The International Writers Magazine: From our Spanish Correspondent
Quakes All Round
This month’s report kicks off with an emphasis on Europe rather than other major events around the world. The European Union is still recovering from UK Prime Minister, David Cameron’s speech last January, especially his threat to hold a referendum to ask the British if they wish to leave Europe all together.
Most of the continent’s politicians are even more perplexed seeing as Scotland has asked for its own go at the game by offering the Scots the chance for a break away from the English. Naturally the Catalans are pleased as punch, but we’ll get to them later. Meanwhile Italy has just had its general elections and is the ‘hot potato of the month’. The results have hit at the heart of the political scenario, especially the Eurozone that is still trying to sort out all the economic mayhem going on down South.
Why is Italy so important?
It’s the 4th largest economy and up until till now was ‘managed’ by a technocratic group led by Mario Monti that more or less set out some ground rules to kick start the economy. The stock markets and the press had concentrated on others and left Mario to get on with the job. The usual monotonous recipe based on severe austerity measures was introduced. However the whole scene has changed. We have a Pier Bersani’s Socialists in the lead but with flamboyant Silvio Berlusconi’s right wing group ready to take over the Senate. To add spice to the caldron an unknown anti everything and green party led by Beppe Grillo (a cricket in Spanish) is there in the middle to battle the whole lot. Poor old Monti’s group only achieved 10% of the votes. After all the work he did! As I go to press and the future Italian government is being sorted out, the European financial sector holds its breath. At the moment it's a stalemate and the Spanish Foreign Minister is not amused. "This is a jump to nowhere that does not bode well either for Italy or for Europe," Garcia-Margallo said, quoted by Reuters news agency. Taking all other factors into consideration, the question on everyone’s lips is whether the Euro will continue to survive.
So, let’s get back to Spain.
The country is still reeling over the corruption scandals that I reported in last month’s edition. I must admit that the situation is serious because it is hitting at the very heart of the nation’s integrity; the ruling government on the one hand and the monarchy on the other. Luis Barcenas, this character that had been the Conservative Party’s (ruling PP) accountant, is still up before the courts trying to explain how he managed to accumulate a vast fortune that subsequently ended up in Swiss bank accounts. Whilst the citizens of the country are following the trauma and the press is having a field day, the Socialists and most of the left wing parties have demanded the resignation of the Prime Minister, Sr. Mariano Rajoy and the whole of his government. Even the right wing press is questioning the government trying to find out exactly what is behind the whole scandal. The Spanish Monarchy is even in a worse position.
The King’s son in law Iñaki Undargarin that is deemed by certain sectors of society as ‘not being too bright’ is also before the courts but in his case there is real evidence that his ‘marketing’ company Noos was on a proper swindling and embezzlement path of public funds most of which were laundered and sent out of the country. He used his status as a member of the Spanish royalty to such a degree that the whole House of the Bourbons lead by King Juan Carlos I is now in jeopardy. Many left wing parties are demanding his abdication. To top it all, the King is a sick man and is about to undergo yet another operation for a slipped disk. More on this subject as time goes by.
Perhaps the worse blow has been the Vice-president of the European Commission for Economics, Olli Rehn who predicted recently that Spain would continue in a recession mode and would not grow economically until 2014. What is worse, unemployment will not improve and will reach peak at 27% of the working population. No need to mention the dramatic effect on the younger generation.
Protests, not yet violent, continue throughout the country because of the cutbacks and austerity measures. They include teachers, doctors, nurses, lawyers and even judges. Then there are those aimed at the banking system, especially the hundreds of thousands of small savers – reported earlier – that have lost their investment in the fraudulent issue of ‘preference shares’ masquerading as pension plans. These are backed by the thousands of employees who have lost their jobs because of restructuring and finally the lower end of the citizens that have foreclosed on their mortgages and have had eviction orders delivered by ‘not so friendly’ police. The main highlight to all this is that every other political party in the country is backing all these protests. Sr. Rajoy’s government is completely alone. So far we haven’t seen real rioting nor destruction of public of private property. See what happens next month!
Strikes are also on the move. The government has endured two general strikes since they took office and we will expect more over the next years unless, as reported on the corruption charges we see a call for new elections. The most obvious and recent one is Iberia that has left thousands of travelers without flights and stranded at airports. Again we are facing the reduction in costs by the airline due to drop in tourism, especially towards Latin America and competition from low cost airlines. The unions blame the cooperation deal with British Airways. Up until now they haven’t thrown in a claim for Gibraltar.
Back to Spain’s other real conflict, separatism.
No need to elaborate on the repeated report of Scotland’s referendum and the effect it is having on Spain’s Catalan, Basque country and Galicia all on the same wavelength of the ‘freedom for our people’ slogan seeking a divorce from the motherland. We even had a full blown rally in Santiago de Compostela, not far from where I live with members of every conceivable Spanish nationalist party and special invitees from the Scots and the Welsh parading through the regional capital. They all shouted their independence slogans and carried their flags in front of the famous cathedral and on to the HQ of the Regional government which happens to be conservative (PP). A fun day was had by all as a good Galician lunch followed after the morning outing.
However, all is not gloom in this Spain as the government has recently introduced measures, with the help of European funds for companies to employ Spaniards under the age of 30 by reducing social security and other payments thus alleviating any start- up costs of new hires. Yet another major positive introduction, especially for the hundreds of thousands of autonomous workers is the deferred payment of VAT at the issue of receipts until the goods or services have been paid. Up until now, many small businesses were going belly up, not only because of the loss of sales, but because they were unable to obtain VAT refunds until after months of haggling in the bankruptcy courts. The good news does not end here. Despite the protests, the government has finally come up with a plan to reduce salaries and other perks in all public institutions, especially town councils. Many councilors will lose their positions due to overlapping of duties with other town councils, the deputations and even the regional governments. There will be a ‘cap’ on mayors’ salaries. Although the revolts of those affected should be forthcoming in the near future - ‘halleluiah!’ - It is something I have been advocating for years!
As usual, updates as they happen.
© James G. Skinner. March, 2013.
Three Deadly Sins in Spain
It really started in February, 2009 when the left wing newspaper ‘El Pais’ uncovered a massive network of bribery and corruption that was codenamed ‘The Gürtel Case’ that stretched across several autonomous regions, including Madrid and Valencia, governed by the conservatives.