Catalonia declared its independence today. Secession was approved by only 70 of the 135 legislators, with the pro-Spanish parties walking out of the chamber after arguing passionately against the move.Lawmakers from three national parties - the People’s Party, the Socialists and Ciudadanos - walked out before the vote. Members of the pro-independence parties and the far-left Podemos then voted 70-10 in favor...and used a secret ballot aimed at impeding any attempt by Madrid to file criminal charges on them.
I've reported previously what the press isn't...that there's a lot more to this than meets the eye, and Muslim migration into Catalonia is a factor.
At any event, the deed is done, and Spanish PM Rajoy is going to have to take control of the situation. The Spanish parliament is almost certain to approve of using Article 55 of the Spanish Constitution to restore central control over Catalonia. Rajoy has already dismissed the members of Catalonia's regional government, including Catalan First Minister Carles Puigdemont, who could face years of prison for what he just did.
Catalonian separatists are already enforcing a kind of civil rebellion, demanding that civil servants in Catalonia refuse to cooperate with their counterparts in Spain. And even though many Catalonians want to remain part of Spain, there are enough hotheads to spark real violence as Spain attempts to restore order.
Rajoy really has two choices. He can send in the paramilitary state police, the Guardia into Catalonia to take control and simply take the fallout as he did when they went sent in to stop the illegal referendum. Or he can try and find some reasonable actors to deal with and perhaps discuss new elections and changes that could be made.
I personally doubt the second choice is a viable option, but we'll see.
The world, and especially the EU was shocked at the brutality the Spanish government used in an attempt to suppress a referendum on Catalonian independence. The paramilitary Guardia Civil was particularly brutal as they invaded polling places. Over 800 people were reported injured as well as a dozen of so Guardia:
Catalonia is the extreme northeast of Spain. It consists of four provinces: Barcelona, Girona, Lleida, and Tarragona. The capital and largest city is Barcelona.
Catalonia was originally an independent principality with its own language and culture. That ended after the War of Spanish Secession in 1714, when Catalonia picked the wrong horse, Spain was essentially united by the Bourbon Philip V of Spain and Catalan was replaced on all legal documents with Castilian Spanish.
But Catalonia has remained something of a separate part of Spain, with a unique culture. During the Spanish Civil War, Catalonia, which had socialist movements as an important part of its politics dating back to the mid 19th century sided with the Republic against Franco, which again led to a certain amount of repression when Franco won, including abolishing Catalan institutions and banning the official use of the Catalan language again. Things eased up in the latter part of Franco's rule, and considerably more after Franco died in 1975.
The current independence movement started in 2014, and the current referendum proceeded as planned by Catalonia's regional government even after Spain's courts declared that the referendum was illegal. Proponents of Catalonia's independence say they won, while Spain says otherwise since in their point of view the entire referendum was illegal.
While many people now want to see Catalonia gain its independence (and the Catalonian independence movement wants to join the EU as a separate, independent country) there's an interesting detail that no one's mentioning, and it definitely figures in.
Catalonia has always trended a lot more to the Left than the rest of Spain. And it is slowly but surely in the process of Islamization, aided and abetted by its regional government. For more than a decade the Muslim population of Catalonia has been rapidly growing, because Catalonia's politicians have made it a prime destination for Muslim migrants and 'refugees.' A large part of the population, now well over 7% of Catalonia, has become radicalized (or already were) and are calling for the establishment of a Muslim state in what they still refer to by the name of their former conquest, as 'al-Andaluz.'
The Islamization was deliberately started and encouraged by the Catalonian separatist movement.
The central person of the Catalan independence movement is Jordi Pujol, who was from 1980 to 2003 the president of the Generalitat de Catalunya, literally the governor of Catalonia. Aside from being indicted along with members of his family for massive corruption and money laundering, Pujol and his cronies decided that Islamic migration was the solution to Catalonia's low birth rate and their plans for an independent Catalonia.
The separatists hoped to get lots of of cheap labor forces which they could win over as Catalonian nationalists for the separatist movement. And they also figured that these new migrants would be taught to be Catalan speakers. After all, a worker, who could only speak Catalan and Arabic and was dependent on social benefits would hardly be able to leave Catalonia.
