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Spain needs reform – now and fast, before it’s too late. Its political and judicial system is wholly ineffective, ancient and still governed by the ghosts of Franco’s regime. The crisis in Spain is institutional and political, not fiscal and the politicians are failing to rise to the challenge of the current crisis. It’s no good taking a ‘Gordon Brown’ negative approach and hit anything in site with a tax to try to repay the colossal sums of money you borrowed as lazy and simple option.
When any business based on a set model starts to lose money – problems have to be identified and tough changes made, business can’t demand money from innocent passers-by or raise their product/serviced prices to shore up an ailing empire, it’s a question of bankruptcy or re-vamp what you have and work damned hard to repair the damage.
Mr. Rajoy assured the world that Spain did not need a bail-out and 4 days later (whilst watching Spain paying football in the European cup) decided that they did. Mr. Rajoy assured us all that there would be no tax hikes…….. he has since raised several taxes including VAT by 3%.
Institutional corruption and regional governance itself needs to accept a lion’s share of the blame for Spain’s pathetic condition. There are 17 autonomous communities, each with its own particular relationship with the state. This quasi-federal system is a throwback to the days of Franco’s authoritarian rule and if more evidence is needed then Galicia provides a perfect example.
Galicia, the birthplace and family seat of General Franco, is the Popular Party’s greatest stronghold. For 22 of the last 28 years the party has governed there and former Franco minister Manuel Fraga was regional leader for 15 years. Putting the power of decision and management in the hands of one man and his own appointed lieutenants, with no external influence is a consolidated powerbase where abuse of funds is inevitable, as is so common………… In 2009 730 public officials in Spain were facing corruption charges. Wherever there are long held positions in regional political affairs that are unsupervised and
non-accountable to a higher authority, there will be corruption
Ramón Pacheco Pardo, lecturer in Spanish Contemporary Politics at King’s College, London said ‘Where these powerbases have been under the control of the same people for maybe 20 years or more, you need to have very good relations with them if you want to do business’
It is simple to say that the government needs to regulate and then monitor the autonomous regions, but a weak and indecisive leadership would only complicate an already difficult situation. There are many ways that Spain can self-administer the medicine it requires to pull itself out of the mire but unless the powers get a grip and get going with some radical and ruthless changes, we will still be at Frau Merkel’s back gate with our begging bowl.
Woodbug
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In your opinion, what are the specific steps that Spain can self administer to get itself out of the mire then Woodbug, and in what sequence and to what timeframe?
This message was last edited by ads on 17/07/2012.
This message was last edited by ads on 17/07/2012.
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"When any business based on a set model starts to lose money – problems have to be identified and tough changes made, business can’t demand money from innocent passers-by or raise their product/serviced prices to shore up an ailing empire."
Why not? The system is alive and well in the UK. It works for providers of:
Gas, electricity, water, telephones, trains, buses, post, banks, etc. In fact any government or quasi government semi monopoly can raise ther prices with impunity where in the real world private companies would go bust.
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have not the governments themselves just raised VAT and other taxes?
Norman
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N. Sands
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Yes, the general logic seems to go something like this:
- you are spending too much, which increases inflation
- to stop you doing that we are going to increase taxes
- because you have less, you are now spending too little
- from what you have left you must now spend more to increase GDP and get us out of recession
- that will increase inflation
- Then:
- you are spending too much, which increases inflation
- to stop you doing that we are going to increase taxes
- because you have less, you are now spending too little
- from what you have left you must now spend more to increase GDP and get us out of recession
- that will increase inflation
- Then:
- you are spending too much, which increases inflation
- to stop you doing that we are going to increase taxes
- because you have less, you are now spending too little
- from what you have left you must now spend more to increase GDP and get us out of recession
- that will increase inflation
- ad infinitum!!
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'Cmon Woodbug, put us out of our misery with some specific radical reform ideas in a sequence that preferably doesn't go round in ever increasing circles!
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Please stop knocking inflation Xetog, it really will not do!!!!
Inflation is wonderful it is the only way I have made any money in my lifetime.
I borrow as much as I can - interest only, of course - since if it is a good idea to borrow then it clearly must be a bad idea to pay back - obvious.
All my earnings through labour were lost in expenses and pension + charges and p.a.y.e
but the widows' mites from the building society just grew and grew or shrank and shrank depending on your viewpoint.
now I, or more correctly the kids, have a bit of a nest egg from whatever the government leaves them
all with out a moments labour
and that is just me, what about Rod and all the other buy to let'ers - poor old Mr King just cannot do enough quantative easing to keep us all happy, but he is trying, bless him.
you really must stop trying to kill the goose, thank you
Regards
Norman
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N. Sands
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Hi Norman
I'm thinking of changing my login to Eeyore:-)
"Good morning, Pooh Bear," said Eeyore gloomily. "If it is a good morning," he said. "Which I doubt," said he.
