano Rajoy has announced that he intends to change electoral law for the municipal elections so that the party which receives the most votes gets to govern regardless of whether they have an absolute majority or not. Although they talk of a minimum threshold necessary for a party to claim control of a city without winning the election, we will have to wait and see what the PP tries to get away with. Currently they talk of 40% of the vote, but that could easily be lower if the poll data they manage isn't looking good. Today's El Mundo poll has them on 30% nationally, a third of those who voted for Rajoy in 2011 have gone and many may not be returning. Rajoy seems determined to push through a major change in electoral law regardless of whether any other party supports it or not, and the talk of 'democratic regeneration' is merely the cynical touch the PP seems to feel is needed to decorate all of their measures. If that's still not cynical enough for you they also claim the change will help to avoid corruption.

The illusion of change in order to ensure that everything remains safely in the same hands seems to have become the trademark of Rajoy's administration and the management of the country's crisis. As the two-party system shows signs of weakness they change to law to try and prop it up. If someone like Pablo Iglesias becomes popular partly as a result of television appearances, then the PP has a solution; try to make sure he doesn't appear on television. It's the concept of the managed democracy they hoped for after Franco's death, sure people can vote but not just for anybody. Come on. This is not just the attitude of the PP, the whole establishment of the transition years gets intensely nervous at anything that might upset the cozy cronyism they have nurtured carefully for so many years.

There is a delicious irony in seeing all those who shouted in 2011 that what the indignados had to do was form a political party and present themselves for election changing their tune. Now that a section of the movement appears to have done just that and with a certain amount of success, not just the music changes as laws get quickly changed to preserve the status quo at any cost. This is not just about Podemos, new broader based civic platforms are quickly forming to present alternative candidacies in big cities like Barcelona, Sevilla and Madrid. The common denominator is a rejection of the old way of doing politics, and of those who administer the crisis in their own interests.

The emergence of Podemos, placed just behind the PSOE in El Mundo's poll, has had the effect of provoking some kind of crisis in almost all of Spain's political parties. This was most evident with the PSOE, who finally realised they had to renovate their image after over 2 years of steady decline rather than improvement in opposition. The unconvincing way they have done this, with all sorts of manoeuvres to try and fix the election of a new leader, doesn't bode well for a significant change of direction. The PP, who vilified Rubalcaba as being the epitomy of evil, suddenly realised how much they will miss him as they become the only party of the 'old guard'. They were much more comfortable with the ritual 'y tú más' sessions that the increasingly rare parliamentary debates in Spain consist of.

Perhaps the party which has taken the biggest hit from Podemos has been Izquierda Unida, who found themselves pushed behind the new party in several regions. IU had benefited from disenchantment with the major parties, but not as much as they should have. Podemos come in a with a different language and fresher style, and the leadership of IU has been left wondering what happened. The dead hand of the Spanish Communist Party has damaged IU's prospects for years as many of those who could be attracted to the platform left to do other things. Those behind Podemos amongst them. 

Even Unión Progreso y Democracia, who presented themselves as a safe way to break the two party hold, have a crisis of their own as they are no longer in pole position to be the alternative. Still very much the personal project of Rosa Diez, the party machine reacts badly to dissent and those who favour a fusion or agreement with Ciudadanos are subjected to insults by the loyalists. Diez apparently believed she could eclipse the Catalan upstarts, but her right wing media allies seem to be in favour of the merger and have fanned the flames. Again, the emergence of Podemos leaves UPyD looking every bit as much a part of Spain's political establishment as the two big parties, a case that is supported by the reaction of its leaders to the new party.

The opinion polls differ greatly on just what is happening, and are also subject to ever greater manipulation as part of the, occasionally hysterical, counter attack. The attempt by El País a few weeks ago to spin a revival in the PSOE's fortunes following the election of Pedro Sánchez as leader was widely criticised because of the way in which they found a 10% increase in support for the major parties that no other poll seems to detect. The pollsters in general have yet to offer any explanation for how they got the voting pattern so badly wrong in the European elections, and given that there have been no elections since you have to wonder how they are adjusting their polls to fit the new scenario?

The European elections in Spain are special in that they are the most representative, despite the low participation. This is because it is a national vote and therefore doesn't suffer the sort of deformation present in general elections here, that which allows Rajoy to have an absolute majority in parliament with well under 50% of the vote. Precisely the sort of system he now wants to introduce in municipal elections too. Incidentally, if you think that the Spanish electoral system has been brutally unfair in past general elections, just wait and see what happens in the next election if the two major parties have a lower vote but are still clear of any rivals. That could really provoke some democratic regeneration.