So the Muslim population grew to more than 500,000 and even more, when you take the amount of illegal migration into consideration. In 2012, the second most common name in the province of Girona was Mohammed. In the region of Segarra (Lérida), 55% of the children born in 2014 had foreign mothers. Salt (Girona) has become a major center of Salafis and Islamists:
Besides Salt, other towns too became centers of Salafist Islam in Spain. The movement has its seat in Tarragona, but has important branches in Badalona, Calafell, Cunit, El Vendrel, Gerona, Lleida, Mataró, Reus, Roda de Bara, Rubí, Santa Coloma de Gramenet, Sant Boi, Torredembarra, Valls, Vic and Vilanova. Barcelona alone has 5 Salafist mosques. Just like elsewhere, the Salafists in Catalonia preach that the Sharia law is above Spanish law, they push the development of Muslim parallel societies, and have established sharia courts and morality police that enforce the adherence to Islamic rules. Catalonia's seperatists made the same mistake Angela Merkel made. They never figured on Islam taking them over instead of integrating peacefully. Catalonia is now one of the most important Mediterranean centers of radical Islamists.And potentially a base in Europe for the takeover and expaniasion of Islamism into places like Spain, southern France and Italy.
The EU is likely to even encourage this scenario by extending EU membership and financial incentives to a newly independent Catalonia in exchange for using it as a dumping ground for the Muslim migrants and refugees countries like Denmark, Hungary, the Czech Republic and Poland are refusing to take. And for the surplus Muslim migrants Germany and France want to rid themselves of.
Of course the catch for that brilliant plan is that these Muslims are unlikely to be content with retaking Catalonia, or even all of Spain. They will expand north, just as they did in the 14th century.
When you take these facts into consideration and consider Spain's own history with Islam, the idea of an independent Catalonia takes on a very different aroma.
Now, what could be nicer than having your own luxury apartment with ocean views within walking distance of the beach on Spain's ritzy Costa Blanca? The InTempo building pictured above looks perfect, doesn't it? Couldn't you just imagine it for a couple of weeks as a rental, or a nice little vacation spot?
Not only that, but you're going to get plenty of exercise, so bring comfortable shoes. Because the building was somehow constructed without a single elevator shaft!
Verdad, amigos. But wait it gets better.
The project was originally was initially funded by the bank Caixa Galicia to the tune of $122.8 million in 2005, but as of December 2012, financing was taken over by Sareb after Caixa Galicia bailed out, lending the builder an additional $14.7 million.
Believe it or not, both the builder, Olga Urbana, and the original lender Caixa Galicia should have received a wake up call when they found out (after about 23 floors had been completed) that there was no service elevator installed for the 41 workers who had been hauling materials up 23 flights of stairs. Instead, Caixa Galicia bailed out, and Olga Urbana somehow forgot to mention this little detail to Sareb - who also apparently never visited the building site before forking over all that money.
To make it even more of a fiasco, because of the way the building was designed there isn't any place for elevator shafts, which leads me to wonder what the architects were smoking when they designed it. Since InTempo is 94% completed, the only solution is to tear down some of what's been completed and make provisions for external elevators, like the ones at the Bonaventure in Los Angeles. At a significant cost increase, of course...which also includes $3.3 million owed to suppliers that hasn't been paid yet as well a few pending court cases claiming fraud.
Meanwhile 35% of the luxury apartments were already sold to people whom had no idea an elevator wasn't included. Just imagine if somebody bought the penthouse!
Provided some of these insignificant details can be ironed out, the building is currently scheduled to be finished in December.
Next week, there is a major summit of EU leaders scheduled. They're going to try to hash out some way of dealing with their ongoing fiscal crisis. Italy's Prime Minister Mario Monti was fairly stark about what's at stake.
