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Friday, February 02, 2018

Thoughts from Galicia, Spain: 2.2.18

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.

Cataluña
  • To repeat the most pertinent question of the moment - What next?
Spain
  • Where would I be without The Local's lists: Three more at the start of February;.
  1. Ten things to do this month
  2. Ten romantic getaways for Valentine's Day, and 
  3. Why you should visit Seville this year. Surely a repeat.
The EU
  • Here's Der Spiegel on the rejoicing of Frankfurt Folk on their post-Brexit prospects. Well, in some quarters anyway.
  • Posted below is an article by a downhearted and pessimistic Ambrose Evans Pritchard, with his firm conclusion on what the UK government should do on the basis of its negotiating experience to date. Taster: Berlin, Paris, and Brussels have stated with crystal clarity that no deal on services is available. The only free trade pact they are willing to offer is on goods. This is prohibitively asymmetric: it locks in their huge surplus (mostly German) in manufacturing, while locking out Britain’s surplus in services, which partly compensates. Those who talk loudest about cherry picking pick the biggest cherries. . . My experience as Brussels correspondent and then later covering the eurozone crisis taught me that Germany usually succeeds in imposing its will, disguising its power behind French camouflage and the EU institutions. What the EU is offering is not a deal worth having.
Social Media
  • If you're as concerned as I am on this issue, I recommend the February edition of Prospect magazine. It  contains several relevant articles, prefaced by this editorial:-
The internet’s prying profiteers: Sooner or later, the world will have to try and get a grip with the pace of technological change

Only two decades ago, when Google was founded, the internet was on the fringes of real life, a place for misfit students to hang out. Their parents may have heard of the web, but were clueless about it. Today, in many respects, the internet is real life. It is where we shop, work and connect with lovers and friends. It has become the streets in which we trade insults, and the town square where we protest. Smartphones are, almost literally, our window on the world. 


The web is our way into every form of culture, and often the only way to find out what’s going on. But if all human life can be found online, what humans do there is, increasingly, led by guiding hands. John Naughton charts the insidious evolution of a free and ungoverned cyberspace into a pleasure garden for five giant corporations. Two of them, Google and Facebook, have acquired an all-seeing eye to make the Stasi burn with envy. And their business model rewards them for knitting us in ever-more tightly. 

The result is a strange and novel form of influence, on top of the more familiar monopoly power which Amazon, Apple and Microsoft also possess to varying degrees. Sometimes the new power is not sought: Facebook did not plan to warp the US election in 2016, but nonetheless played its part in facilitating the spread of dubious communications. None of the tech giants set out to subvert the world of letters and ideas either, but collectively that is what they’ve done. 

There can be no going back to a pre-internet age. Ideally, we would instead run the web like the indispensible utility it has become—regulating the prying profiteers in the same way that past reformers like Theodore Roosevelt tamed the robber barons of the time.

But there are formidable challenges: for one, the question of whether politicians could be trusted to get involved without succumbing to the sort of self-serving meddling that is seen in places like China. For another, regulation of a worldwide web needs worldwide co-operation.

That’s never easy, and especially not when Donald Trump’s Washington is actually moving against net neutrality, one of the few regulatory checks we have against corporate capture.

But sooner or later, the world will have to try and get a grip. If not, we’ll be stuck with a civilisation that’s all tangled up in the web.

En passant, today we learned that Apple have declared the highest ever profits of any company. They'll doubtless be pleased at the lower corporate tax rate in the USA. Assuming they pay any tax there.

