Tuesday, 19 March 2013

Everybody still talks about how badly they were shocked

It was a fait accompli. They had made their decision before the meeting had even begun. They don't care. They want Cyprus to be the guinea pig. They want to see if this thing works. If it does, then perhaps Spain or Italy will be next. If it doesn't, then who cares about Cyprus? 1
As it happens I'd been meaning to transfer most of my savings out of Ibercaja and into the NatWest. Not because I'm expecting an imminent economic collapse (far from it, I'm expecting our slow economic collapse to carry on happening) but because the amount of money I need for a holiday in Wales this July is roughly equivalent to the total of my savings.

Life would be so much simpler if we none of us had any money. Alas, we do, in the shape of a business account, most of which we can't really transfer out of the Eurozone since it's largely needed to pay bills in Spain. In euros.

We did transfer a few thousand to a UK account last May, when Bankia was failing and we thought this might be the point where the economic collapse accelerated, and the bailout might happen, or the Euro might disintegrate or something. What actually happened what that none of this occurred and the Euro spent most of the next ten months gaining strength against the pound.

I'm not a currency trader: I'm a bookseller, and I can't be expected to possess knowledge, and act upon that knowledge, as if I were something else. I know a little economics, perhaps more than the next guy, but a bank account is where I put my money. It's not an investment, any more than a house is an investment rather than the place I live. Less so. Much less so.

This is what's wrong with the Cyprus nonsense. It's not the complexities that matter here so much as the simplicities. A bank, for most of us, is simply where you put your money. There's no "moral hazard". You're not seeking to get something for nothing. It's a necessity. You can scarcely operate as a citizen, and not at all as a business, without one. You are not making a bet with it. You're not buying shares with it. You're not making any statement about the soundness or prospects of the bank, which you are simply not in a position to know about. It is not supposed to be an act which entails any responsibility. Making a bet with it is precisely what you are not doing.

So that money cannot just be taken away from you overnight. There is no moral case for that occurring. You are entitled to believe it both safe and untouchable.

There is something barmy, beyond barmy, in the spectacle of people who have done something sensible, like save their money in a bank account, being told by people who have been reckless, like Europe's financial and political leaders, that in the name of responsibility they must see their money disappear overnight like a bike under a blizzard. I mean whose responsibility is it?
What you won't get is any explanation for why Cyprus was accepted into the euro just five years ago [or] why Brussels never tried to clean up the island's financial system.2
When I go to Ibercaja, I'm not going to a casino. I am looking after my money, not speculating with it. It's an old-fashioned place, really. In my local branch you even used to have to check down the village bar to see if the manager - is it a manager, if only one person works there? - had gone for a coffee.

It's bureaucratic. Occasionally they do stupid things like close your account to payments without telling you because some clown in Zaragoza has misunderstood something in your records. If you complain, they will say "no hace falta" ("it's not necessary") which is not a concept compatible with modern customer service. The hours (0815-1400, except Thursday) aren't very customer-friendly. Sometimes if you ask for a packet of 25 one euro coins you check it later and there's only 24. This is not the fault of Wolfgang Schäuble.

But it is not a casino, nor does it belong to Casino World. It's a world in which people from the local town use the local bank and people who work at that local bank draw a modest but secure salary. On their way home from work they stop for a coffee with the friends they've known all their lives who probably have their money in the bank for which their friend works.

This is Spain. It is, particularly, provincial Spain. Or it was. And for all its shortcomings it was a world of security rather than risk, one where the primary function of a bank was not, in fact, to make speculative property investments in order to make money very quickly and then fiddle the accounts to try and hide your sins.
A suspicion will linger in places like Italy and Spain that, although European officials insist this was a one-off deal, depositors elsewhere might face a tax on their accounts.3
So what do we do, if and when the troika come calling here, insisting that the account-holders in Spanish banks take a haircut to pay for the costs of gigantic speculation and entirely inadequate supervision, both of which were very much the troika's responsibility and neither of which had anything to do with the customers? They already stiffed the small investors in Bankia. Are small depositors in banks like Ibercaja next?
And here I sit so patiently Waiting to find out what price You have to pay to get out of Going through all these things twice4
I don't know. And I don't particularly care. Because there is nothing I can do about it, and because it's not my job to know. Don't ask me, I only bank here.

If I don't bank here, I have to bank somewhere else. The mattress doesn't accept cheques and electronic transfers. And I have no way - no way - of knowing whether it is is any safer than the bank I have. The prevailing state of existence, when you live in Sourthern Europe, is one of helplessness.

It seems to me that the nature of the present crisis is that political and financial institutions, who by and large are responsible for the disaster, are using their power to point the finger at the citizens, who and and large were not. I mean we weren't. We weren't the fucking gamblers, were we?

