The International Writers Magazine: From our Spanish Correspondent
20th September update at bottom of page
Blaming Mrs Merkel
The holiday month is over and the Spanish Parliament, where all the normal bickering and outrageous lying takes place – no different to other democratic parliaments – is back. Nevertheless a great deal has been going in Spain and we're building up to a stormy last quarter of the remainder of the year.
I mentioned in my last month’s report on the possibility of outside intervention by the so called ‘Troika’ (IMF, Central European Bank and the EU Commission). The events since then have more than confirmed the same as Spain continues on a downward economic spiral that is practically out of control.What has changed is that the outside world has finally woken up and is beginning to focus on the real issues in this country that have caused this hidden catastrophe that could disrupt the EU and elsewhere. They are however, beyond the scope of this analysis as it would take more than a couple of thousand words to explain. Suffice to concentrate on the basics that are and always has been the erroneous institutional and geo-political system established after the Franco dictatorship. These were set up without a proper backup of audited financial control of the new autonomous (and town council) regions despite Spain’s miraculous non-violent transformation into a democracy over thirty years ago. Enough said as it is all ‘coming to light’ now that the money has run out and 17 independent parliaments are fighting for their share of an empty pot of money.
Spain - Rescued At Last?
The new government is running into trouble for a variety of reasons and has become a sort of ‘loose cannon’ with a bunch of ministers firing in all directions, ‘Wild West’ style. They cannot seem to pull the country together no matter how hard they try. In other words they seem to be screwing things up rather than resolving the main problems facing the nation. The opposition, and this means everyone, have likewise pulled out all the stops and reverted to a proper slugging match full of real venom, desperately trying to trip Rajoy’s team up in every possible way with the end result that nobody is going anywhere. The suffering population just watches in awe as ‘Rome burns!’ What is even worse is that the government has lied on its original electoral manifesto and this may eventually backfire on it in the very near future regardless of an overall majority at the polls that is meant to keep them in power for the next 4 years.
Take taxes for example.
Instead of reducing the public sector which means cutting out ‘duplication’ of government offices and slashing tax payer handouts to a plethora of institutions including the trade unions, the government has hit the lower end of the wage earners by increasing VAT to the extent that even the humblest of families are finding it hard to pay for such rudimentary items as school pencils and text books. The beginning of September will see hundreds of thousands of smalltime independent businesses drop into oblivion, from hairdressers to taxi drivers, due to this increase. The snowball effect is obvious; less consumer spending more Spaniards joining the dole queue. The tourist sector is predicting a drop in income as prices rise for a simple ‘tapa’ at a holiday resort and Europeans may shy away from the normal spending spree.
Another lie has been their promise to ‘never give into to ETA’ the Basque terrorist movement. In this case they have missed the boat because as I have stated in previous essays, ETA’s political sector, - Batasuna in all its disguises - is now well established in the regional government, town councils including San Sebastian and national parliament. The government has also given in to ETA itself. The possible agreement to release one of their prisoners (a notorious killer and kidnapper) based on medical grounds has infuriated the terrorist victims associations as well as the rest of Spain’s population that are still dead against any form of negotiations with the terrorists. Regional elections are coming up in October and chances are that a coalition between the PNV (Basque National Party) and ETA’s lot will win thus paving the way for total independence from Spain.
Another area that they have fallen flat on their faces is the most important of all; employment. As mentioned earlier, more and more companies are shutting down on a daily basis and some major industries are cutting back on staff. The underlying reason is that hiring is still expensive and the trade union stronghold on labor reform continues unabated. Rajoy’s government looks on in bewilderment as more and more youngsters either join the dole queue or emigrate. What is even worse is that most of the unemployed are now long term with an average of 2 years waiting for a job. Any skills they may have had have been superseded by new technology and therefore will need new training to enter the labor stream if and when the economy takes off again. As mentioned earlier if the ‘men in black’ come in and real government reforms are put in place even more persons, mainly civil servants will lose their jobs. Added to these negative figures is the banking saga itself. Until this latter issue is resolved, if ever it will, money is and will not flow towards private enterprise that needs credit; another must to kick start the economy.