As I predicted earlier, Spain's bailout without the insistence of major austerity measures and reduced government spending had been the signal for what amounts to a 'gang bang' on German Chancellor Angela Merkel. Not only does Italy expect a bailout on similar terms, but Portugal and Ireland now want their bail out agreements amended to cut back on mandatory austerity measures. And they now have another important player piling on Merkel - the head of the International Monetary Fund, Christine Lagarde:
IMF managing director Christine Lagarde warned that the euro is under "acute stress" and urged eurozone leaders to channel aid directly to struggling banks rather than via governments. She also called on the European Central Bank (ECB) to cut interest rates.
The stark message from Lagarde, delivered to eurozone finance ministers who were meeting in Luxembourg, will increase pressure to come up with a unified approach to tackle problems including Spain's struggling banks. She urged the 17 eurozone countries to consider jointly issuing debt and helping troubled banks directly. She also suggested relaxing the strict austerity conditions imposed on countries that have received bailouts.
"We are clearly seeing additional tension and acute stress applying to both banks and sovereigns in the euro area," Lagarde said after the meeting. {...}
One of Lagarde's recommendations for Europe was that eurozone leaders should consider issuing bonds or debt "in some form" backed by the governments of all member countries. Berlin opposes the idea because it would put German taxpayers on the hook for foreign debts and increase the country's cost of borrowing.
In addition, Lagarde said it was necessary to break "the negative feedback loop" that occurs when governments take on more debt to bail out their banks, and she called on Europe's two emergency bailout funds to shore up shaky banks directly.
Let's translate what 's going on here, and more importantly, who it's coming from.
This the head of the IMF, a crucial player in the world's financial order and a major potential source of funds for the EU's troubled economies. And what she's telling Angela Merkel and the Germans is that the IMF's support for the eurozone is questionable unless the Germans and other healthier members of the eurozone agree to purchase Greek, Spanish, Italian, Irish and Portuguese debt that the market has already decided are perfectly lousy investments. Moreover, she wants that debt purchased at at artificially lowered interest rates, and she wants the money to go directly to the banks, so the entire eurozone is on the hook for it rather than individual countries.
The idea here is simple. If the Germans bend over for it,the contagion from the affected countries will be spread throughout the entire system. At the same time, the 'purchase' of the debt plus low interest rates will allow the affected countries to chuck any ideas of fiscal austerity and engage in 'growth' - a euphemism for increased government spending.
If Angela Merkel agrees to this, she's likely to become history politically if the current polls are any indication of how the average German feels about this sort of arrangement.
Even if it goes through, it's a recipe for ruin, and I don't see how it can last for long.
As the above chart shows ( h/t Brad Plumer at the WAPO), the band-aid applied to th elatest case of gangrene in the eurozone hasn't fooled investors one bit. Spain's borrowing cost ( orange) shot upward to almost 6.5%.
Italy, the next domino in the ongoing crisis, (gray) saw its borrowing cost increase to nearly 6%.
Translation? Investors don't think they're going to be paid back, and will simply end up losing most of their investment in the form of a 'haircut', ala Greece.
The investors whom already own these securities are seeing their investments plummet in value, since not only are few people interested in buying Spanish or Italian government debt, they certainly aren't willing at the earlier, lower rates without a huge price discount.
I think we can call this a failure in any EU language you like.
As I said before, without major cuts in the European nanny state and major changes in demographics, there's no way shoveling more and more money down this rat hole can work. Debt at a level of 110% of Spain's Gross Domestic Product is simply unsustainable.
Spain, along with most of the EU is not reproducing at even replacement levels, and there simply aren't going to be enough young Spanish workers to pay the debt off. And for that matter, this also applies to Germany. There's no way 42 Germans in the future are going to be willing or able to carry the load for the eurozone that 100 Germans have been committed to carrying now...especially given how opposed those 100 are to it.
Spain has accepted a massive EU bailout of its banking sector by European finance ministers of an aid package of up to $125 billion.
Prime Minister Mariano Rajoy of Spain and members of his government are vigorously spinning this as 'aid to the banking sector' rather than a bailout, but a bailout is exactly what it is. While Spain has avoided the kind of austerity strictures forced on Ireland, Portugal and Greece, the money is not going to be given directly to the banks, as Spain wanted.Instead, it's going to be distributed to the FROB, the Spanish government agency responsible for regulating Spain's banks, as who previously handled a Spanish government funded bailout for Spanish banking giant Bankia. That means the Spanish government rather than the individual banks are going to be responsible for the debt, with will skyrocket to Greek levels, 110% of Spain's Gross Domestic Product.