Sunday, 10 March 2013

Wheel of fortune

Visiting central Madrid today is like being in London in the Eighties. No row of shops is complete without at least one crumpled person in a doorway, with a cardboard sign in hand and a hat or a cup, almost empty of coins, in front of them. The difference is the graffiti: political graffiti has never really caught on in the UK, but I remember it from holidays in France when I was a child, and I see it in Spain now that I am middle-aged. We ate our lunch in the Paseo del Prado, just south of the Plaza de Cibeles, sat opposite a graffito reading
which is a tempting thought, but not actually true. No doubt the Spanish electorate voted for a different programme to the one they got, but the did vote for the people who are implementing it.

We should have been working, but we had a cancellation and therefore had a day off to visit the Museo Thyssen-Bornemisza and particularly their Impressionism and Open-Air Painting Exhibition, in which Monet's painting of poplars on the Epte reminded me of the Thames between Oxford and Abingdon. I wonder if anybody else will ever have the same thought unbidden.

Beggars in shop doorways, political graffiti, an art gallery on an unhurried afternoon. When you're looking out at Cibeles from the Thyssen, you can barely even hear the traffic, let alone see anything disturbing. There were police officers and barriers in the street, but they were merely preparing for the influx of Real Madrid fans if their team won at Old Trafford - as indeed they did - as Cibeles is where they go to celebrate. (There was a guy in a Manchester United top going round the exhibition with us, and I wondered if he had got his dates mixed up, confused the ida with the vuelta and found himself in Madrid when he should have been in Manchester.)

Next day we were back in reality and working in Alcorcón, a suburb of Madrid that barely existed seventy years ago but is now not very far short of 200,000 inhabitants, a little smaller than Móstoles, the poorer suburb to its west where we were staying. Móstoles, which reminds me of Stevenage on no basis better than the small shopping precinct near the Metro station, is more likely to remind a Spaniard of the Empanadilla de Móstoles sketch from a New Year's Eve television special years ago.

I'd like to claim that I know this because of my wide knowledge of Spanish popular culture: in fact I heard of it by accident while watching the Spanish equivalent of Wheel of Fortune. Talking of gaming wheels, the present-day population of Alcorcón is less than the total number of jobs promised by the Eurovegas project, a gigantic Las Vegas-style gambling complex which Sheldon Adelson has agreed to build in Alcorcón, provided it is exempted from the usual tax laws, gambling laws, employment laws and smoking laws.

Naturally it would be unfair to assume that this was a corrupt operation, just as it would be unfair to asssume that its model in Las Vegas was corrupt just because it was founded by the Mafia. It's merely unfortunate that just last week, while we were working in Alcorcón, Adelson's empire was accused of having been engaged in bribing overseas officials. This appears to have been in Macau - rather than Spain, as some Spaniards naturally at first assumed - but nevertheless there was an immediate political ruckus in Madrid, with the opposition essentially expressing the view that bribery and corruption are what projects like Eurovegas are for.

There must be some law about this stuff in the unofficial field of Capitalism Studies: the more ambitious the project, the more dubious the individuals concerned. It's not the first Las Vegas In Spain we've heard about: a few years ago there was Gran Scala, which was to be situated not in Madrid but in Los Monegros, the arid region north of a line between Zaragoza and Lérida and not at all far from where I live.

According to its Wikipedia entry, this project "has construction work beginning in September 2008" while "opening is planned for mid-2012", an entry which could really do with some revision since although it is now 2013, construction work has not yet begun and opening is likely to take place never.

Not to my surprise: the scheme's backers, in so far as one could find out anything about them, never seemed to have the money to go ahead with the scheme on their own, and I kind of assumed that they would try and kick off the project regardless, then leave the regional government with no option but to throw good money after bad if and when the entrepreneurs ran out of capital on the way.

In fact it never even got that far, though there was a fanfare in the regional media when some of the old boys in Ontiñena - unsurprisingly big supporters of the project given they were promised very good money in exchange for very poor land - received, as I understood it, the first tranches of their money in a public ceremony. Alas for them, that was all they were to see, as the project appeared to collapse shortly afterwards.

This was partly because of the crisis and partly - in so far as it is a separate reason - because the backers clearly couldn't find enough other chancers to stump up cash for their manifestly iffy project, though allegedly efforts to find new investors are continuing.

But it was also because one of the backers went home to London and murdered his wife. He was jailed for life.

Sunday, 3 March 2013

Badly received

"It is hard to get a receipt in Spain."
I read this claim in a piece on the BBC a couple of weeks ago, written by one Pascale Harter. It was a surprising thing to read, because it is not hard to get a receipt in Spain. I get at least one every time I go shopping.

It is not even hard to get an invoice in Spain, the distinction being important to some people, notably those of us who incur a lot of work-related expenses, some of which can be claimed back, in part, in deductions from our tax bills. We spend much the year away from home, which involves staying in hostels, hotels and campsites, buying meals, using diesel, maintaining our an and so on. A proportion of the costs involved is deducted from tax, provided we have proper documentation to justify our claims.

