ARmy Rumour SErvice

**Kromeriz** · 28-08-2012, 19:40

Catalonia asks for €5bn bailout from Spain - Telegraph

We are twunts but we still do not want to be controlled. Any chances the Spanish Government will give them the high port?

To much to ask?

**Wordsmith** · 28-08-2012, 23:18

Originally Posted by Kromeriz

Catalonia asks for €5bn bailout from Spain - Telegraph

We are twunts but we still do not want to be controlled. Any chances the Spanish Government will give them the high port?

To much to ask?

Economic logic says tell Catalonia that they have to toe the line. Political logic says several regions (like the Basque region) won't like it. The choice is between the devil and the deep blue sea.

And you can add into the mix that there are three other regions that are lining up to hold their begging bowl out.

There's a bit of a conjuring trick going on here. Central government made its borrowing figures look good by offloading a lot of expenses to the regions. But that only postponed the problem. Expect more bad news out of Spain over the next few months.

The general problem is simple - both in Spain and else where. There is too much debt, but no-one wants to cut back their standard of living to control the debt.

Wordsmith

**Kromeriz** · 28-08-2012, 23:21

MODS. I posted to the wrong forum. Should be in Economics. Would you move please.

**Kromeriz** · 28-08-2012, 23:29

Thanks!

**Kromeriz** · 28-08-2012, 23:37

Deposit flight from Spanish banks smashes record in July - Telegraph

This brings the total deposit loss over the past year to 10.9pc, replicating the pattern seen in Greece as the crisis spread.

**Wordsmith** · 29-08-2012, 08:32

Spain is mired in debt - like many other countries (including the UK). You don't need to be an economic genius to see things are going to get a lot worse in Spain before they start to get better. As far as money is concerned, people and businesses have no sentiment. If they think their hard earned cash is at risk, they'll move it to somewhere safer.

This tends to accelerate the problem as the reduced capital base affects banks ability to lend. If banks are struggling to lend this hits businesses and further slows the economy.

Wordsmith

**Ancient_Mariner** · 29-08-2012, 10:32

Originally Posted by Wordsmith

Spain is mired in debt - like many other countries (including the UK). You don't need to be an economic genius to see things are going to get a lot worse in Spain before they start to get better. As far as money is concerned, people and businesses have no sentiment. If they think their hard earned cash is at risk, they'll move it to somewhere safer.

This tends to accelerate the problem as the reduced capital base affects banks ability to lend. If banks are struggling to lend this hits businesses and further slows the economy.

Wordsmith

Have they had a Northern Rock style run on a bank yet?

**Dwarf** · 29-08-2012, 18:17

Problem here is threefold.
The previous catalan autonomous government was a coalition that spent too much to keep all it's factions happy and created a lot of debt. Secondly Catalonia is one of the financial powerhouses of Spain but all the money it produces goes directly to the central government who agree to dole out a certain amount. There have been several instances of the Catalans being short-changed, and this year the government said that the amount promised to Catalonia would now not be forthcoming because they have spent it elsewhere. This amount would have allowed Catalonia to have hit their targets with reference to reducing deficit and the Catalans now feel a bit miffed at being blamed for not doing so.
There have been a lot of cuts here, often quite savage, and there is really no more leeway. Central government instead of incentivising the little guy have simply cut everything to the bone and further as well as pushing up taxes. PM Rajoy for local gain has raised VAT to 21% from next month as a 'temporary' measure. Personally as a small businessman I feel I can't pay anymore and a lot of people are cutting back on everything which affects small businesses hugely. This central government is clueless and reactionary to boot.
Thirdly if the CG refuses to help, (and after having put the boot in financially they say they will as 'so often in the past', - and they keep a straight face) then you will find a huge wave for independence taking over. I have never met so many Catalans determined that this is the way forward. Not simply have their own tax raising agency, but a full state. The CG realise that they can go too far and are having to backpedal a bit but without using their money, so this fund is a godsend for them.
The problems aren't over, 11/9 is the Catalan National day and the size of the marches for Independence will be a serious indication of how far the Catalans are prepared to go. Unfortunately the Autonomous President is crapping himself at the idea of having to live up to his words and start the ball rolling.

Watch and shoot gentleman.

**Dwarf** · 30-08-2012, 00:22

Originally Posted by Kromeriz

Catalonia asks for €5bn bailout from Spain - Telegraph

We are twunts but we still do not want to be controlled. Any chances the Spanish Government will give them the high port?

To much to ask?