Even worse, this is essentially a band-aid used to treat a bad case of gangrene. Spain's banking woes are due not only to a vastly inflated Euro-socialist public sector but to a huge bubble in property and construction. Not only are the full effect of the toxic loans and investments in Spain's real estate and construction sector throughout the eurozone still to be totaled up, but the debt is simply unsustainable given Spain's economy and more importantly, its demographics. There simply aren't going to be enough young Spanish workers to pay off the debt in the foreseeable future.
Being pragmatists, Ferguson and Roubini focus on practical ways to preserve the eurozone. As they point out (and as you read in these pages previously), there is a real danger of bank runs because there is no system of insured deposits in European banks, massive amounts of currency have already left southerm Europe and EU countries like Denmark and Britain that don't use the euro are erecting firewalls to keep euro deposits and out of their banking systems.
Ferguson and Roubini also call for a EU-wide banking system with no ties to any sovereign EU country, and quite rightly point out that the rise of Hitler was presaged by a banking crisis in the 1930's. Here's the part they're missing.
The EU project has already done massive damage to democracy in its nation states and foisted what amounts to an unelected bureaucracy on them. The original way this was sold was as an economic union only, that would not impinge on the sovereignty of individual countries.It's morphed into something far different.
German Chancellor Angela Merkel has allowed herself to be pressured into agreeing to loading unsustainable debt on the German people she claims to represent without their consent and, if recent polls are to be believed, over their overwhelming opposition.Not only that, but if the sort of EU-wide banking system and the accompanying controls are set up by the EU's bureaucrats,they're going to be impossible to remove without exactly the major political upheaval the current agreement is designed to try and avoid.
The truth of the matter is that Germany has benefited from the EU because it has allowed them to price their exports in a cheaper currency. But it's not hard to see a populist demagogue seeking power on a platform of nationalism and repudiation of taxes and debt based on funding bailouts the Germans never agreed to in any sort of referendum in the first place.
As I mentioned before, there's also another factor involved. Now that Portugal, Ireland and Greece have already suffered under austerity programs in order to obtain their bailouts, is there any incentive to their continuing to do so now that they see Spain getting its bailout without them? And let's not even mention Italy, the next eurozone country likely to need one.
Chancellor Merkel at least had her gut level instincts in the right place when she was talking about the need for austerity, which basically meant curbs on the EU's bloated public sector spending. Having been hammered by the new socialist government of France and weighing the damage to Germany's export based economy, she's now decided to go with the flow and wearily acquiesce to 'growth' which is a socialist euphemism for even more government spending. And the centralization of the eurozone's banking system in order to recapitalize the debts of countries like Spain merely spreads the infection to the remaining members that still retain a degree of financial health.
German Chancellor Angela Merkel appears to be caving in:
A deal is in the works that would allow Spain to recapitalize its stricken banks with aid from its European partners but avoid the embarrassment of having to adopt new economic reforms imposed from the outside, German officials say.
While Berlin remains firm in its rejection of Spain's calls for Europe's rescue funds to lend directly to its banks, the officials said that if Madrid put in a formal aid request, funds could flow without it submitting to the kind of strict reform program agreed for Greece, Portugal and Ireland.
Instead, Spain would only have to agree to new conditions tied to the reform of its banking sector. Berlin is also exploring the possibility of funneling aid to Spain's Fund for Orderly Bank Restructuring rescue mechanism (FROB) to reinforce the message that it is the country's banks and not its public finances which are at the root of its problems.
The evolving German stance on aid for Spain is the latest evidence that Chancellor Angela Merkel is adopting a more flexible approach to solving the euro zone's deepening debt crisis.
There are a few problems with this.
First of all, Merkel is going to have to somehow convince German taxpayers to go along with it.