Felipe VI....A Profile Of Spain's New King

Son of his father, Felipe Juan Pablo Alfonso de Todos los Santos de Borbón y Grecia has successfully come through a rigorous selection process to be chosen as the new Spanish head of state. Some doubt has been cast, from those carping republicans, on his qualifications for the job - given that he appears to have reached the age of 46 without ever having had what could be described as a real job. His wife Letizia can tell him about that, although her decision to abandon journalism for life as queen to be suggests she wasn't that keen on a career either. Felipe sometimes has a beard, and sometimes doesn't, all of which leads to inevitable confusion. Perhaps it's false? We don't know. The elephants of Botswana were unavailable for comment at the time of writing this profile, although there has traditionally not been much love between them and la familia Borbón.

The Neighbourhood Goes Downhill

This used to be a nice area, before they moved in. There they are, with their funny food and that way of talking they have. Don't make the slightest attempt to integrate with the locals do they? 

Before we could be out and about doing whatever we wanted, it was a friendly area. The kids could be out on the street playing, now its not even safe to take the dog for a walk. What makes it worse is they think they're better than us. They certainly seem to live better than we do, god only knows where they get the money from. You don't ever see them doing any work do you?

Still, they've got those flashy cars and then they think they can park where they like and that nobody can tell them not to do it. We've always got the police in the area chasing after them at all hours, where's the respect eh? You can't say anything to them, in case they get aggressive and they set their TV station on you.

Don't get me wrong, some of my best friends are aristocrats but I think its all disgusting it really is....

The Spanish Austerity Disaster

Spain is in a dire economic situation. If you look at the economic data and especially at the unemployment figures you would think such a conclusion is beyond doubt. All of which makes it so strange to read frequent media reports, from inside and outside the country, which present a radically different picture. These reports talk of a country which has turned the corner and faces a bright future following a difficult period of implementing much needed structural reforms. It's bullshit. Bullshit based on highly selective cherry picking of data and misrepresenting the history of the crisis.  

A few weeks ago, with the publication of Zapatero's book, we finally got to see the content of the letter that was sent by the European Central Bank to ZP back in 2011 when the spectre of the dreaded 'rescue' seemed like a daily prospect. In that strange sort of proprietary attitude that Spain's prime ministers have towards government documents (see Aznar and the documentation about the Madrid bombings), Zapatero seems to have treated the letter as personal correspondence and taken it with him. What is striking about the letter is how little most of the demands contained within it had to do with addressing the immediate economic distress of the country. Instead, it amounts to a (hidden from public view) set of measures that more or less accurately represent the agenda of those who have championed the austerity approach that has now been implemented in Spain.

With the bond markets apparently so content, the stock market rising and the Spanish government busily (desperately?) trying to push an optimistic feelgood factor it seems like a good time to take a look at the results of the experiment. The bullshit really starts with the Rajoy government's bombastic claims about how they have taken the difficult measures necessary to avert the rescue. The extraordinary result of Rajoy's wise and determined leadership, if you have the tunnel vision necessary to believe in it, is that he hasn't just saved Spain from collapse but all the other countries affected by the Euro crisis too! Now there are some who would say that it was Mario Draghi's game ending we'll do what it takes to save the Euro statement that changed things, but that risks undermining the pro-austerity argument. We'll let the data do that.

It's worth remembering that Spain back in 2011 was also at the point of exiting recession. The second recession of the crisis, which covers the last two years, was deliberately provoked by the adoption of those austerity measures that some would now like to credit with bringing about the exit from that same recession. Not just the recession, but the addition of close to another million people to Spain's already enormous unemployment total together with the destruction of productive economic activity that this represents. Companies which had weathered the storm of the first recession without realising (why would they?) that the country would then be pushed into a second one couldn't last any more and closed their doors. It's a terrible price to pay, even more so when you look at the meagre results.