Talking about the banking system there’s a sort of cat and mouse situation going on at the moment between the European Union and the government regarding the supposed loan of 100bn Euros to shore up the banking deficits. Believe me when I say that it is a real ‘dog’s dinner’ as nobody really knows exactly how much money is needed, who needs it and how it is going to be handed out. We’ve got the remains of the Savings Banks that I have written about so often in the past that is fighting for its life (those that are still around) and a certain sector of customers (tens of thousands of erroneous depositors in the purchase of irretrievable preference shares) that have a real battle going on trying to obtain a refund of their savings. According to the EU they’ll be lucky with the return of 20% of the value. Yet another shot in the foot is a recent report that has revealed that money is fleeing from the country by the bucketfull as more and more Spaniards escape a possible meltdown of the system. It sounds pretty scary but it’s true. I have friends and members of my own family questioning the ‘safety’ of their accounts.
How about the economy?
From the sublime to the ridiculous, just to give an example, Catalonia has asked for a bail out of 5Bn Euros or else it can’t face the music (Valencia and Murcia are following with similar requests) whilst Puenteareas, the town where my daughter lives needs an extra 3.2M Euros per annum just to keep the council going that includes the staff payrolls. The population is no more than about 20000 and is part of the 8000 councils around Spain. Heaven knows how many are in the same boat! As stated earlier a proper audit is underway to see how much money Spain really needs and where it has to be spent in the future. They are still building high speed trains that have hardly any passengers, gigantic airports with few flights and Olympic size swimming pools with no swimmers.
“The problem in the Catalonia region is profound, but the pace that it has been dealt with was slow,” said John Stopford of Investec Asset Management. “The bank bailout for Spain is far from sufficient to deal with the country’s problems.”
No need to carry on as it is all still to be brought out into the open once the ‘Troika’ takes over.
Social unrest is just around the corner. You’ve all read about a small town communist mayor and his ‘mates’ in Andalucía that ‘raided’ a supermarket Robin Hood style and filled carts full of food to give to the poor. Well they are now on a march throughout the region drumming up support and nobody is stopping them. All it needs is a contagious spark to be ignited in other parts of Spain and the inevitable is obvious. Tragedy is that the police force is victim of the cutbacks in salary and money and may not have the resources, such as petrol for their squad cars to control the onslaught. They spend most of their time fining drivers for parking infringements. It is nevertheless a good source of revenue for the cops’ coffers.
There is a subject that I have never touched on before and that is the media, specially the television stations. Apart from the public state (TVE) and regional stations (dozens of them) and counting out the paid channels, there are four main private Spanish television stations, ‘La 5’ ‘La Cuatro’, ‘Antena 3’ and ‘La 6’. All these stations are left wing orientated and obtain more than 80% of advertising revenue. The first two have entered into a joint venture and both the latter are about to do the same. All offer soap opera type programs. In the meantime a small independent station called ‘Intereconomia’ sprouted up about 5 years ago. This station is the only genuine right wing television media in Spain. It has been even taken to court by sectors of the Socialist Party (PSOE). This scenario is a typical indication on how the Spanish public has been subjected over the years to left-wing propaganda. However, with the future budget cuts coming down the road many of the regional stations will be up for the ‘chop’. This is yet another bubble about to burst from an economic as well as a political point of view.
Finally, why the title?