Nutters Corner
  • Here's Gloria Copeland, who's a US evangelist and the wife of the chap who recently boasted of having bought a private jet and then demanded more money for a re-fit. She's telling the gullible faithful why they shouldn't immunise themselves against flu: We don’t have a flu season. Don’t get a jab if somebody threatens you with ‘Everybody is getting the flu'. We’ve already had our shot. Jesus himself gave us the flu shot. He bore our sicknesses and carried our diseases. He redeemed us from the curse of fluThat’s what we stand on. She then went on to pray for those who'd already got the flu: Flu, I bind you off the people in the name of Jesus. Finally, she advised those who didn't yet have it to: Innoculate yourself with the word of God, by simply declaring: I’ll never have the flu. Given the propensity of the US government to imprison so many of its people, one wonders why religious leaders like her remain free. And in charge of non-tax-paying 'charitable' institutions. It's truly eyond belief. But, then, so is Fart. 
Galicia/Pontevedra
  • When I drive down my hill, I often follow drivers who religiously - but pointlessly - avoid the chevrons in the middle of the road but then don't signal when they get to the roundabout at the bottom. I do wonder about their sense of priorities.
  • Which reminds me . . .  In the last couple of days, I've:-
  1. Watched a learner driver approach a roundabout from the other direction, turn left without a signal and then signal right after it had left the roundabout. Not an uncommon scene.
  2. Almost hit a car coming from my right on a roundabout and turning left without any signal at all. And
  3. Almost been hit by a truck entering the autopista and ignoring the Yield sign.
I would show you all of these as caught on my dashcam but I had the sound on and I fear some readers would be offended.

Finally
  • Here, published by Lenox Napier of Business Over Tapas, is a riposte in the right-of-centre ABC to the Times article on How to Be Spanish. As Lenox says - tongue firmly in cheek - it's 'done with without a drop of bitterness but instead in a purely jocular vein'.
How to be British

First of all, you can carpet up any surface under your roof because Great Britain, the host country, can also be the promised land for all carpet-mites, whether it is the living room, the staircase or the bathroom, whether for public or private use. The advantages of carpeting the 'small room' are undeniable, as it saves a lot of time in mopping and is just the thing for stepping softly, which, in the bathroom, multiplies the comfort of the excretory moment. The hairs on the carpet will absorb whatever may fall outside the target (God forbid) without the need for the daily scrub and bleach.

Hygiene, therefore, has to be fairly relative if you want to be an Englishman, because water is a scarce commodity and its use must be rationed. A study by Euromonitor International points out that the British are among the Europeans who enjoy the fewest weekly showers: the average being less than four. Another argument for the Brexit? Without leaving the bathroom, the UK is a country firmly anchored in tradition. This is the resistance to the universally used Continental single-lever tap system, in which one chooses the temperature at which the jet comes out. An Englishman - even in the 21st century - will have to risk scalding his hands, getting them frozen or moving them from the cold to the hot tap, which will undoubtedly improve his reflexes.

In general, if you want to be British the trick is to go against the way most other humans circulate (either on the pavement or the road), queue up for everything even if you are the only one in line, dine at an unholy hour and, if you do so away from home, go to a foreign cuisine restaurant because it will be difficult for you to find a decent bite of British cuisine (that oxymoron), unless you love local fish (unlikely choice) or your legendary rhubarb crumble, with its remarkable laxative powers.

When travelling abroad, if you want to be English, don't hesitate to slip some white socks (do not need two pairs, don't exaggerate) into the suitcase. They will be indispensable for the sandals that you will be wearing on your holiday. At your destination, and especially if you are young, be sure to dedicate at least 20 of the 24 hours of the entire day to an immoderate and joyous intake of alcohol, and when you are in a suitably cheerful frame of mind and yet you find you can't get your point across since not everyone understands the language of Shakespeare (or rather, the Spice Girls), following a couple of street brawls, you can try the "balconing" in the hotel.

Don't waste too much time in museums, such as the Prado for example, where the British hardly account for 0.35% of their visitors (Italians are 9.71 and the French 5.30). Only one exception to this sight-seeing rule is the Museo del Jamón, where those tasteful sandals will have brought their owners for a spot of culture. On returning to the UK, one traditionally goes straight to a law firm specialized in reporting Spanish hotels for food poisoning. You don't even have to suffer any queasiness, since the paperwork and the scam are arranged there while you wait.

And always exaggerate, exaggerate very much, even employ sensationalism if possible: another great British contribution to the world that strives to entertain one's reader or listener during those dark British months of winter.

Well . . .  I imagine most readers of any nationality will be able to discern immediately that the 2 articles are very different animals. This one is nasty, off-beam, unfunny and, above all, adolescent. I'm only surprised it didn't include the other popular Spanish calumny that all British women keep filthy houses. Whatever you think of the British article, I don't believe these charges can be laid at its door. But, if you're Spanish, feel free to comment and disagree. Or any nationality, for that matter. We Brits can take it! 

