A Communication Problem

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.

Simiocracia

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.

via Graham Hunt

A Budget Which Will Change Nothing

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.

Rajoy's Andalucian Hangover

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.

Regional Election Results For Andalucia And Asturias 2012

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.

Managing The Deficit

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. 

Romans Go Home

I went to the cinema yesterday and in the toilets I saw a xenophobic piece of graffiti inviting British and American language teachers to go home. The graffiti was notionally in defence of public education but had of course missed the target. It's the Condesa de Murillo who is determined to further lower education standards by seeking to ensure that children are taught in the cheapest possible way in a language that most of them barely understand. To that end she wants to use native teachers as a weapon in her battle with the Spanish teachers. Unfortunately, the second part of the graffiti fatally undermined the case the author was trying to make. It went something like this (in the original English): 

"Stop stealing the Spanish from their jobs" 

 Remind you of anything?

Respect For The Victims

Next weekend sees the 8th anniversary of the Madrid bombings. In many respects it will be a normal Sunday. Football matches will of course be played, many restaurants will be open, theatres and cinemas too. It's really business as usual, you could argue about whether that's a good or a bad thing - but that's the reality. There will also be the institutional ceremonies to mark the anniversary. And there will be the habitual attempts by sections of the right-wing press and the Partido Popular to use the bombings as a political weapon against their opponents, and if possible to earn a bit of money from it in the process. 

This latter tradition has already begun, with a noisy campaign launched against the decision by Spain's trade unions to hold fresh protests against the government's labour market reform on March 11th. Government ministers and the Delegada del Gobierno in Madrid have claimed that the decision to hold the protests on this day shows a "lack of respect" for the victims. But surely, you'll be thinking, such a fuss is being made because it's not normal for demonstrations with a high political content to be held around the time of the anniversary of the bombings? Ah well, that seems not to be the case. It all depends who is doing the organizing. Did you spot the future prime minister?

All the talk about respecting the victims, coming from these people, is just a bit too much to take after 8 years of fabricated conspiracy theories. The largest association of 11M victims has already publicly disassociated itself from these pathetic attempts to use the victims of the bombings as a battering ram against the trade unions. But for those in the PP who like to claim to speak on behalf of the victims these people simply don't exist. The same victims association refused to swallow any of the conspiranoico nonsense that we have had to put up with for so long, with the result that they were denied public funding by those governing Madrid. 

Perhaps it was their refusal to use such public funds to organise fraudulent demonstrations against Zapatero's government that has always counted against them, as they preferred to use their resources to assist their members. It's as if they don't exist. Alongside all of those victims who still carry shrapnel in their bodies as a reminder of that fateful day in 2004. The conspiracy theorists insist that no shrapnel was used in the bombs that exploded, so that's a another group of victims whose very existence must be denied. With the greatest possible respect, you understand. 

Now I've never been a huge fan of those who have claimed that the Spanish right is somehow different from its European counterparts. Largely because such claims usually involve exaggerating the democratic credentials of the right in other countries to make the point. However, in the case of 11M it is the absolute absence of any kind of ethical baseline that does seem to mark a difference. I'll try to be fair, there are a few (far too few) on the Spanish right who find this repugnant exploitation of 11M to be too much and some have said so. The problem is that they are like voices in the wilderness, almost unheard. 

You look for some sign of someone saying "perhaps we've gone a bit too far this time" but it's just not there. The 'todo vale' ruthless cynicism that we see suggests that life in a moral vacuum doesn't seem to affect the health of those who live in it at all. Just their judgement. It's sad and tiresome. Sometimes I find it hard to believe that I'm still writing posts like this one after so many years of the same cynical, manipulative shit from these people. Then the new conservative attorney general throws a meaty bone to the hungry hounds by opening a formal investigation based on another piece of pseudo journalism from Libertad Digital. There will always be a few more bloodstained eurillos to be squeezed from inventing fake news stories, and a few more petty political points to be scored from Spain's worst ever terrorist attack. All because the subsequent election didn't turn out the way they wanted. That, you see, is what they call respect for the victims.