Well despite all the mayhem, most Spaniards feel that the blame for their woes lies elsewhere. It’s always been the case. Years ago, George Bush was the target for everything that was wrong in the world. The previous socialist government under the anti-American Rodriguez Zapatero made a habit of it. If anything went wrong internationally that involved Spain, the USA was always to blame. When Obama took over he had to drop his rhetoric because he felt the new democrat was one of his own breed. As one of his ministers said, ‘a planetary event has taken place’ now that Obama is in the USA and Zapatero is in Europe (she was referring to Spain’s six-monthly management of the EU Council of Ministers). That was a few years ago. When the economic crisis took off about four years ago the tone changed and Obama’s government was responsible. Since then, Spain’s government changed and Obama is now a good guy. The real baddy is Mrs. Merkel who keeps laying down the law on the present European money issue that will eventually affect Spain.
© James Skinner. September 1st 2012.
September 13th Update from James Skinner in Vigo - Spain
As predicted in my column about two years ago Catalonia has finally said that they will seek independence from the ‘mother country’. Brussels has warned them that they will be ejected from the EU and will have to start all over again if they wish to re-join. An independent right wing newscaster said that for the past 30 years, since democracy arrived in Spain, Jodi Pujol, the then Catalan President had embarked on a ‘hate’ campaign towards Spain that has finally borne fruit. They have literally imposed the Catalan language as the national tongue, have phased out any connection with Madrid (example banning bull fights and removing any tourist souvenirs like flamenco dancers from the shops) and are going their own way regardless of the present Spanish government’s plans to reduce the overall deficit and restore economic growth.
Even the Basque country has warned the Catalans to ‘take it easy’ as they – the Basques – are about to hold regional elections and although their own separatist movement is on the ‘war path’ a full blown independence campaign is not quite on the cards until the ETA situation is resolved; if ever it will be. In the meantime the communists are having a field day in Andalucía with this small town mayor rampaging through the region storming supermarkets to ‘rob from the rich and give to the poor’. Not much resistance; on the contrary lots of clapping and cheering as they march through the streets.
Well the situation continues to heat up in Spain with almost everyone against the government’s austerity program. Demonstrations, strikes, media reports, you name it; they’ve all got the knives out. Rajoy and his finance gurus ignore the warnings and continue to plod away with the EU and the ECB’s ‘recommendations’ to cut the deficit and thus allow the economic ‘bleeding’ to stop. However two recent events and one forthcoming attraction will set off further political fireworks that will add to the already confused mayhem that is taking place at the moment. Mrs Esperanza Aguirre, up until now the President of the autonomous region of Madrid, has thrown in the towel and resigned. She is probably the most revered and respected right wing politician this country has had over the past 30 years and is known as the Spanish Mrs Thatcher for her outspoken and usually un-minced words on every sector of the nation’s woes whilst running one of the only prosperous regions in the country. She suffered from breast cancer a year ago and her close friends reckon that the illness has finally taken a toll on her stamina and guts. A second and not so well publicised bit of news is that members of a relatively unknown and recent terrorist organisation (I’ve mentioned it before) in Galicia have been arrested after a massive raid right here in my own home town of Vigo carried out by the ‘elite’ national forces from Madrid. The result? Only last night yet another Molotov cocktail was thrown at a financial centre just across the road from where I live reassuring the Galician people that the movement known as ‘Galicia Resistance’ is alive and kicking. I even mention them in my novel ‘Serene Maiden’. Check out chapter 10 page 102 – Ordes, Corunna.
Finally the regional elections coming up in October in the Basque country and Galicia may further upset the government with a swing towards ETA’s final achievement of running the Basque country and a new government taking over in Galicia with the communists holding the key (golden) vote.
Rajoy is buying time until the regional elections in the Basque country and Catalonia (October 21st). I personally don’t think he’ll make it. Let's see what happens at the end of the month. I predict a new ‘interim’ government by the end of the year. Rajoy has burnt his bridges...
James Skinner - Vigo Spain
It’s very hard to understand the deep rooted economic woes of Spain. The whole mess started thanks to the 1978 Constitution when the country was broken up into 17 autonomous regions with their own budgetary control and the 8000 odd town councils were given similar power