Thoughts from Galicia: 29.9.17

Spanish life is not always likeable but it is compellingly loveable.

- Christopher Howse: A Pilgrim in Spain. 

If you've arrived here because of an interest in Galicia or Pontevedra, see my web page here.

Life in Spain

• Cataluña: Ambrose Evans-Pritchard sees the utter mess there as being an existential threat to the EU. See the first article below this post for his rationale. Which seems accurate to me. As you can see, like everyone except the idiots on the PP party's right wing, AEP thinks the Spanish president, Mariano Rajoy, has made a complete pig's ear of the challenge. To everyone's cost. An interesting weekend ahead.
• This is an excellent review of the Spanish economy, in video form. It emphasises the macro/micro divide I bang on about regularly.
• I mentioned yesterday the (individualistic) Spanish attitude to rules. Basically: If a rule inconveniences me, it doesn't exist. Later that morning, I was walking along the riverside path toward Pontevedra's old quarter when I was confronted by a mother and her young son on their bikes, she on the parallel cycle path but he beside her on the pedestrian path. Even when I gestured (politely) that he move onto the cyle path, he didn't. Just looked at me, bewildered. His mother said nothing. Spaniards learn early to ignore people to whom they have no duty of care/consideration. Basically, everyone they don't know . . .  In Germany and Holland, by the way, you will be mown down, if you're dumb enough to walk on a cycle path. Here, no one cares. A different universe.
• For Spanish speakers, here's an article from El País about Spaniards in the UK who back Brexit. And here's the English version I've just noticed . . . 

Talking of the EU . . .  For those readers who don't understand my aversion to it, I offer the 2nd and 3rd articles below. The first of these is as close to an encapsulation of my views as you're likely to get. It's the vision of the future thing, as some US president might have said. Sweet FA to do with backward-looking hankering for a restored empire, or with racism - the rather pathetic calumnies of those - in the UK and elsewhere - who oppose Brexit. Of course, the Catalan situation addressed by AEP in the first article does nothing to undermine my belief that the EU is an over-ambitious dream of out-of-tune technocrats which is doomed to failure. And that it is already dying under the weight of its internal incongruities. But that's just my view. Everyone is free to differ. Time will tell . . .

Here in Galicia, La Crisis has led to a pile of 'regularisations' - measures aimed at ensuring that rules are followed and tax revenues maximised. We've had the municipalities using drones to check on property improvements and now there are inspectors in the fields checking on who's involved in the wine harvesting, and how. The peasants are almost revolting against this campaign to ensure the payment of income and social security taxes.

Finally . . . After they were fined almost a million euros, the ferry operators found guilty of taking too many people to the Atlantic Islands off our coast are complaining that they're being 'criminalised'.   It seems they need course 101 in the operation of the law.

Today's cartoon:

The Times' view of Jeremy Corbyn's reception at the Labour party annual conference in Brighton. It's a play on a famous poster of the 1930s:-

ARTICLE 1

Spain threatens to break up the euro unless Catalonia comes to heel:   Ambrose Evans-Pritchard

While the EU watches in disbelief, a remote threat has mushroomed suddenly into an existential crisis. It is even more intractable than Brexit, and certainly more dangerous.

The volcanic events unfolding by the day in Catalonia threaten the EU project within its core. They pose a direct threat to the integrity of monetary union.

Former French premier Manuel Valls – son of a celebrated Catalan painter – warns that if this weekend’s banned vote on independence goes ahead and leads to Catalan secession, it will be “the end of Europe” as a meaningful mission.    

Those old enough to remember the Spanish Civil War can only shudder at TV footage of crowds across Spain cheering units of Guardia Civil as they leave for Catalonia, egged on with chants of “go get them”.

As matters stand, 14 senior Catalan officials have been arrested. There have been dawn raids on the Catalan Generalitat, including the presidency, the economics ministry, and foreign affairs office.