Where Público Has Gone Others Will Surely Follow

The closure last week of the paper edition of Público meant the end of the battle to preserve what may well turn out to be the last general interest printed newspaper to be launched in Spain. Público had never been profitable even though it did manage to establish a place in the newspaper market in its short existence, the paper was only launched in 2007. Indeed, it was almost unique amongst the press in Spain because the paper showed increasing sales at a time when the trend for most Spanish papers is very much the reverse. 

I bought it and liked it. There was definitely a market for a paper more to the left of the almost centrist positions generally adopted by El País. The problem was that launching a new daily newspaper in the age of the internet is a risky business. The crisis has had a savage effect on revenues from advertising that were already suffering from the shift of much of this revenue to the web. The strange thing is, given the times in which it was founded, is that the owners of Público didn't invest more time and resources on establishing their web presence. 

Público was of course part of a wider project, the attempt to build a media group that would rival the power of Prisa, the owners of El País. This project was headed by Jaume Roures, and the same people were behind the launch of the television channel La Sexta; which has now been swallowed by the owners of Antena 3. The length of the crisis, and perhaps the lack of any indications that it will soon be over, have meant that sinking more money into media and publishing operations no longer makes sense for Roures.

It was always slightly odd that a paper controlled by a wealthy media mogul like Roures would gift its readers with books by Marx or Lenin, although perhaps Friedrich Engels wouldn't have agreed with that appreciation. Now the employees of the paper wait to see how many of them will survive the closure, as the web edition of Público is still supposed to continue operating. Then there is the question of how those who will be fired will be compensated. It will cause considerable bitterness if Roures tries to use the newly reformed labour legislation to get away with reduced compensation for those sacked. 

There has been some undisguised glee at the closure in some sections of the right-wing press, celebrating a situation where only one left of centre national newspaper (El País) remains compared to four (ABC, El Mundo, La Gaceta and La Razón) on the right. These people are not, of course, those who will necessarily laugh last. There is little special about the case of Público and the situation of the rest of the press makes it highly likely that there will be further closures. I will be surprised if the four right wing papers still exist in their current form in two years time. Surely those who criticise public subsidy so frequently are not secretly desiring a bit of the same?

Vocento, the owners of ABC, and Prisa have both recently announced huge losses and the pressure is very much on in these companies to continue to cut staffing and reduce costs. El Mundo's Italian owners have written off a huge amount of losses from the Spanish editorial group and the paper has extended what were supposed to be temporary measures reducing salaries and costs. These are companies that have some financial cushion, over at the smaller ultra conservative Intereconomía the losses were already significant for 2010 and can be expected to be substantially bigger for 2011. Any viewers of their TV channel who foolishly handed over money in response to last year's appeal might as well just throw their cash into the deepest hole they can find; the result will be the same. 

Perhaps fusions or a wealthy and carefree sugar daddy might help to save some of these titles but the situation is unsustainable as it currently exists for one simple reason; the economic model that is needed to sustain a newspaper in the age of the internet has still not been found. Quality of the product is declining in those cases where there was any to begin with. The end of printed editions for many papers  is no longer a distant prospect, even in better economic times the revenue lost to internet is not going to return. This is a something that should be particularly worrying for those papers with the highest average age of reader (La Gaceta and La Razón in Spain), they are the ones who will lose more customers even if the magic solution for news delivery on the web is found. 

Waiting For The Great Leap Forward

Spain's ruling party, The People's Party, held it's 17th Congress last weekend as hundreds of thousands of Spaniards took to the streets in an unprecedented show of defiance to the hardline regime. The congress saw the re-election of Kim Jong Rajoy as party leader. Regime mouthpiece PPravda reported that Kim Jong Rajoy, normally referred to as the Dear Leader, was endorsed by an overwhelming 161% of party delegates. The paper compared this to the previous congress in 2008, when the party's leader only received the support of 142% of those attending. 