"Why, what's the matter?"
"Nothing, Pooh Bear, nothing. We can't all, and some of us don't. That's all there is to it."
"Can't all what?" said Pooh, rubbing his nose.
"Gaiety. Song-and-dance. Here we go round the mulberry bush"
Have a nice day!
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Hi Xetog,
if only it was fiction, a book you could enjoy and put down and get on with life, wherever.
Obhama is only still alive because they have got him by the balls just as they have with the rest of us I am afraid.
If only you could make a change for the sake of the kids before you go.
Regards
Norman
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N. Sands
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Well ads here we go – I am sure that you, as a contributor with in excess of 1200 posts on this forum will have your own ideas and I hope my meager contribution meets your criteria, although I’m not sure what you mean by ‘ever increasing circles’
1. Because the taxpayers in Spain are responsible for repaying the bank bail-out (if it ever comes) then they should be given something back in return, not punished with massive tax hikes. Take the weakest banks and transfer all the toxic debts of the others to the ‘bad banks’.
The government will underwrite the depositor’s money against loss and those holding mortgages from a bad bank will transfer to a different provider on the same terms. If the banks were to flood the markets with distressed property then the whole property market would crash, so this is not an option. Banks that don’t make the grade should be allowed to go bankrupt and not continue to trade insolvently.
It’s a criminal offence for a business to trade in an insolvent position – and my understanding is that a bank is a business, although no doubt someone will tell me differently.
Local Housing Associations should be formed and the bank held properties given to the associations who would rent and lease to buy as social housing to those wanting a home. This reduces the housing stock that is just rotting, provides much needed housing and the rents will go to pay off the bail-out, with the added bonus that the prices of houses on the open market generally don’t get dragged down.
2. In every community a team of 6 qualified independent accountants will be appointed. 3 no. forensic accountants to investigate the past dealings with 2 management accountants and a business operations director whose authority is absolute. Any untoward fiscal matters would be dealt with immediately and the necessary steps would be taken without delay to retrieve any irregular funds pending the outcome and this would be held in escrow until the matter is settled. Those found to have been dishonest would forfeit all assets as proceeds of crime, the money going into the ‘pot’.
3. Create a common law system to deal with corrupt officials as Spain does not use this precedent system and if they did, court cases would be fewer and faster.
4. Lower the employer’s contribution to the government and this will encourage an employer to put all workers on ‘the books’ as little would be gained by continuing to pay on the lump. The employee would welcome this as he/she would them become eligible for unemployment and pension benefit, so revenue will start to flow again.
5. Simplify the contractual obligations of an employer and reduce the penalties to generate more jobs. At present the cost of employing and the onerous terms implied, are a huge deterrent to employers.
6. Combine all the various police and law enforcement agencies, which could reduce the numbers and take a huge weight off the budgets. Restrict the police to criminal matters and remove their involvement in petty civil matters, this will reduce the annual budget considerably.
7. Cull the top-heavy civil service and simplify the antiquated systems, licenses, paperwork etc that are no more than make-work operations. Few other countries in Europe have the complicated systems that take so much man power and paperwork, despite computers everywhere you look. Why keep a dual system and have the need for so many rubber stamps in this day and age.
8. Stop the Siesta – get in the real commercial world now. Why do office and shop workers in air conditioned offices need this break from the heat? Why go home to sleep in the daylight and then use lighting at considerable cost to continue the days work? Think of the ecological cost of 4 journeys each day instead of two. What can be gained by working till 2.00pm then returning at 5.30pm, when the rest of Europe has finished for the day. Has it never occurred to a boss that he is losing a valuable export business window during these important hours, when the rest of Europe is buying?
9. Encourage retired craftsmen and professionals to set up workshops, funded by the savings above to train the under 30’s and help them find jobs in industries that need more trained/qualified staff.
The tutors could receive a top up pension and the trainees an agreed training expense allowance.
10. Let’s not even mention Bank Holidays and Fiestas.
I believe that the above measures would go quite some way to claw our way back and I am certain that many EOS contributors will have other ideas as well.
Woodbug
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What in anyone's name would you need all those accountants for when a simple bookeeper is all that is required - it is not the sums which are complicated - ask Terry Wogan?????????????????????????????????????????????
Norman
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N. Sands
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Thank you, Woodbug, for taking the time to write such a well-informed, well-thought-out reply.
