German magistrates, who questioned and later approved the rescue of Greece in 2011, have this month started to review the constitutionality of the bond-buying programme of the European Central Bank (ECB) at the request of over 35,000 citizens. They allege that it is an instrument to provide struggling countries with easy money from German pockets. According to many experts, this policy helped Spain and Italy avert disastrous defaults by preventing bonds’ interest rates from escalating to unaffordable levels, which was what was happening until the ECB president Mario Draghi threatened to do “whatever it takes” to protect the euro in July and subsequently launched the bond-buying programme … [Read more...] about How EU austerity is falling foul of the law
EU
Tales for Tapas: Because we can
It must be nice to have sold a hundred million records. It no doubt puts a spring in the step and adds zest to the bank account. In the case of one popular American rock group, it makes it possible to throw commerce to the winds and perform for free. Ticket prices for Bon Jovi’s Madrid concert at the end of June were reduced by more than half when band members waived their own fee out of solidarity with Spanish fans enduring the rigours of austerity. (Among other things, this enables those with a curious cast of mind to calculate through rudimentary arithmetic the hourly rate that middle-aged rock stars customarily command for getting stadiums full of people to sing along rapturously to a … [Read more...] about Tales for Tapas: Because we can
Tales for Tapas: Profitability and protection
Elvira Rodriguez, president of Spain’s Securities Commission, noted in a speech to company directors in Madrid on Tuesday that the economic crisis “has revealed weaknesses in the system of corporate governance.” Possibly a candidate for understatement of the year. Ms Rodriguez commented, among other things, on the lack of transparency which preceded the difficulties at Bankia and at Pescanova, the fishing conglomerate. She said that Pescanova was a company that had enjoyed a positive reputation and whose management were known for their wholehearted commitment, which bamboozled the supervisory authorities. These sterling qualities also offered a somewhat distorted impression to … [Read more...] about Tales for Tapas: Profitability and protection
Tales for Tapas: Compelling drama
Apart from that Sinatra-esque farewell announcement in 2001, Sir Alex Ferguson’s just-confirmed departure from Manchester United has been a model of timeliness accompanied by a minimum of fuss – in rather stark contrast to the goings-on at Real Madrid, where the José Mourinho soap opera, now ostensibly focused on the benching of the goalkeeper and captain, in reality hinges on the fine print of the manager’s employment contract. Despite his age (quite advanced in football years) Iker Casillas remains at the peak of his prodigious powers. His dissatisfaction about being dropped from the first team, the coach suggested this week, is fuelled by the covert desire for a more “manageable” … [Read more...] about Tales for Tapas: Compelling drama
Do EU migration trends put Spain’s health and pensions system at risk?
According to The Economist’s Buttonwood, “desperate times require desperate measures”. I am sure this is right, times in Spain are certainly getting desperate and many of the measures being implemented in Brussels, far from being radical look much more like continually closing the door after the horse has bolted. The issue Buttonwood draws our attention to in the blog post accompanying this statement is that of migration trends within the euro area and the impact these have on trend GDP growth and structural budget deficits in the various member countries. This is an important issue indeed, since such movements seem to be an unforeseen and largely unmeasured by-product of the current … [Read more...] about Do EU migration trends put Spain’s health and pensions system at risk?
Tales for Tapas: Catch of the day
With anti-austerity demonstrations, a song for Europe, a pair of Barcelona-Real Madrid encounters, and scandals (royal and otherwise) bubbling along – some people may not have been paying attention to Tuesday’s meeting of the European Union’s Agriculture and Fisheries Council. But when El Sueno de Morfeo have made Eurovision history (or not), when Cristiano and Leo have hung up their boots, and when harmony has returned to Spanish politics, the outcome of the Fisheries Council’s deliberations in Brussels will still be having a profound impact on dinner tables in Spain and beyond. Among the issues discussed at the meeting was the introduction of a ban on throwing unwanted fish caught by … [Read more...] about Tales for Tapas: Catch of the day
The great Portuguese hollowing out
As Portuguese President Aníbal Cavaco Silva once put it, "A country without children is a nation without a future." He was, of course, referring to his country’s ultra-low birth rate, which is just over 1.3 TFR and has been below replacement level (2.1 TFR) since the early 1980s. In 2012 only just over 90,000 children were born in the country, the lowest number in more than a century – you need to go back to the 19th century to find numbers like those we have been seeing since the crisis really took hold. But added to this longstanding, yet unaddressed, problem there is now another just as dangerous one. High unemployment levels and the lack of job opportunities are leading an increasing … [Read more...] about The great Portuguese hollowing out
EU praise can’t hide Rajoy’s bailout jitters
Much was made of the apparent chemistry between Mariano Rajoy and Angela Merkel when the two leaders met in Madrid last week. The German Chancellor’s comment that she was “impressed with Spain’s reforms” was indeed music to the ears of the Spanish prime minister. Similar praise from European Monetary Affairs Commissioner Olli Rehn over the weekend, along with IMF managing director Christine Lagarde’s statement that measures taken by Italy and Spain were “adequate in and of themselves” was also welcome from Rajoy’s point of view. The Spanish leader is closely gauging these appraisals of his reform program because, as he almost certainly prepares to request some form of bailout from the … [Read more...] about EU praise can’t hide Rajoy’s bailout jitters
A victory for Hollande, a victory for Spain
François Hollande’s French presidential election win has been trumpeted as a triumph for Socialists across Europe. Not only does it stem the tide of centre-right governments that have taken control of most EU countries, it also vindicates the European left’s resistance to austerity at any cost. And the champagne was being uncorked on Sunday at the headquarters of the Spanish Socialist Party (PSOE), as its leaders enjoyed the thought that finally, their neighbour to the north has a left-leaning president. We don’t know whether Hollande will deliver on some of his bigger promises, such as reducing the retirement age or renegotiating fiscal targets with the EU. But the fact that one of the … [Read more...] about A victory for Hollande, a victory for Spain
Rajoy’s smoke and mirrors have worked – for now, at least
If we have learnt anything about Spain’s new prime minister, Mariano Rajoy, since he took power in December, it’s that his reputation for being anything but straightforward when conveying his intentions is well deserved. Rajoy has often been portrayed as the embodiment of retranca, a tendency his fellow Galicians are known for to answer questions with ambiguity and multiple meanings. The first two months of his tenure have seen Rajoy behave every bit like the stereotypical Galician. An early example of this was when the prime minister deployed his front-line ministers to announce a major tax increase, just days after himself announcing that “my intention is not to raise taxes.” And now … [Read more...] about Rajoy’s smoke and mirrors have worked – for now, at least