Dawn

Dawn

Sunday, June 25, 2006

A reader has asked why I’m against greater devolution in Spain and why I believe the UK model is superior. Well, the short answer to this is that I’m not and I don’t. So I’m sorry if this is the impression given. In short, my view is that in a democracy it must be right to respond to local/regional demands for greater devolution of power. But, that said, I’m not convinced that what is actually going on is will be good for Spain in the long run.

Both Lenin and Trotsky [and Bismarck, I think] are credited with the aphorism that ‘Politics is concentrated economics’. Actually, they all stole it from Clausewitz. I quote it here because I think the issue of devolution is ultimately an economic and not a social, cultural or political one. As I say, I have no real idea as to whether current developments in Spain are for the best but what concerns me are 1. the actual/potential divisiveness to which it lends itself, and 2. the opportunity cost of it all.

To go back to the UK for a moment – there, with full Scottish devolution, the Labour party did what some observers think Zapatero is now doing in Spain; it made a major constitutional change for purely political reasons. In short, this was to entrench their position in Scotland and, thus, to give themselves a long-term political advantage in the UK as a whole. Reading the following comments only this morning, it’s easy to take the view that all this was very short-sighted and that it’s going to backfire on them. . . Devolution has created a serious constitutional problem for the UK. Like so many intractable problems, it has caught most politicians unawares, but it has been ticking away like an unexploded bomb for years. . . .The Scottish Parliament has become a byword for profligacy, incompetence and cronyism. The cumulative additional costs of devolution now exceed an astounding £1 billion. Few would claim it has added that much value.. . . .At present Scotland gets almost £5 for every £4 per head spent in England on public services. The Scottish Parliament has chosen to spend some of this extra money on providing universal free care for the elderly and on avoiding up-front university tuition fees. England enjoys no such benefits. English students pay higher [university] fees than their Scottish colleagues. Elderly people south of the Border have to pay for nursing care which is free in Scotland, and in some cases have been forced to sell the family home to do so. Is it any wonder that discontent and resentment are being generated? . . .Of the Scottish workforce, 23 per cent is employed in the public sector. Growth is sluggish and far too few new businesses are being created. Compare that with Ireland's tiger economy, where tax cuts have liberated enterprise and led to economic expansion and prosperity.

So, no I don’t think the UK is a good model at all. And it is this very divisiveness which I think is a risk for Spain now. Politics in Spain seems to me to have always been rather more ‘tribal’ than elsewhere and I doubt that the game of constitutional leap-frog which is now under way is going to lessen this. Indeed, some observers suggest that what Zapatero has done is to rip the lid off the post-Franco consensus that allowed Spain to make so much progress over the last 20 years or so. In other words, the old rifts in Spanish society are opening up again. I don’t think one has to be a ‘fascist’ or catastrophist to share these concerns.

As for immediate economic effects - an enormous amount of political time, energy and creativity is going into these constitutional issues. Given the underlying problems currently being masked by Spain’s construction and credit-driven boom, it’s arguable that these could be better devoted to other things. In short, it may be legitimate – and even inevitable – to respond to demands for greater regional autonomy but this surely incurs a significant opportunity cost. In the longer run, the country as a whole may pay a high price for this, even though Catalunia may get to keep more of its own money.

Finally, as for the process being ‘mature’, I must admit I have some difficulty seeing the current strained relationship between the government and the opposition in this light. Though this, of course, also reflects deep differences of view over how to deal with the ETA terrorist threat.

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