Officials preparing for the vote have been interrogated. The Guardia Civil has been deployed to seize ballots sheets and to prevent the referendum from taking place, if necessary by coercive means.

The Catalan security forces – Mossos d’Esquadra – have told the Spanish authorities that they will not carry out orders to shut down voting sites if this leads to civil disorder. Their higher duty is to Catalan cohesion, or "convivència ciutadana". It is defiance, a little like the British Army’s Curragh Mutiny in March 1914.

The government of Mariano Rajoy insists that the Guardia Civil is being sent to preserve the constitutional order and inviolable integrity of Spain.

Catalonia’s leaders call it fatally-misguided repression that risks spinning out of control. “We will never forget what has happened. We will never forget this aggression, this prohibition of opinion,” said Carles Puigdemont, the Catalan leader. The contrast with the Scottish referendum in 2014 is self-evident.

Markets have yet react to this showdown even though the Spanish finance minister, Luis de Guindos, has openly warned that Catalonia will suffer a “brutal pauperisation” if it presses ahead. He said the region would suffer a collapse in GDP of 25pc to 30pc, a doubling of unemployment, and a devaluation of up to 50pc once it had been thrown out of the euro.

This is a threat, not a prediction. Such a collapse would occur only if Spain chooses to bring it about by making life hell for the Catalan state: by closing its economic borders, by using its veto in Brussels to ensure that Catalonia cannot rejoin the EU or remain in monetary union, and by blocking Catalan accession to global bodies such as the International Monetary Fund.    

The problem for Spain is that if it acted in such a fashion, it would bring a commensurate catastrophe upon itself. Catalonia is the richest and most dynamic region of Spain – along with the Basque country – and makes up a fifth of the economy.

Such circumstances would entail a partial break-up of the euro, re-opening that Pandora’s Box. The status of Spain’s sovereign debt would be unclear. Why would the Catalans uphold their share of these liabilities if subjected to a boycott?

Markets would have to presume that the debts of the rump kingdom would no longer be 99% of GDP but more like 120%. This burden would be borne by a poorer society and one that would necessarily be in an economic slump itself.

The Bank Of Spain played down the crisis on Thursday, saying only that Spanish borrowing costs would rise if tensions worsened. “It would initially affect the sovereign risk rating, and afterwards spread through other interest rates,” it said. So far the silence from the rating agencies has been deafening.

It is not for foreigners to take sides in a historical dispute of such emotion, drenched in mythology, with the wounds of Franquismo and Las Jornadas de Mayo raw to this day. Catalan nationalists date the original sin to 1714 when Philip V abolished their institutions and imposed Castilian laws – and absolutism – by right of conquest.

What seems clear is that Mr Rajoy and his Partido Popular have  provoked a Catalan backlash by blocking enhanced devolution that had already been agreed with the outgoing Socialist government. What the Catalans want is a settlement on the Basque model with their own budget and tax-raising powers.

Mr Rajoy then exploited the eurozone banking crisis to try to break the power of the regions, forcing Catalonia to request a €5bn (£4.4bn) rescue even though it is a net contributor to the Spanish state. He has since hid behind mechanical legalism.

You might equally blame the Catalan nationalists for charging ahead with a referendum barred by the constitutional court, creating a mood of division between ‘Remainers’ and ‘Leavers’. Yet they were sorely provoked. Mr Rajoy’s heavy-handed response has since been so inept that he may have created a majority for independence where none existed before.  

The problem for the EU is that it is a prisoner to legal rigidities. Commission chief Jean-Claude Juncker has had to back Mr Rajoy and the Spanish constitutional order because that is how the EU system works. This has made Brussels a party to alleged abuses in Catalan eyes.

Barcelona’s mayor Ada Colau – who opposes secession – has called on the EU to “defend the fundamental rights of Catalan citizens against a wave of repression from the Spanish state". 

“Europe cannot allow itself to adopt a passive position over the Catalan question, seeing that the events going on in Barcelona are affecting Paris, Madrid, Brussels, and Berlin alike,” she wrote in the Guardian.