Second, the amount of money requested is staggering, larger than any previous bailout. At current birthrates, Germany's newer generation of taxpayers is going to be far less than its current one, and Spain is even further behind in reproducing its present population. If a debt of 110% of Gross Domestic Product can't be paid off now by 100 Spaniards, it's highly unlikely that 30 Spaniards are going to be able to do it. Nor is it likely that 42 Germans are going to be able to continue to support the same level of largesse for the entire eurozone that 100 Germans do today,paying off long term debts that are essentially valueless at his point anyway, since they're based on a real estate and construction bubble that makes what happened in America look benign by comparison.
And third, Chancellor Merkle is going to be pinned down on the sofa and subjected to what I call the gang bang rationale.."hey, you did it for him, you can do it for me, so just lay back and enjoy it."
The Greeks, the Portuguese and the Irish have already been subjected to severe austerity packages for past bailouts, and those programs, if you can call it that, are still ongoing. After seeing Spain get even more money for doing absolutely nothing but threatening to leave the euro, they're going to want their austerity programs waived too..or else. And other countries in similar territory, like Italy, are going to want to pull the same thing.
Merkle and Germany would be far better off telling Spain (and Greece, for that matter) to get bent. Either that, or simply writing off their debts and taking the pain now while it's still manageable rather than spreading the infection throughout the eurozone.
To go back to the analogy I used the other day, it's a choice between amputation and learning to enjoy gangrene as it spreads throughout the remaining healthy parts of the body.
Standard & Poor’s just slashed the credit ratings of Spain's top five banks after previously downgrading ratings on 11 Spanish banks back in late April. Moody's followed suit soon after.
Bankia, one of Spain's largest banks that was partially nationalized recently after a 4.5 billion euro bail out has asked the Spanish government for a further 19 billion euro ( $24 billion). One in ten bank accounts in Spain are in Bankia. It's an open question whether Spain can afford to bail out Bankia...or whether it can risk the social unrest that would come form letting it tank.
Bankia's rating was cut to BB+, one notch into junk status, from BBB-, while another bank BFA, which was already in junk status, was cut to B+, four notches into junk territory, from BB-.
Aside from an out of hand welfare state glommed onto by thousands of immigrants from North Africa and the Arab world, Spain has a serious problem with more prosperous regions like Catalonia being called on to fund poorer areas .
And Catalonia has just told Madrid that it is running out of cash.
Spain's big ace in the hole was that it had done a reasonable job selling its debt thus far, about half of what the country will need for 2012. But now Catalonia, by far Spain's most properous region has informed Madrid that it needs help from the central government because it's running out of options for refinancing any more debt for this year.
Meanwhile, its highly indebted regional governments face 36 billion euros of debt refinancing bills this year, far above the previously stated 8 billion.
Will Spain go to the IMF and/or eurozone's rescue fund to make up the difference? And will German taxpayers be willing to stick their hands in their pockets again?
Believe it or not, Antonio Cosme Velasco Soriano, 69, only received a nine year sentence for snatching a 13-year-old girl off the street when she was shopping for her mother and raping her at knife point. There was no serious doubt that Soriano had done the deed, and the sentence represented a plea bargain.
Apparently he was let out on a three-day pass and returned to his home town of Benejúzar. While he was there, he passed his victim's mother in the street and taunted her about the attack, calling out "How's your daughter?", before heading into a crowded bar.
Mom returned to the bar, turned Soriano around to face her, pulled the bottle she was carrying from under her arm, poured it over him and then lit a match.
Soriano suffered 60 per cent burns on his body in the attack and survived for 11 painful days before succumbing to his injuries.
The mother fled to Alicante, where she was arrested the same evening. When she appeared in court the next day in the town of Orihuela, she was cheered and clapped by a crowd, who shouted "Bravo!" and "Well done!"
The woman claimed to have no recollection of the attack.
I have no information on how the case was ultimately disposed, but I ask you - was she right or wrong? What would you do if someone scarred you and one of your children for life and was walking around free as a bird and taunting you about it?
More to the point, do you think that this incident might make potential rapists in this little corner of Spain think twice before hurting someone?
This is one of those ultimate issues things I love to discuss!
