"The eurozone crisis is partly to blame. It has mercilessly exposed the fragility of Spain’s fiscal arrangements. In this case, the relatively rich Catalans are outraged that they have to contribute up to 9 per cent of annual economic output to the central pot in Madrid, but then go cap-in-hand for a bailout to meet their debt and payroll commitments. Catalonia wants fiscal autonomy: the right to collect its own taxes like the Basques, who contribute proportionally much less to Spanish coffers.
Yet Spain, where prime minister Mariano Rajoy is agonising over whether to seek a full eurozone bailout, needs Catalan fiscal transfers to meets its pensions and welfare liabilities. Mr Rajoy’s rightwing Partido Popular government, which is ideologically hostile to devolution, is trying to use the crisis to recentralise Spain, creating a dangerous cocktail of fiscal penury and national grievance." [Financial Times]
Seems that the spanish-nationalist recentralization campaign against the spanish autonomous regions system is not so effective as it may seem in Madrid, or at least, is not having the desired effects:
"Nobody knows where the point of political revulsion lies but monetary and fiscal suffocation has already brought Barcelona and Madrid to the point of blows, since the Catalans have been forced by the perversities of Spain’s tax system to request a "rescue" even though they subsidize the rest of the country." [The Telegraph]
"SPIEGEL ONLINE: In Germany, once the motor of European integration, people are openly discussing the possibility of leaving the euro zone. Many Germans believe that a return to the deutschmark would be cheaper than to remain stuck in a flawed currency union. Are they right?
Soros: There is no question that a breakup of the euro would be very damaging, very costly, both financially and politically. And the biggest loss would be incurred by Germany. Germans have to bear in mind that, effectively, they have suffered practically no losses so far. Transfers have all been in the form of loans, and it is only when the loans are not repaid that real losses will be incurred.
(...)
SPIEGEL ONLINE: Once again: How is that Germany's fault?
Soros: This is the joint responsibility of everyone who was involved in the introduction of the euro without understanding the consequences. When the euro was introduced, the regulators allowed banks to buy unlimited amounts of government bonds without setting aside any equity capital. And the European Central Bank discounted all government bonds on equal terms. So commercial banks found it advantageous to accumulate the bonds of the weaker countries to earn a few extra basis points.
SPIEGEL ONLINE: And that then dragged down interest rates?
Soros: Yes. The lower interest rates fueled housing and consumption booms in countries such as Spain and Ireland. At the same time, Germany, struggling with the burdens of reunification, tightened its belt and became more competitive. All this led to a wide divergence in economic performance. Europe became divided into creditor and debtor countries. All these conditions were created by European authorities, including the European Central Bank, which was largely modeled after the Bundesbank. Germans tend to forget now that the euro was largely a Franco-German creation. No country has benefited more from the euro than Germany, both politically and economically. Therefore what has happened as a result of the introduction of the euro is largely Germany's Schuld -- its responsibility.
(...)
SPIEGEL ONLINE: Do you think Angela Merkel is prepared to take such steps?
Soros: She is trapped. Merkel has realized that the euro is not working, but she cannot change the narrative she has created because that narrative has caught the imagination of the German public, and the German public has accepted it.
SPIEGEL ONLINE: The narrative essentially says that crisis-stricken nations simply haven't made the necessary reforms, unlike Germany.
Soros: Right. But at the same time, Chancellor Merkel realizes that what is happening is not working, and so she is determined to preserve the euro.
SPIEGEL ONLINE: German Finance Minister Wolfgang Schäuble gave an interview to SPIEGEL saying that now is the time for bold steps. He outlined ideas for a closer political union in Europe.
Soros: Schäuble is representative of the Germany of Helmut Kohl. He is the last European standing, and he is a tragic figure, because he understands what needs to be done, but he also realizes the obstacles that stand in the way, and he cannot find a way to overcome these obstacles. So he is really suffering.
(...)
SPIEGEL ONLINE: If you were still an active investor, would you be tempted to make massive bets against the euro?
Soros: As an investor, I would be very pessimistic, especially about Europe. But as a believer in an open society, I have to put my faith in the people and leaders of Europe to show some reason." [Spiegel Online]
"Much of this stems from Spain’s exaggerated decentralisation. The democratic constitution’s creation of 17 autonomous regions tried to reverse Franco’s heavy-handed centralisation, while keeping enough national control to satisfy the right, long nervous about self-government of Basques, Catalans and Galicians. In fact it has led to waste in public spending and to 17 sets of business regulations, fragmenting the national market and increasing costs. And it has failed to settle Spain’s historic quarrels: Basque and Catalan nationalists have exploited their status as coalition partners of the two main parties to demand ever more powers.
Mr Rajoy’s absolute majority in parliament plus his party’s control over many of Spain’s regions could allow him to start rolling back this trend. He should be cheered that a new centrist group which split from the Socialists in protest over Mr Zapatero’s toadying to the regions took almost 5% of the vote. Although Basque separatists, boosted by the end of ETA’s terrorism, and Catalan nationalists also did well, one lesson of the euro crisis applies also at home: too much splintering makes governing an economic union harder." [The Economist]
The key point is that there is not even one real reason or argument given in the article to prove why decentralisation is such a big problem for spanish economy. Only the vague suggestion that decentralisation causes implies lesser speed of reaction. Although the politics developed by the catalan nationalist administration prove the opposite.
Even more, given the fact that the article absolutely ignores the efforts made by Catalonia to restrain its economic spending (the toughest by far made by any admministration in Spain) it comes the suspicion that there could be an interested purpose in the article, and not a healthy journalist job.
There has been a little controversy about these words by Jesse Eisenberg (the star of "The Social Network") in Conan O'Brien's show on TBS, about his visit to spanish show "El Hormiguero" [Google Translated Version]:
Jesse: Yes, it was not like this. First, speaking in Spanish. But it's not like being here with you that you are so kind to the guests and treat them with respect.
Conan: They were not kind to you in talk show?
Jesse: I really do not know, because I do not speak much Spanish. They tell you before entering the program, "Have fun." You go and you realize that is impossible, because the program is apparently designed to humiliate the American guest. They show stupid pictures of you, and somehow they laugh at you. Then the audience laughs, and you listen to the translation and realize that yes, they are laughing at you. But you do not have time to answer, because they have moved to something else in Spanish.
Conan: Why are they so pissed off with us?
Jesse: I dunno, I think it's because Americans do not teach their children foreign languages, so we do not know what happens in their programs.
Conan: It's cultural revenge, we will bring your biggest stars on television and humiliate them.
Jesse: Yes. Ungrateful for what they did in the Second World War, we sent planes and ships to help them ... I'm sorry (laughs)
There is in fact a number of people (where I am included) in Spain that hate this show and agree with Eisenberg that they laugh at their guests (check this Facebook page), but the reasons he gives are just ridiculous and show a total lack of culture, because Spain just didn't take part in WW2. The main problem of "El hormiguero" is just that they think they are so funny that they just don't care about anything else. I don't think they want to humiliate anybody, they just think that being with them is so cool that anybody has to have fun, and it is true that they don't care if you actually understand their jokes or not. It is just a problem of miseducation, talking about cultural problems, about "revenges" and other nonesenses, just shows that Eisenberg is not better than them.