I do have to admit I found the reference to the tiny percentage of British visitors to the Prado rather surprising. The only breakdown I could find in either Spanish or English confirmed the high numbers for Italian and French visitors but listed Japanese and Mexicans as far more numerous than the British. And, indeed, than the Germans and all other Europeans. I did eventually land on this site, which provides some evidence of the popularity of 'art museums' back in the UK. Perhaps Brits - whatever their footwear - get enough culture back home and come to Spain for other things. Decent food perhaps.  Unlike the French.

Finally . . .  I never thought I'd ever say this but it'd interest me to have Alfie Mittington's view on this, given his mongrel make-up.

Today's Cartoon


THE ARTICLE

The EU refuses a soft Brexit, so we must invoke the WTO immediately: Ambrose Evans Pritchard.

Those who called for a clean Brexit from the outset were right. The Franco-German axis is determined to make a soft arrangement impossible. Any further talking at this point wastes time and tightens the noose around our own necks.

If Britain is to leave the EU – as it must, after a clear popular vote, endorsed by Parliament, and written into the Tory and Labour manifestos – the only way to do so with economic and political coherence is to reassert full sovereign self-government.

Sadly, I have concluded that we are left with no choice other than to invoke our rights as members of the World Trade Organisation and accept tariffs (mostly very low, but still unwelcome) until free trade deals can be agreed one by one with the US, China, Japan, India, and other countries. The wheels should be set in motion immediately. It will be impossible in another six months.

Berlin, Paris, and Brussels have stated with crystal clarity that no deal on services is available. The only free trade pact they are willing to offer is on goods.

This is prohibitively asymmetric: it locks in their huge surplus (mostly German) in manufacturing, while locking out Britain’s surplus in services, which partly compensates. Those who talk loudest about cherry picking pick the biggest the cherries.

What the EU is offering is not a deal worth having. It is possible that other countries – Ireland, Holland, the Nordics, and perhaps Spain, Italy, and Poland – will succeed in pushing for a more friendly and equal settlement but I would not count on it. By the time we find out, it will be too late. My experience as Brussels correspondent and then later covering the eurozone crisis taught me that Germany usually succeeds in imposing its will, disguising its power behind French camouflage and the EU institutions.

My fears have been confirmed by the hostile tone of EU documents since Theresa May went the extra mile to ensure concord at the December summit. Her offers of money and her gestures of goodwill have simply been pocketed.

The latest provocation is an internal strategy paper leaked to the Financial Times showing that the EU intends to tie Britain down after Brexit by prohibiting or curbing future moves to cut taxes, to deregulate, to carry out an industrial strategy, or make changes to employment law, all under pain of sanctions. It threatens to treat the UK as a pariah if it does not comply.

It states in prosecutorial tones that Britain is “likely to use tax to gain competitiveness” and vows to stop British regulatory dumping in the future by suspension of trading rights. The authors flag the risk of Britain “undermining Europe as an area of high social protection” and even suggest that we will relax emissions curbs on power stations and degrade worker rights in chemical plants.

As it happens, Britain currently has a de facto carbon tax of roughly €30 a tonne compared to nearer €10 in Europe where the emissions trading scheme has been a fiasco. This carbon tax has been high enough to price coal out of the UK market,while Germany has ramped up use of the dirtiest brown lignite. As for Poland, where do we even start? The insinuation that Britain is about to embark on ecological degradation and needs restraining by Brussels is scandalous.

The tone of this strategy document is insulting and belligerent. Yet that is the diplomatic reality we now face. Mrs May should walk away politely. She should express regret to friends that a closer relationship is not possible. There should be no histrionics. We should not play the Nato or security card, however tempting.

The Government has made a series of very grave errors in its handling of the negotiations. It tried to bluff the EU, only to have its own bluff called repeatedly. It put itself in the position of a ‘demandeur’. It submitted to all EU terms in December merely in order to secure a transition deal – needed because it had wasted 18 months in dithering – only to discover that even this is turning into a nightmare (as some of us warned)

Greece’s Yanis Varoufakis advised the UK long ago to pre-empt the EU by seizing the initiative before Brussels could react, and above all to avoid being ground down, humiliated, and ultimately broken by the EU "run-around". British ministers did not learn from the battering of Greece.