Speeches at the congress focused overwhelmingly on the dire economic situation of the country. Kim Jong Rajoy, in his acceptance speech, warned the country of hard times that lie ahead before leaving to take his afternoon nap. A controversial policy of sacking 80% of the Spanish workforce was presented to delegates as an important measure to assist job creation, under the slogan "We must first destroy in order to create". A new four year plan to revitalise the moribund economy was also presented. 

Bold new production targets have been set for key industries, notably those producing tear gas canisters, rubber bullets, police batons and other crowd control materials. Other key modernisation policies include the mandatory use of shackles in the workplace. Party officials pointed out that these shackles were made from highly resistant plastic rather than the more traditional iron. Another sign of the country's technological prowess, they claimed. Important changes were also announced for workers salaries. Delegates at the conference unanimously supported a motion describing the monthly salary as an outmoded, petit-bourgeois concept. 

One notable absentee from the congress this time was Francisco Camps from Valencia. A hero of the previous congress, which was held in Valencia, Camps has since fallen into disgrace following the discovery of unspecified irregularities at the Number 4 Suits R Us factory. Kim Jong Rajoy left almost immediately following the congress for talks with the regime's key allies in the Eurobloc Pact. German and French leaders provide occasional assistance to prop up Kim Jong Rajoy's regime under the strict condition that the only beneficiaries of this aid should be the banks.

Esto No Es Crisis, Se Llama Capitalismo

 No commentary necessary - via Graham Hunt

Gallardón The Moderate

When Mariano Rajoy announced his new government in December there were some who chose to see it as a selection of moderate, almost technocratic, ministers. The reality is that Mariano made his ministerial choices on the basis of loyalty to Mariano above all other considerations; apart from the now obligatory inclusion in a senior position of a banker. Only two months later, the idea that this is a moderate administration is already very difficult to sustain. Take the case of the justice minister, Alberto Ruiz Gallardón. As mayor of Madrid he was of course rightly famous for having bankrupted the city and for having won a gold medal for failed Olympic bids. But he was also seen as a centrist politician capable of reaching out to those voters who disliked the fundamentalist, taliban wing of the Partido Popular. 

The trick worked well for quite a few years, but it was just a trick. Gallardón's mask started to slip before he made the leap to national politics, the papal visit last summer saw him enthusiastically joining the competition to hand over as much of Madrid as possible to the Pope and his pilgrims. Now installed as a minister, it is Gallardón who will steer through what promises to be a thoroughly reactionary abortion law reform. Quite possibly taking us back to the position of the 1980's when women wanting an abortion and health professionals could never be absolutely sure that what they were doing was legal. Just the sort of precarious ambiguity that suits the PP on issues like this. 

Gallardón, who has never hidden his ambition to lead the PP and who prospered under the patronage of eminent Franco-democrat Manuel Fraga, is now perhaps more concerned about winning over those still to his right. So, yesterday, it was Gallardón who led the charge in defence of the brutal police violence we have seen in Valencia in the last few days. Fully equipped riot police beating up school kids has led to some shocking scenes, but the moderate Gallardón sees none of this. Instead he would have us believe, alongside the ever more servile right-wing press, that it is all the work of anti-system radicals intent on attacking the police. Oddly enough, as the riot police were withdrawn yesterday, there was an outbreak of entirely peaceful protest in Valencia. It's almost a perfect portrait of the way that region is being run, kids and their parents who protest about having no heating in their schools get beaten by riot cops whilst the corrupt political leadership who don't pay the heating bills continue to go peacefully about their business. 

It's fairly clear that the new government has let the police off the leash in dealing with any protests against the severe cutbacks being implemented by Rajoy's administration. In Madrid Esperanza Aguirre was threatening to form her own regional police force last year, as the then PSOE administration refused her repeated requests to crack heads in the Puerta del Sol. In compensation for not getting her own private police force (a truly frightening prospect), she instead got one of her people installed as the Delegada del Gobierno in Madrid, the government's local representative. The change is already being noted with the police putting any meetings of the 15M movement held in the Puerta del Sol under intense pressure. 