All these measures have been adopted in the name of reducing Spain's budget deficit, the dogma insisting that huge cuts in public spending had to be implemented and ignoring all warnings of the consequences. Assuming Spain has hit its deficit target for 2013, and leaving to one side our generous assistance to the banking sector that counts as deficit, the country has managed a reduction of something under 3%. Not bad is it, 350-400000 jobs lost for each point of deficit reduction? Some might say it hasn't been worth it. Indeed, those insisting on recession as the route to deficit reduction eventually had to recognise it wasn't working, not openly of course but the relaxation of deficit targets was nothing less than an admission that it wasn't working and what ultimately prevented Spain from tipping into the catastrophic state that Greece finds itself in. Nevertheless, Spain's public debt burden is now massively higher than it was before the medicine was administered.

None of this matters to the spinners and the cherry pickers. Look at the exports, they say. The balance of payments is positive, proof that the medicine works. I admire the shallowness of this argument, people who write about economics as a profession but don't apparently understand that throwing hundreds of thousands of people out of work depresses consumer demand and reduces imports. Hey, make another million unemployed and it will get even better! If economic depression reduces petrol consumption to the level of the 1990's then marvel at the success for Spain's import bill! On the export side it is of course completely true that Spain's exports have been the success story of the crisis, the only success story to be told apart from the ability of the financial sector to suck us dry. The problem comes when the spinners try to attribute this success either to austerity or to the accompanying 'reforms'. The improvement in Spain's exports predates all of the austerity measures adopted, and the much vaunted labour market changes. We have to give credit though to austerity for finally putting an end to that export improvement, squeezing the economy of the entire Eurozone means that Spain's major export markets aren't in the mood for buying either. 

It's odd, because according to the destructive dogma Spain couldn't possibly be a successful exporter in the last few years. We've been told all along that the fundamental problem for Spain is that it has become uncompetitive, and the austerity programme has been a clumsy attempt to force through the internal devaluation (read reduced wages) that would restore the economic balance with its competitors. Ironic then that it should end up damaging the sector of the economy that dared to contradict the sacred theory. This disastrous strategy of destroying broad sectors of the economy in the belief that a dynamic new model will magically emerge from the wreckage hasn't worked anywhere it has been tried. The destruction of so many low productivity unskilled jobs doesn't mean they get replaced by better ones. Just look at the few new jobs being created. 

This is where we get to the grim reality. Spain's economy has changed as a result of the crisis but it has gone backwards rather than forwards. For all the talk of reforms, and it is mostly talk, the objective of Rajoy and company has been to weather the storm with as little fundamental change as possible. I laugh when I read articles in the press about the wide ranging reforms Spain is supposed to have undertaken, wondering about the use of the plural. If you disagree try to make a list of them without thinking too hard and see what number you get to. The main change is in the labour market and because people don't buy those nasty imports if they have no money we should of course be pleased that the move towards more precarious low-paid employment is showing signs of success. Just as we should be pleased that many of the better educated young people are leaving the country. The government is certainly pleased with this, it's one way of reducing the unemployment total short of a serious epidemic. PP supporters gleefully proclaim the benefits of a period abroad. Character building.

This is not to say that Spain hasn't touched bottom on job destruction, just that reaching that point still leaves it far away from anything resembling sustained job creation. The labour market now requires detailed attention to see what is really happening. It is clear from the difference between social security figures and drops in the unemployment total that many people have simply dropped out of the labour force for one reason or another. It's also clear that many of the (overwhelmingly temporary) jobs created in 2013 were due to an unexpectedly good tourism season. Emigration, seasonal work in tourism and agriculture. Remind you of anything? Yes! A bonus point to the person at the back who said the 1960's. We've done the 1930's revival in terms of economic 'theory', so its time to move forward through the rest of the last century. Shame the construction leg has been blown off, let's hobble forward on tourism, good harvests and the distant hope of ridiculously oversold pelotazos like the Olympics and Eurovegas just to show how things have changed. 

Things get grimmer. Any Spanish emigrant who finds a good job overseas should hold onto it for at least 10 years and just enjoy the holidays back in the old country. No serious prediction can be found showing promising economic growth for Spain in the next decade. Next year the official prediction is currently (these things change almost monthly) for 0.7% growth. It doesn't get much better for the following years and the 2% growth that might indicate conditions for making a serious dent in that unemployment total looks far away. 2020 is the year I see quoted commonly for Spain's GDP to reach pre-crisis levels, but don't even imagine pre-crisis employment levels for that date. 12 years of crisis is some, cough, business cycle. Stagnation is the outcome for the next few years, sluggish growth at best. If you think or hope otherwise then ask yourself about the attention paid to pensions. Spain's public pensions are sustainable with high employment, so why so much attention focused on reducing their value (apart from the obvious commercial interests of the contracted experts)?