If only Spain's Governmental leaders were more interested in actually trying to solve the country's debt problems rather than doing what they have to do to keep their jobs (as directed by the Banks) great things could happen!
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What in anyone's name would you need all those accountants for when a simple bookeeper is all that is required - it is not the sums which are complicated - ask Terry Wogan?????????????????????????????????????????????
Once again Norman, you have skillfully managed to miss the point – don’t you ever fully read the contents of a post?
The whole point is to remove bookkeepers and replace them with professional and experienced financial actuaries who can recognize, isolate and have sufficient power to remedy any irregularities
I trust that you are not advocating that the humorous and verbose Irish ex-disk jockey Mr. Wogan should be engaged to oversee the rebuilding of Spain – I think that if he has such a mathematical bent as you appear to think he has, he will be fully employed putting to rights his own country which is now struggling to resurrect itself.
Ireland had exactly the same problem as Spain has when the Celtic Tiger economy burst 4 years ago. Take a look at the Irish situation that is now on the mend and compare it to Spain. Believe me Norman the situation in Spain is serious and it will affect many, many people in times to come and the longer the issues are ignored the worse the outcome will be. Spain has not even acknowledged that it has a problem let alone get to grips with it.
Woodbug
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HI folks, Just wondered if you wre talking about Spain or the U.K? Can't see any difference. Cameron and his clowns (we're all in in together!) are waxting our money instead of sorting out issues. The Balir fiosaco has beens helved in case he has to go to court, They won't give us a referendum on Europe, they fail to get the banks to lend to businesses, despite taking our money to bail them out again and again. I am 5 years into trying to get money off a crooked solicitor that was fiddling a house purchase using my name. Tasmine Berks (please google her tale) is 5 years into trying to get compensation for an organsiation selling off plan properties in the UK, Spain and Florida for inflated prices, then going bankrup while taking £70m out of their business.
Seams to me that Spain and the UK are similar except in one the sun shines and teh other it rains, and rains, and rains while atbthe same time having droughts because some politician sold off the water companies to private enterprise when we are single sourced from them and they keep paying their exec's millions, kaming excessive profits and do not carry out any repairs.
Time the ordinary people rise up and get rid of these clowns across europe. They call tis democracy (joke)
Regards
Smiffy
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Thank you Woodbug for getting the ball rolling on discussing some practical solutions, rather than rhetoric of how bad the situation is, or how one country is worse than another. Yes , it's necessary to review and discuss the stark realities, but without analysing potential solutions (blinkers off) and truly understanding the concepts (in layman's terms) then many will fail to engage with any debate.
I have some basic questions relating to your posting.
How do you suggest that the remaining solvent banks remain accountable to Jo public? Through consistent monitoring and enforcement of regulation? How will that be achieved when it is not in the interests of those in power? It has been suggested that the best intellectual minds have been used by the Banks to create this hidden complex system that has nearly brought us to our knees, so intellect alone is insufficient. There has to be greater emphasis placed on ethical standards, such that those working outside of these boundaries should be disincentivised in some realistic workable and practical form. Any suggestions Woodbug?
Re your siesta observations. How do you overcome a cultural divide where perhaps for many in Mediterranean climes, the emphasis appears to be in the creation of a less stressful lifestyle? How do you ensure that a balanced approach is achieved where the creation of wealth is not the sole motivating force?
Thanks again Woodbug.
p.s. I have other questions relating to your posting but will leave it there for now!
This message was last edited by ads on 19/07/2012.
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Well Woodbug,
anyone, really anyone, can trot out a list of undeliverable endless requirements to put the world to rights, even Spain.
You know full well that they are undeliverable since you state it clearly as "Spain does not accept that it has a problem".
The simple answer is to introduce honesty and fair play, equity in all things with ordinary joe, the citizen as final arbiter.
He is fully capable of recognising fraud without the assistance of a "forensic accountant", or any other "professional".
Mr Smiffy is correct as is Georgia in advising Ads the extent of the task.
I conclude that the world has gone mad with greed and corruption with a revolution necessary to clean it.
Ads may dream and perhaps Keith and Maria will slowly, very slowly deliver but the whole culture needs to change.
But of course I admire all efforts, keep it up.
Regards
Norman
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N. Sands
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Congratulations Woodbug for one of the most thought through, rational and useful posts It has been my pleasure to read.
Will it happen........ no but your post has excercised the minds of some that read EoS and who knows how far the contents will travel and who may decide enough is enough and start to turn this beautiful country around.
Barry
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Thanks for that Barry, also to ads and maddiemack - it is quite refreshing to get bit of encouragement and I am glad that there are others who love this country and its people as much as I do and don't want to see any further deterioration.