We will find out on Sunday whether or not the Catalan people turn out to queue defiantly at locked polling stations, manned by the Guardia Civil. A declaration of unilateral independence is not yet “on the table”, said Mr Puigdemont. Not yet.

The EU is in a horrible bind. It faces a rule of law crisis in Hungary and Poland. It faces an East European revolt over migrant quotas. Its relations with Turkey have turned hostile. Now Spain is threatening to break up the euro unless the Catalans come to heel.

Brexit is surely the least of their problems, and one that can be solved so easily with an ounce of common sense.

ARTICLE 2

Emmanuel Macron’s ‘inspirational’ EU dream is actually an authoritarian nightmare: Allistair Heath

One of the great pathologies of British politics, at least since the Fifties, has been our strange refusal to understand European integration. We keep telling ourselves that the EU is a transactional relationship, a “trade block”, a means of boosting our mutual GDP, of making it easier for British banks and German carmakers to do business. The entire post-Brexit referendum debate in Britain has continued to be conducted along such absurd lines.

Whenever bemused Europeans tell us that we are missing the point, that EU integration is a historic project to build a new civilisation, we cannot compute. We laugh nervously, stick our fingers in our ears, and go back to arguing about how the EU should focus on trying to semi-liberalise the market for purple widgets.

French énarques, who pride themselves on Cartesian rigour, have a theory for why Britain is unable to face facts. They believe that, as befits a conservative nation obsessed with evolutionary change, that hasn’t undergone a proper revolution since 1688, we are overly practical.

We are accountants and shopkeepers who cannot comprehend grand theories or abstract concepts: in effect, Brexit was a rejection of a philosophy we never understood. The French specialise in the general; we focus on the particular, and neither side understands the other.

That is why anybody who cares about politics should read Emmanuel Macron’s speech on the future of Europe. His agenda is striking: he wants more new bureaucracies, a centralisation of the setting of taxes, an EU-wide minimum wage, European military integration and much else.

If you follow European politics, you will know that its aims are mainstream among the continental establishment. But if you still believe the EU to be little more than a clever vehicle to facilitate tourism or cut the price of phone calls, you may be jolted out of your complacency.

This is about politics and nation-building, not commerce; economics only matters when it is weaponised to promote political integration, as with the euro. You may even come to understand that Theresa May was right to say in Florence that “the United Kingdom has never totally felt at home being in the European Union”.

On top of the European military intervention force, Macron wants a substantially greater European budget, and a drive towards tax harmonisation, starting with corporation tax, the treatment of tech firms, carbon levies and national insurance.

Macron has been forced temporarily to tone down his support for a Eurozone finance minister and debt mutualisation as a result of Angela Merkel’s humiliation in Germany; but these ideas still lurk in the background. Macron also wants a European public prosecutor, an asylum office, a border police and a more integrated immigration policy.

The purpose is to build a new country called Europe, with a common history and cultural references. For this to work, old identities need to be downplayed and eventually turned into historical curiosities. Hence the creation of new European universities, the promotion of apprenticeships in other countries and the adoption of pan-European lists and parties at European elections.

It is usual to contrast Macron’s vision with that of Jean-Claude Juncker, also outlined this month. But the distinction is merely one of practicality: Macron realises that an increasingly centralised European state will have to be multi-speed. The hard core will integrate fastest; the more reluctant Europeans will move more slowly. He even thinks the UK may rejoin this slow lane.

Juncker, by contrast, is more one size fits all. Everybody is “duty-bound” to join the euro and European banking union; he wants a “fully fledged European Defence Union by 2025”; a new economic nationalism which screens “foreigners” (ie non-Europeans) from buying certain companies, and a crackdown on Eastern Europeans who oppose a centralisation of immigration policy. It’s all or nothing, with dissidents crushed.