I suspect now that even if we had requested the softest of Norwegian models from day one, Berlin would not have granted it without impossible conditions. As Luxembourg’s finance minister said in Davos, there are powerful forces in the EU system who really are Hell-bent on punishing Britain.

We can all understand why Theresa May recoiled from a clean Brexit. Parliament was not ready – although it would have acquiesced under clear, firm, informed leadership in late 2016 – and she had to cope with the neuralgic questions of Scotland and Ireland. Yet there is perhaps a silver lining in her efforts to appease Europe at every stage: it is now self-evident that a soft Brexit is not on offer, except on colonial terms.

The Whitehall memo leaked this week – EU Exit Analysis – claims that the WTO option would shave 8pc off British GDP over fifteen years compared to the trend line of EU membership. As I wrote in my column yesterday, the assumption that the EU itself is a viable project over those same fifteen years must be contested since it lacks the policy machinery and the cultural cohesion to avoid a crisis in the next global downturn. But let us not quibble.

The report appears to conflate a WTO model with a “No Deal” scenario, which is different. I would certainly agree that a no deal outcome would be disastrous. The WTO option requires a deal to avoid all kinds of cliff-edge effects on trade, landing rights, Euratom etc. Britain should make it clear it will withhold our exit payment if the EU is bloody-minded about this or tries to infringe our WTO rights.

So how bad would it really be if we fell back (temporarily) to WTO terms? The EU has an £80bn current account surplus with Britain. This is 4pc of British GDP and automatically creates a buffer if there is major trade disruption. Some imports from the EU will become uncompetitive at the margin. Part of this will be replaced by import substitution and will stimulate UK producers, ceteris paribus.

It is revealing that the contingency plans of German industrial lobbies for a hard Brexit include a switch from Continental suppliers to UK suppliers for their manufacturing plants in Britain. It would be jejune to suggest to that the British economy would do better under such circumstances – though some sectors might – but in this complex geometry there are many offsetting effects. Our trade deficit perversely becomes a valuable card. The EU’s vast surplus means that any trade barriers are unremittingly bad for them.

How did the Treasury model these flows? We don’t know. British exports to the EU are just 12pc of GDP.  You would have to assume an astonishing wipe-out with no compensating effects to reach the Treasury verdict, or find another culprit.

An authoritative report last year by a team under MIT trade expert John Van Reenen for the Centre for Economic Performance estimated that a WTO option would cut British living standards by 2.7pc over time. But it pushed the losses to a range of 6.3pc to 9.4pc once "dynamic" effects are included. This is to rely heavily on the "black box" of productivity, a malleable concept. I would presume that the Treasury uses the same method since Prof Van Reenen once advised them.

For those who missed the Lords debate this week, ex-EU commissioner Lord Hill warned his colleagues against the fatal temptation of trying to block or dilute Brexit. He also argued that the ineluctable logic of withdrawal is that it must ultimately be sovereign.

“One of the reasons I voted for Remain is that I thought it would make no sense for a service-based economy like ours to be bound by rules over which we had no influence: now that we have voted to leave, that same logic is even stronger. Because the act of Brexit is itself changing the dynamic in Europe,” he said.

“Contrary to the Referendum myths, we had a lot influence in the EU: pro-free trade, pro-markets, pro-business, but that voice has fallen silent. As a result Europe is already moving in directions we have traditionally resisted. For an economy that is as dependent as ours on services, how could we in all seriousness subcontract all our rule-making to someone else?

“We must surely place a greater priority on being able to shape our own future than on preserving the status quo, particularly when technological innovation is going to change the status quo.” There you have it. A soft variant of Brexit is a mirage.

Let us be clear: if the Government opts for the WTO model, it must be willing and ready to carry out such a policy. There has been too much bluffing already. The door should be left open for a trade deal, should the EU wish to return to the table and defend its £80bn surplus, but only if the accord covers services, with mutual respect for each others regulations, and in a spirit of cooperation rather than demanding British submission to the Acquis and the European Court in perpetuity.

My only proviso is that any such discussions should henceforth occur in Reykjavik, Geneva, Oslo, or perhaps Minsk. Symbolism matters.

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