The excuse for this pressure on protest movements is that such actions have not been authorized by the government. It's a common PP refrain that the 15M activities are illegal because they do not ask for permission. Back in the real world there is actually no legal requirement in Spain to ask those in power for permission to demonstrate - just as well! The Spanish constitution guarantees the right to assembly and there is only a legal requirement to communicate the intention to meet if the event in question affects the use of areas of public transit. Failure to communicate this isn't even a serious crime, the penalty would be a fine. But for the right it's sufficient excuse to send in the riot police, and to use the law when it suits them to use it. Sports fans who come on to the streets to celebrate their team winning a trophy are unlikely to be baton charged by the police. 

Occasionally, very occasionally, the police are forced to account for excesses. With huge media coverage of the violence they used against peaceful protestors in Barcelona last year a judicial case against the senior officers responsible on the day is leading to the possibility of a trial. But will it matter? In 2009 five Catalan police officers were found guilty of mistreatment and illegal detention. Oh, I almost forgot, they were found guilty of torture too. The details of the case are appalling. Last week the PP government pardoned them and they will soon be back on duty 'upholding the law' with no penalty of any kind. How safe does that make you feel? The more you hear the vacuous rhetoric about how we are all equal before the law, and we hear it a lot these days, the less likely it is to be true. Meanwhile, let's not forget that the moderate Gallardón is STILL on the left of his party.

From Vergara in Público:

The Time Machine

If you want to know how life was before the internet, you don't really need to travel through time or even go any further than last Sunday's Goya film awards in Madrid. For the president of the Spanish film academy the web is still a thing of the future, not of the present. Just as well for him, then, that one of the first acts of the Rajoy government was to approve the regulation of the anti piracy Ley Sinde. Spain's cinema industry can still continue to regard the internet as the enemy, rather than as a business opportunity.

The trouble is that the new government may not be helpful in other ways. There were several references in the ceremony to the important role played by the national television company, RTVE, in the production of many Spanish films. That could well be about to change, the state broadcaster is in deep financial trouble with the future of many of its flagship programmes in doubt. The Partido Popular has little sympathy for the Spanish film industry in general, some remarks in speeches at the ceremony about not forgetting the victims of Franco's repression or in defence of public education were unlikely to go down well with the PP politicians present.

As for the awards themselves, the big winner this year was Enrique Urbizu's thriller No habrá paz para los malvados (No Rest for the Wicked). The result was a little unexpected, this year's ceremony was supposed to be one of reconciliation between the academy and Pedro Almodóvar, the latter having decided to show up this time in the expectation that someone would scream "Peeedrrro" from the stage when the award for the best film was handed out. But La piel que habito (The Skin I Live In) didn't do particularly well as some of the major awards went to Urbizu's film.

No habrá paz para los malvados is one of the few nominated films that I've managed to get to see this time. It's not a bad film, and Jose Coronado was a worthy winner of the best actor award for his portrayal of the corrupt cop attempting to deal with the only living witness of his crimes. But in general I found the film a bit difficult to follow, nor is the idea behind it so original for it to stand out. I can't compare it with the Almodóvar film, because the accumulated prejudices of the past few years (with the sole exception of Volver) mean that Pedro's latest release usually ends up near the bottom of my list of films to see.

Yesterday I went to see Iciar Bollaín's latest film, Katmandú un espejo en el cielo. I like most of her work but had lower expectations of this story concerning the attempts of a Catalan teacher to set up a school in Kathmandu for poor children from the shanty towns. Inspired by, rather than directly based on, a true story perhaps it was the trailer that led me not to expect too much. Looking like a mixture of Himalayan travelogue with a bit of social content mixed in. You shouldn't rely too much on trailers, and the film is significantly better than that image although still lacking for me the impact of other Bollaín productions like También la lluvia or Te doy mis ojos.