Both men are euro-nationalists, inspired by the 20th-century ideology of Jean Monnet and Robert Schuman; both share the same assumptions; both are latter-day empire builders who want to “reunite” Europe and pit it against other countries. It’s a “choice” between two shades of grey that will end in catastrophe by unleashing populist demons across the continent.

To legitimise this power grab, European ideologues like to draw upon the work of the sociologist Benedict Anderson. He claimed that contemporary national identities are “imagined communities” forged out of disparate, pre-industrial groups by national education systems and other forms of top-down cultural moulding.

If “Frenchness” and “Germanness” are mere political creations, then why not replace them with “Europeanness”? Yet the logic is faulty: past acts of extreme social engineering do not justify a project to remould society.

That is not a “liberal” vision but a sinister, authoritarian one. Seeking to replace supposedly “fake” identities with new, carefully constructed ones designed to lead to a particular political outcome is merely replacing one kind of nationalism with another. The British metropolitan Left is kidding itself if it does not see this.

Pro-EU ideologues may argue that by forging a new coherent Euro-demos and holding elections to determine who governs it, a genuine form of democracy will be able to take root in the EU. But that will be a 100 year project, at best.

In the meantime, existing checks and balances will be eroded as power is handed to nameless politicians and officials, and technocracy will reign supreme. Far from saving the enlightenment values that almost perished in the World Wars, European integration will have destroyed them.

Britain never wanted any of this. We joined the European Economic Community for practical reasons: we thought it would modernise our economy and help the West to defeat communism. We were wrong, and we won’t make that mistake again. It will become increasingly impossible, as the years pass and Macron and his allies get their way, for anybody to pretend that the EU is merely a “free market” rather than an embryonic state.

Once we leave, that will be it: we will never rejoin.

ARTICLE 3

Theresa May's speech was eminently reasonable. How could the EU reject it?: Norman Lamont

The Prime Minister’s speech was never going to meet the artificially high expectations that some people, especially her opponents and critics, had set for her. But her words in Florence were thoughtful, eloquent, well-constructed, and provided a vision for Brexit which will be clear both to people in the UK, whether Leavers or Remainers, and in Europe.

What was most striking about the speech was how overwhelmingly reasonable it was. Overwhelmingly reasonable in explaining that Brexit was not an act of hostility by the UK to the EU. Overwhelmingly reasonable in the way it outlined a new relationship, especially a trading relationship neither Norwegian nor EEA, but one manifestly in the interest of both sides. It was reasonable before she made her offer on money and even more so afterwards.

It was so reasonable that even the most stubborn or ostrich-like Eurocrats will surely see that it is in their interest to accept something along these lines. It is difficult to believe that the EU can be so determined to harm itself that it will reject her vision of a deal. Mrs May even curtsied before the idea that we cannot benefit from the single market without being a member of it; many people don’t accept this, and I suspect she does not either, but she nonetheless made obeisance to it.

The transitional period, which she quite rightly prefers to call an implementation period, will offer reassurance to businesses worried about the so-called cliff edge. There is some danger of sudden change in regulatory regimes, but in the busy world of commerce and contracts people will be quite capable of making the necessary adjustments.

Some people will wish to pour cold water on the speech – both opponents of Brexit and people in Europe. It was never going to break the stalemate (if stalemate is what there is at the moment). But it would have been wrong for her to intrude into the negotiations in a detailed way. You cannot negotiate through speeches. She did not attempt to snatch at some instant solution, and quite rightly so. Her speech was a calm one, playing a long game.

Shortly after I stepped down as Chancellor, in 1994, I made a speech at the Conservative Party conference in which I said that one day Britain might have to choose between remaining in Europe and going in a direction that wouldn’t suit us at all, or rather awkwardly having to leave. I’m not surprised we have finally reached that point. But I was always confident that we would be able to secure a close, friendly, mutually beneficial relationship with Europe befitting our status as a large and strong country.

Today Theresa May has set out what that relationship should look like in terms anyone who wants the best for this country, whatever they voted for last June, can understand.