I am rather bemused with some of the negative EOS contributors who seem to think that those who would support change and have had the insight to research the problems are plainly odd.
Its those looking in through the window that can identify the problems and perhaps find a solution, not those inside the building.
I do hope the powers that be realize the severity of the situation before its too late and don't allow Spain to follow in Irelands footsteps
Woodbug
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The problem Norman has been that many of these financial "irregularities" (putting it politely) have been completely hidden by the manipulative complex detail, as with so many other aspects of legal complexity, so it is wrong to suggest that fraud was easy for Jo public to recognise.
Only when we (Jo public) are prepared to look at solutions in a calm and rational manner, taking into account the detail of how and why regulation and enforcement has failed to date, to identify strategies that will plug the gaps and ensure greater transparency and accountability, in practical terms (not rhetoric) and be willing to observe the whole picture (not from a purely selfish perspective), will we stand a chance of influencing reform.
Woodbug is right to make a start on identifying some strategies. Its is naive to suggest that all should be good in the world. We all know that without balanced enforceable contraints in place that greed and selfishness (to name but two traits!) can prove destructive if allowed to remain unchecked, and I for one am willing and keen to learn from the intellect and practical experience of others, whose motives are trustworthy and who aspire to produce a better system in Spain.
It's uncomfortable to face the fact when mistakes have been made in any system (or culture for that matter), but many would be far more respectful of those in power if they demonstrated their willingness to learn from their mistakes and widen the scope for Jo public to influence decision making.... we need politicians to be far more inclusive when striving for a better system. How better than to be prepared for that eventuality by analysing the situation in detail as it exists and opening up the debate and in the process hopefully educating Jo public to better comprehend the issues. Ignorance is no longer bliss I'm afraid.
Please keep up the educational postings Woodbug....
p.s. Keith Rule (BG petition) is a classic example of how important it is to study and analyse a problem in detail, to be inclusive in the process of establishing a strategy to achieve a solution, but never to lose sight of the continual need to influence and educate others along the way.
This message was last edited by ads on 19/07/2012.
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Good try Woodbug. Glad to see that you still hold out some hope that the hole that Europe is in can be escaped. Well, the digging has not stopped yet.
Having seen what really happened to cause this during 20 years within the bank that the fag end of Lehman Brothers landed on and has nearly killed, I can assure you with absolute certainty that there is no solution to the economic woes that now face Europe and the World.
The reasons are:
1) All of our leaders have betrayed us for decades by preaching a perverted doctrine of false democracy bolstered by television, sport and alcohol to placate us as their “good friends” with vested interests plunder our wealth and our futures. Cock-up or conspiracy? Always conspiracy. Follow the money as Deep Throat said.
2) There are trillions of dollars of CDO and CDS bets held by the banks and hedge funds that will weigh against any reform of the system or the prospect of the little people ever getting out of under the tyranny of the super wealthy by honest means. Their game is "how low can you go" and until we are reduced to living on the street, which for many is not far off, we will not be motivated enough to act.
3) The mountains of laws, regulation and rules that are annually added to the compost heap of legislation produced by the worst of the vested interests, those who believe they govern us rather than work in our interests, are secured with the criminal principle that ignorance of the law is not a defence.
What hope do we have? Be honest, play by the rules, and . . . . you cannot possibly win. You certainly cannot afford to raise children and imbue them with honest values without the meddling of a corrupt state. Those who work and pay their way are punished by paying for the many who never had any intention of working to support themselves. Who are the dupes there? The orderly, honest parts of European society are doomed and very soon, because the powers-that-be believe they are a bottomless pit of riches for them to plunder. However this time they have not left us with enough to survive. The world will follow shortly after Europe’s collapse.
So, don’t forget where all the problems came from. The armpit of the world, New York, home of the thieves who took only fifty years of manipulation of US global governance to bankrupt the world while enriching too few, along with their greatest claimed foes, the fascists who started two world wars and the communists who benefited from them.
We lost our best and true leaders in those wars, and as a result we are doomed, because that left only the dumb bastards who plotted this and who still seem to think there is another planet to evacuate to. When the true downturn comes as the swaps and collateralised debt obligations are triggered they will find out there is not. They will also find out that there are a hell of a lot of us and we are more than a little pissed off. If we don’t know where they live we will find out, because they sure like to flaunt it while mocking us, and the most stupid and corrupt of the dummies Blair and Bush demonstrated to us that their armies could not beat a primitive insurgency. How are they going to stop the destitute middle classes? Mayhem will ensue, hey, it has already started, but worse will quite possibly happen sooner than expected, when the Eurocrats are on their summer holidays in the next few weeks.
This message was last edited by Well on 19/07/2012.
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