What's The Matter, Lost Your Sense Of Humour?

When thousands of Spanish football fans made monkey chants every time a black player touched the ball, this was of course hysterically funny and only a few humourless hypocrites failed to get the joke. Equally, who could forget the fine, subtle irony displayed by the Spanish basketball team pretending to be Chinese by stretching their eyes? But then a French puppet show makes a joke about one of Spain's poor defenceless millionaire tennis players and this is an unacceptable affront and official government complaints must be made to the French authorities.

Body Language

It's not hard to see why Mariano Rajoy's minders are doing their best to keep their man out of public view. Spain's prime minister had his first European summit this week and displayed his absolute lack of communication skills. Not that he practices very much. Say what you like about Zapatero, he knew how to look an audience in the eye and speak to them. Even if he was constantly moving his imaginary box from one side to another. Rajoy always looks as if he can't wait to get away, and as if he has a bad taste in his mouth. 

When he was officially greeted in Spanish by Herman Van Rompuy, who is allegedly someone important in the EU, Rajoy couldn't even muster a smile of acknowledgement. Instead we got the Mariano grimace and that bad taste again. The only time he smiled was when he told the Finnish prime minister that the imminent labour market reform would cost him a general strike. The remark was not intended to be reported and someone had to go and wake up Spain's union leaders to tell them what was expected of them. The outcome is that they are now almost obliged to call the strike, otherwise they'll make Rajoy look stupid!

If you want to know what plans Spain's government has for the economy then you really need to read the foreign press. The economy minister (or should that be one of the economy ministers?), Luis de Guindos gave quite a precise description of the content of the proposed labour market reform to the Wall Street Journal. All of which is curious when you consider that no such description had been offered to the Spanish people, and when the details were supposedly still being thrashed out between employers and unions. It's all part of the game, the content of this reform is said to be part of the letter sent to the Italian and Spanish governments prior to the European Central Bank acting to reduce pressure in the debt markets. We know the Italians got the letter, but both Zapatero and Rajoy have been allowed to act as if they are just deciding themselves to implement these measures instead of being told what to do. 

Captain, This Ship Is Sinking!

"Lo primero, el empleo" was the Partido Popular's slogan in Spain's recent elections. There's a "des" missing somewhere from that phrase. Today's unemployment figures here are once again dramatic. 22.85% of the workforce, 5.273 million people unemployed. There is now a serious expectation of Spain hitting the figure of 6 million unemployed, and that could even happen in 2012 on current trends. How distant now seems the time when a total of 4 million unemployed was regarded as an awful, unacceptable, prospect.

Is the 6 million figure alarmist? Well, let's consider what is likely to be the result in employment terms if the IMF's recent forecast of a 1.7% decline in the Spanish economy for this year turns out to be accurate? A deliberately provoked recession which can only lead to greater destruction of employment, and today's figures demonstrate clearly that the rate of that destruction continues to be enormous. But if that sounds bad, there is a further problem to consider. The IMF's estimate, and the Spanish government's own 1.5% estimate, don't take into account the likely effects of the additional 2% deficit reduction that is being demanded following the overshoot on 2011's deficit target.

Those extra 25000 million euros of cuts which have to be made if the deficit target for this year is to be met can only accelerate the terrible downward spiral. You cut more, your tax income decreases further whilst social spending on unemployment goes up. So you need to cut even more, your national debt increases instead of decreasing, you miss your deficit targets anyway and where do you end up? In the same position as Greece, Portugal and Ireland. It's not as if the outcome of all of this is a mystery any more, this has been happening in all the countries which have been "rescued" by the EU.

The Spanish government knows this will happen, and behind the scenes is believed to be attempting to negotiate a relaxing of the relentless drive towards austerity madness. Whilst officially denying it. Even the IMF, for god's sake, has finally woken up to what is really going on and warns that no good will come of this. The Bank of England, of all institutions, releases a report on the need for a new international framework to stop one financial crisis after another from wrecking the prospects of economic recovery. It's probably at least 20 years late but hey! 