This involves getting an invoice - una factura - for any given transaction, rather than a simple receipt. The factura, as well as being numbered and dated, must carry our address, the name of our company, its NIF (Número de Identificación Fiscal, a registration number, much like the code carried on identity cards) and the similar details of the issuing company, be that a restaurant, a hotel, a petrol company or what you will.

It's worth, as an aside, observing that this is a very large subsidy from the public purse to a private concern. It may well be necessary in order to allow business to take place, but it is a subsidy nonetheless, yet one rarely remarked upon. When I eat out, the taxpayer shells out a proportion of the bill. When I decide to have a coffee at the end, the taxpayer divvies up some of the extra.

Leaving that aside aside, the main point for today is that these facturas are not, in fact, hard to get hold of. Or only very rarely. I am in a position to know this, because in any given term, we will have to ask for dozens of them.

They are not always given with good grace, not least because people are often busy. They are not always given straightaway. We have been told Ms Harter's story about the malfunctioning printer a number of times. We have been told the boss is not in and only they know what to do. We have been told the accountant (gestor, or gestora) will do it. We have been told to come back later, we have been told it will be sent by email, we have been told it will be sent in the post.

Yet although I rarely believe it until it happens, I am rarely justified in my cynicism. It does happen. The factura is given us. Or it arrives in the post, or by email. We have worked, or stayed, in Aragón, Cantabria, Asturias, Extremadura, Madrid, Navarra, La Rioja, the Balearics, Valencia, Murcia, Catalunya, Castilla-La Mancha and Castilla y León, which provides us with a fairly wide experience from which to speak. Sufficient experience to say that the generalisation "it is hard to get a receipt in Spain" is manifestly not true.

There have been exceptions, albeit rare ones. There was a restaurant in Pamplona which while we were there, told us the printer story, and in subsequent phone calls told us a succession of different lies. (Eventually we gave up.) There was another restaurant in Pamplona which told us even before we ate that they didn't issue facturas, a version which, for its candour and its preference for not wasting our time, I much preferred to the other one.

But other than that, it is hard to think of a time when we have been refused, openly or otherwise, a factura. Even in the hostal outside Cuenca which didn't appear to operate a register, quite likely for tax purposes, gave us a factura. A factura for customers they didn't even officially admit existed.

This is not the entire story. There are many plumbers who insist on working cash-in-hand, as indeed there are in the UK. I'm sure there are taxi drivers who don't issue receipts, but then again untrustworthy taxi drivers are not a peculiarly Spanish phenomenon.

There are open fiddles in Spain that either do not exist in the UK, or if they do, are hidden, and presumably much more easily hidden precisely for their rarity. For instance, if one purchases a house or a flat in Spain, it is not unusual, at the moment of signing contracts, for the purchaser and vendor to be invited to step into the next room, where the purchaser pays over a large sum to the vendor in excess of the published sale price. This takes place so that tax may be evaded on part of that price. Clearly such a thing could not occur unless it was known to everybody and tolerated by everybody.

Yes, for sure, the level of tax evasion, at street level as well as in business and politics, is higher than it is in Northern Europe. But as I wrote before:
The black economy in Spain is about one-fifth the size of the official economy - about twice as high, if I follow the paper, as the figure in Germany. That's a difference, but it's not the difference between good and evil, between a healthy society and a sick one. There is more corruption, and more tax evasion, in Spain than in Germany or the UK, but Spain is not properly described as "corrupt". It is not an all-pervasive element in everyday life.
It is not. And it is not, in most circumstances, hard to get a receipt in Spain. There are occasions where it is hard to get one, but that is not the same thing at all.

I insist on this partly for the simple reason that I have seen somebody write something I know not to be true, but also because the narrative of "corruption" is often used to justify austerity, or to pretend its effects would be much less harmful were it not for a corruption in which the population are complicit. (I'm reminded of the effects of sanctions on Iraq, effects blamed, by the supporters of sanctions, on the corruption of the régime, as if the sanctions themselves played no role.) But when you are on the ground, you know that the people imposing austerity are generally those most complicit in corruption, and those who are protesting most about austerity are the loudest voices against corruption too.

This is not a fault of Ms Harter's piece, which is a perfectly good one other than the bizarre claim about receipts. And it's true to say both that there's always an element of popular complicity in corruption, and that more thoughtful Spaniards understand and accept this.

But "corruption" is a term that needs to be properly defined, its nature and extent explored, rather than applied, as it often is, tout court, as a mark of damnation against peoples, societies and countries. "The Greeks" are not corrupt, nor is Greece, and though there is much corruption in Greece, involving many Greeks, you cannot thus define a country. Not Greece, nor Italy, nor Cyprus, nor Ireland nor Portugal. Nor Spain.

Because it's not like that. And it is not hard to get a receipt in Spain. But many people will have read the contrary on the BBC and if, as a result, they believe it, they will believe something which is not the case.