The markets and the banking sector seem very happy with this prospect, who wouldn't be after the vast sums of public money pushed their way. Hedge funds picking over the few bits of flesh left from the construction boom are presented as if they were investments in the future of the country. The electricity companies can raise energy bills 10% a year and still have the government claim that we owe those same companies ever greater sums of money. Seats on the board await the valiant ministers who indulge them. That thick layer of 'comisionistas' - notaries, registrars and other 18th century leftovers who are extremely well represented in the government not only remains intact but will be given extra sources of income for hitting a piece of paper with a stamp. No need to wonder why Spain has such low salaries for a high cost of living. A brutally unfair tax system remains fundamentally untouched, rewarding fraudsters and the wealthy whilst those with low to medium incomes bear the brunt of the tax burden.

Managing expectations and declining living standards for the majority of the population is the challenge. Spain's government has it hard in this respect, they have a spectacularly greedy and corrupt elite and little chance for the next few years of keeping the masses content with an asset bubble like the last one. I remember those on the right who used the ridiculous taunt that the left just wanted to redistribute wealth instead of creating it. How things have come full circle, this is effectively now how many European governments are working with the tiny detail that redistribution goes from the poorest sectors to the wealthy. There's no money to pay for anything you see, unless you represent part of that elite. Nobody travels down the toll roads built by your company, we'll sort that out with compensation which we can add to the deficit. You have this expensive and useless arms contract to pay for? We'll just slip a special provision into the budget to pay for that. You need a new hospital! Didn't you hear us when we said there's no money!

Spain never had a significant welfare safety net, but austerity has bitten a big chunk in what existed. Payments to dependent people, so they can be properly looked after, have been almost killed off. The PP always hated a measure that did so much to help some of the most vulnerable who should be shivering in the cold outside churches anyway. Pensions are declining, their real value undermined in a typically underhand manner, just at a time when unemployment means many households are dependent on the income of their retired members. Hundreds of thousands of people have been left without any guarantee of health care, with all the consequences for public health that this entails. Who knows how many habitable homes are kept empty whilst families lose their home because of mortgage evictions. Anything linking incomes to prices is being removed, a link never needed by those who can award themselves huge bonuses for each successive year of failure.

The pro-austerity party have got everything they asked for, although you sense it will never be quite enough. There will always be something lacking that stands in the way of the coming Spanish economic miracle. That final labour market change perhaps, although I did see a job advert on Twitter yesterday that advised anyone expecting payment not to apply. The gloomy economic predictions don't come from the anti-austerity side, they are produced by the same organisations and companies that championed the austerity process. Even their own economists don't believe the propaganda when it comes down to it. What began as a private financial crisis is still a private financial crisis and the critics of austerity have been been right about everything they said would happen. The real austerity disaster is that the people who got it wrong are still in charge. Determined to learn no fundamental lessons from the failures that caused the longest economic crisis since the 1930's, the only route they offer leads towards the next one.

Daddy, Will This War Be Different From The Last One?

La Razón this morning:

ABC 25th May 2012:

Yes son, this time it will be different. As I write these words crack teams of Catalan commandos are already advancing on Gibraltar:

Santiago Train Crash....The Accident That Should Have Been Avoided

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. 

Unemployment In Spain....Carry On Regardless

Another hilarious sequel with all your favourite characters. Mariano, as usual, has nothing to say. Laugh, we wish we could!

Voting With Their Feet

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.

Tramping The Dirt Down

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.

The Real Rajoy

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:

"A veces la mejor decisión es no tomar ninguna decisión y eso es también una decisión"

It's just not fair, how am I supposed to compete with this?

The (Other) End Of The World

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.

 

Spanish Rescue....Rajoy Speaks Out

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."

Questions?

The Mystery Of The Hole In The Wall

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.

Happy Anniversary

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.

Yes, it's been quite a year.

Seven Things That Really Annoyed Me About The Catalan Elections

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!

Catalan Elections....The Loser Is The Winner

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.

Catalan Regional Election Results 2012

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.

Despite All The Noise They're Closer Than You Think

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.

Cuando Gobierne Bajará El Paro

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.

Regional Election Results For Galicia And The Basque Country 2012

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!

Miss Me Yet?

Bullshit And Bulerías In Bankia

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.

 

Rato Leaves A Sinking Ship

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.