However, those who continue to sail complacently towards Fantasy Island on the always tranquil waters of the Sea of Fiscal Consolidation and Structural Reform remain oblivious to the perfect storm that is forming. Meanwhile Captain Rajoy was about to help the most disadvantaged passengers off the ship when he slipped and fortuitously fell into a passing lifeboat. Now he sits in a deckchair on the shore with his copy of Marca on his lap telling people that he will do what needs to be done. It's a terrible, man-made, shipwreck.

There Ain't No Justice Part 1

Time for a South of Watford mini-series on what is already promising to be a vintage year for the Spanish judicial system. I'm hoping that putting numbers on the instalments will give me sufficient impetus to follow up with the rest but there's no guarantee of that. It might just end up like one of those Spanish TV series that gets abruptly cancelled, or it could go on for ever. It's not like there's a shortage of material.

Let's start with the case of the man who we may yet have to refer to again as the Molt Honorable Francisco Camps. Acquitted yesterday by a Valencian jury of having accepted free gifts of clothing from the organisers of the Gürtel corruption ring, Camps has won what was an almighty gamble. Whilst two of his fellow accused previously declared themselves to be guilty as charged on the (ill judged) assumption that the Molt Unpredictable was going to do the same, Camps decided to bet on a jury trial getting him off the hook. 

His fellow defendant, Ricardo Costa, wisely didn't take Camps on his word and went to trial too with the result that he has also been acquitted. After a trial lasting several weeks, the nine member jury voted 5-4 for acquittal last night just in time to go off and watch the Barça-Madrid game. All of this in spite of extensive evidence having been presented of the relationship between Camps and the Gürtel ringleaders, and the evident attempts to manipulate crucial documentation in favour of the accused.

There are now many critical of the decision to leave the verdict in the hands of a jury, with claims that a more professional tribunal would never have acquitted the two men. I'm not convinced about this, after all I remember the example of judge De la Rua and with a post pending on the Spanish Supreme Court's continuing vendetta against Baltasar Garzón I'm not sure this is the moment for praising the detached professionalism of the judiciary. Juries can deliver seemingly perverse verdicts, but so can judges with decades of experience.

Perhaps, given the apparent willingness of voters in Valencia to vote for the corrupt, there could be a case for such trials to be held outside the area of influence of the politicians concerned. But then Spain's decentralized judicial system doesn't generally allow for that. We also have to take into account the separation of the case concerning the clothes from the much meatier part that concerns the possible illegal financing of the Partido Popular in Valencia via the Gürtel companies.

Ironically, the acquittal of Camps creates something of a headache for Mariano Rajoy. Having taken some tentative steps to begin a clean up of the festering swamp that the Valencian PP has become, he would send a terrible signal if Camps was to be restored as regional president. But the latter is still a member of the Valencian parliament. It's notable that there are no Valencian politicians in Rajoy's administration. Rajoy obviously has the power and patronage to put Camps in a cozy position where he can do little damage and that should probably be somewhere far from Valencia. Given that Esperanza Aguirre shows such little interest in being Spanish ambassador in Kazakhstan, perhaps a suitable position could yet be found for Mariano's old friend Paco Camps?

The Supreme Leader Is Dead, Long Live The Dear Leader!

Silence descended last night on the deserted streets of the Spanish capital Madrid, as inhabitants of the country tried to come to terms with the death of Kim Don Manuel, known to all as The Supreme Leader. Reliable information is hard to come by in such a secretive regime, but it is rumoured that Kim Don Manuel had been ill for some time so his death at the age of 167 came as little surprise.