Hmmm. Twunts as in elect a bunch of incompetent politicians who have no idea of reasonably safe fiscal policy and leave the country in a deep hole because most of the electorate is politically illiterate and naive, and because there is little choice from the political caste that exists? Politicians such as Broon and co.
Oh, what? Sorry, slip of the tongue there. Apologies. Politicians like Montilla, Saura and Carod-Rovira.

No they don't want to be controlled. By a central government that has a track record of rubbing their noses in it and a country that depreciates their cultural identity, well who would? Try asking any Jock, N-Iron Paddy and Taff about their views of Westminster, (and they have it easier despite what they might say) then we can talk.

Effing high-port? They have done so down a very long line for a very long time now and will continue to do so, which forms a great part of why Catalonia is in the smelly stuff. Right now they won't because someone else is footing the bill, had it been them then the Dago Treasury Razzman would have been bawling at Pvt. Catalan before you had even heard of this.

As the Señora said, that 5 bill is what we should have been paid by Spain anyway, and they spent it on themselves.

So if Catalonia gets a president with a pair of collons (pron. coolyons) anybody up for a bit of mercking?

**Wordsmith** · 20-09-2012, 23:20

There are signs of cracks in the social cohesion of some of the countries in Club Med (my bold).

Spain risks break-up as Mariano Rajoy stirs Catalan fury - Telegraph

Spain risks break-up as Mariano Rajoy stirs Catalan fury

The ruling parties of Catalonia have sought guidance from Brussels on the legality of secession from Spain, requesting a “route map” for membership of the European Union and the euro as an independent state. It is the latest move in a fast-escalating clash between Catalan nationalists and Spanish nationalists, the latter backed by King Juan Carlos and the Spanish military.

Jose-Manuel Garcia-Margallo, the foreign minister, threw down the gauntlet, calling Catalan secession “illegal and lethal”. He warned that Spain would use its veto to stop the region of Catalonia becoming an EU member “indefinitely”.

The constitutional crisis has eclipsed the parallel drama of a Spanish bail-out request from the European Stability Mechanism. It is no longer clear whether premier Mariano Rajoy can deliver on any austerity deal with Brussels.

Catalan leader Artur Mas held high-stakes talks with Mr Rajoy in Madrid on Thursday, armed with a mandate from the Catalan parliament and with charged emotions left from an unprecedented protest by 1.5m people in Barcelona 10 days ago. He demanded an independent treasury for the rich Catalan region, with control over its own tax base akin to the model already enjoyed by Basques. The 9m Catalans have an economy the size of Austria’s.

“It did not go well,” he said. The Rajoy government said Spain’s constitution allows no margin for compromise. Mr Mas refused to meet the press in the prime minister’s offices, retreating to the Catalan delegation, where he spoke before the Catalan and EU flags. “Constitutions may or may not be modified, but they do not subjugate the will of the people,” he said.

Catalonia’s parliament will meet next week to “think deeply” about its next fateful step. “Catalonia will follow its path. We have no enemies but we will build our own project as a country,” said Mr Mas.

The newspaper Confidencial reported that his Convergència i Unió (CiU) party and coalition partners have asked the European Commission whether Spain can prevent Catalans exercising democratic self-determination, and whether a sovereign Catalonia could remain part of the EU’s single market and the euro.

The speed of events has caught almost everybody by surprise, including Mr Mas himself. His CiU has, until now, pursued a policy of calculated ambiguity over secession. Mr Mas has pivoted quickly, embracing what he calls the “popular outcry” as his own. The antagonisms date back to the Franco era and, above all, to 1714 when Philip V abolished all Catalan institutions, and imposed Castilian laws and absolutism by right of conquest.

Diplomats say Mr Rajoy’s Partido Popular has provoked the latest eruption of fury by exploiting the economic crisis to break the power of the regions. This came to a head over the summer when Catalonia was forced to request a €5bn rescue from Madrid, though it is a net contributor to the Spanish state.

This has been simmering for some time. Catalan is the wealthiest region in Spain. It's long been used as a cash cow by Madrid, paying far more into the central government's coffers than it gets back. The regions have a lot of power in Spain and the Catalans are now starting to question whether they'd be better off as an independent state. That's an explosive question indeed. If the Catalans unilaterally declare independence from Spain, the Basques will follow.

Austerity in Spain is putting the entire structure of the country under threat.

You can add into the mix the escalating tensions in Greece. Syriza's vote continues to rise. And even more alarmingly, so to does the vote of the extreme right Golden Dawn. I doubt the Greek government is going to go full term - instead one or more of the junior coalition partners will pull out if they see electoral advantage. And when new elections come along, we will get an extreme government - be it of the left (Syriza) or right (Golden Dawn).

The contradictions in the euro continue to bubble away below the surface.

Wordsmith