Although official media reports talked of many people crying today on the bleak wintery streets of Madrid, correspondents from outside have pointed out that it was in fact raining steadily all day. Regime supporters went so far as to claim that even the sky was in mourning for The Supreme Leader. All state publications today carried the same glowing tribute from The Dear Leader, Kim Jong Rajoy, to the dead man, although some foreign observers couldn't help noticing that the article made no reference of any kind to the role of The Supreme Leader in the terrible years following the brutal civil war that tore the country apart in the 1930's. 

The two men were not believed to have been close. Indeed, unnamed sources close to the regime have confirmed that Kim Don Manuel disliked Kim Jong Rajoy. At one point The Supreme Leader even banished Kim Jong Rajoy from his native province of Galicia to work in a menial job registering properties in the remote, semi-desert, province of Alicante. Only after his subsequent confession of vaguely worded crimes and following the accession to power of The Greatest Leader Comrade Aznar was Kim Jong Rajoy rehabilitated and permitted to return to active political life.

Kim Don Manuel was known for his legendary achievements, including his famous espousal of regular bathing in heavily radioactive waters to show support for the country's allies and to promote the ailing tourist and nuclear industries.

The Return Of The Invisible Man

Rumours that Mariano Rajoy had been kidnapped were clearly exaggerated. The great man finally emerged from hiding this week to give his first media interview since allegedly being elected as Spanish prime minister in December. There is even the possibility that he may deliver a press conference in the not too distant future, although it's unlikely on past form that he will accept any questions. Despite this silence, Rajoy still had the nerve in his first interview to claim that he would not be hiding from the crisis.

The pre-electoral strategy has been continued, and it seems that Mariano doesn't really want anyone to notice he's there. It wasn't him who had to explain the government's first package of tax increases and spending cuts this week in parliament. That package marked quite a turnaround from the unsustainable position that Rajoy's administration had held even after the election. Who is in charge of the Spanish economy? Officially its Rajoy, that's why there is no vice premier in charge of economic affairs. But then we have ex Lehman Brothers boss Luis de Guindos as economy minister and Cristóbal Montoro as minister for taxing people. Rumours of tensions between the two ministers have already emerged, and it is said to be Montoro that claims the seat at the head of the table for meetings on the economy when Mariano is off doing whatever it is he does.

It's funny how all that convenient dogma about reducing taxes to increase overall government income goes so quickly out the window when it comes to the crunch and the government needs to raise some serious money. Likewise all the rhetoric about squeezing the middle classes, which the PP used so extensively when the PSOE administration raised taxes last year. A fine collection exists of declarations, many of them quite recent, from senior PP figures on just how wrong it is to raise taxes to deal with the consequences of the crisis.

They now try to hide the dramatic turnaround behind the argument of the "herencia recibida", that the outgoing government concealed the true nature of the budget overshoot from them. The problem is that by far the greatest part of this overshoot comes from the regional governments, and which party controls almost all of these? The Partido Popular of course. It's possible, though unlikely, that they don't talk to the people in charge of their regional governments. It's also possible that the PP regional presidents have lied to the national leadership about the state of their finances. That has a more believable ring to it.

Despite the apparently progressive nature of some of the tax increases, the overall burden of paying for the crisis still falls on wage earners and the recipients of public services that are being slashed. The seriously wealthy in Spain don't pay income tax, they have numerous ways of getting around that. The only promised tax cut that has still been maintained is the potentially damaging subsidy from those who don't have mortgages to those who do. An odd thing to do when the government is trying to force the banks to accept the overdue downward revaluation of their unwanted property assets.

Meanwhile the association of tax inspectors has calculated that all of us who do pay our taxes are paying an extra €800 a year to fill the gap left by those who don't. They also say that reducing the submerged economy by 10% of GDP (probably less than half of what it currently takes) would increase government revenues by €38500 million, a figure which very nearly matches the estimate of total cuts required for this year. Instead the government has opted for what they present as an ambitious anti-fraud programme which, er, has a target 20% below that which was achieved last year.

At the same time the spending cuts are accompanied with widespread press coverage of all that wasteful spending from the boom years. The problem is that its not the airport without planes that is closing in Castellón as a result of the cuts, it's the schools. Nor do the cuts seem to be affecting a Valencian Formula 1 contract that is almost as expensive to cancel as it is to continue. This latter region, controlled for years by the PP and systematically ransacked in the last decade, is emerging as the leading candidate for basket case status. It seems that the national government had to step in to guarantee loans there in the first week of January. 

The worst is still to come. The combination of tax increases and budget cuts so far announced only accounts for around €15000 million of the estimated €40000 million total for the year. As predicted, the main pain will be announced only once the Andalucian regional elections (to be held on March 25th) are safely out of the way. Despite the servile pro-PP press coverage about how Rajoy's actions have stabilised the situation for Spain, this in reality has far more to do with the European Central Bank throwing vast sums of cheap money at the financial system. The ratings agencies have already given signs that they intend to keep up the pressure. How long will it be before a Spanish downgrade is needed because of the poor prospects for growth that result, of course, from the very same policies that the ratings agencies themselves have advocated? The casino will be the last place to turn the lights out.

Walking In Lanzarote

I'll be away for the next few days doing some walking in the island of La Palma, my first time there. So I leave with an account of last year's trip to Lanzarote, done at the same time of year. Lanzarote may not be as famous for trekking as islands with higher peaks or forests like Tenerife, La Gomera, El Hierro and La Palma, but we thoroughly enjoyed our time there and did much better walks than we had expected.

Day 1 began with not much walking going on. In the national park of Timanfaya you have to leave your car in the parking area and then get on a bus to be taken on a route around the area of the extensive volcanic eruptions that took place in the 18th Century. It's still a volcanic desert, but a spectacular sight. 

A short distance down the road from the Timanfaya interpretation centre there is an area of the park where you can do some walking. The Caldera Blanca is a beautiful, and reasonably easy, route to do. Once you find the path from the parking area it's hard to wander off it, at least whilst you are walking through a sea of jagged lava. Despite the path it's still a good idea to wear boots or strong shoes. The Caldera Blanca is the one at the back in the photo below.

There is some climbing involved to get up to the crater, and if you want to make the route a bit more difficult, as we did, then you can descend down into the crater itself. I wanted to check out the stone rings in the centre. I suspect they are not very ancient.

We did a full circuit of the crater with fantastic views along the coast and into the interior of the island. It's a route that can be done comfortably in 2-3 hours and was a great introduction to the volcanic landscape of Lanzarote.

On the second day we moved to another island. La Graciosa isn't very big, has only two villages and a few hundred inhabitants, and is just a short boat trip away from the the northern part of Lanzarote. This is the capital!

We set off into the interior of the island without worrying too much about following a path or even having a fixed objective. Others hire bikes or even Land Rovers to take them around the island, but we just went over the low hills in the centre. Once again, the views were spectacular and the weather was perfect.

On the other side there is a wild Atlantic beach, with waves to match. Although conditions were calm this is not a very safe place to go in too deep, there is a strong undertow. But the day, and the walk to get there, made it hot enough to go into the water. 

We walked back using the road that cuts across the centre of the island, much quicker but with poorer views. La Graciosa has a low key charm, and is a place where I could happily spend 2-3 days. 

On our third day we went to a part of Lanzarote known as Los Ajaches. Nowhere on the island goes much higher than 600 metres, but in this area we did a relatively tough circular walk taking us from the hills higher up down to the coast and then back up again.

The reward for the effort was another day of fantastic weather and excellent views of the island. The landscape, as with much of the island, is fairly barren. Nobody comes to Lanzarote for the Atlantic cloud forest. But we could see the coast on two sides, including views of neighbouring Fuerteventura.

We were based for the trip in the beach resort of Playa Blanca. It's always entertaining to stay in a place like this on walking holidays, people preparing for a day by the beach stare in wonder at the Martians who eat their breakfast wearing full trekking gear. It was a good place to stay, a beer by the sea after a day's walking always gives things a different perspective. La Palma I expect to be a bit different.