Archive for the ‘Spain’ category

The Silent Triumph of Linux

April 24, 2012

Linux LogoThe Linux Penguin

The Silent Triumph of Linux
Cell phones, businesses, critical environments, and the infrastructure of the Web all function with this system
El País: Linux, el triunfo silencioso
Laia Reventós reporting from Barcelona April 22, 2012

When you navigate the Internet, you use Linux. When you search on Google, gossip on Facebook, or play with your Android phone (850,000 of those are activated each day), you also use this operating system. When you see a movie on an airplane, take money from a teller, or make a long-distance phone call…yes, Linux is at the heart of multiple daily activities, even though you aren’t conscious of it.

The most installed open source operating system in the world and the motor of free software still is not massively installed in desktop computers, where Windows reigns with 92% of the market. That is the same share it had in the 90s, when Linus Torvalds (born in Helsinki in 1969) developed Linux. On Friday, Technology Academy Finland recognized its compatriot for creating a system which has had “a great impact on the development of open source programs, work on the Internet, and the opening of the Web to make it accessible to millions of people.”

Torvalds was a 21-year old student of computer engineering at the University of Helsinki in 1991. In his room, he began “a small project. It was something fun to help my learning, but it ended up having everything an operating system is supposed to have.”

The youth released the first version of Linux on the Internet, and word of mouth did the rest for a system protected by the General Public License (GPL), which permits its use, copying, modification, and free distribution. As opposed to other systems, Linux has improved thanks to collaboration. Close to 8000 developers and 800 companies have contributed to its 15 million lines of code since 2005. The Iliad had 15,000 lines. Every three months, a new version of the core system is released under Torvalds’s supervision.

“Linux was the first modifiable operating system that could be installed and used by anyone,” explains Miguel Jaque, director of Spain’s National Open Source Technology Center (CENATIC). “You could find out how its code worked. The secret was out. And that allowed the peak of free software to begin.”

Twenty years later, the system still has not gatecrashed domestic computing (it has a 0.98% worldwide market share according to Netmarketshare), but it rules mobile phones, businesses, data centers, critical environments, and the infrastructure of the web. 80% of stock transactions have the penguin symbol beneath them. Even televisions and cars use it. 25% of their costs are for software, and in four years the proportion will be 75%. For that reason, giants like General Motors, BMW, Hyundai, PSA Peugeot Citroën, and Renault-Nissan have constructed an open platform for entertainment and information systems (the GENIVI Alliance).

In Spain, the management and education communities have led Linux’s advance. 83% of public organizations have some kind of open software installed for them. Don’t forget that Extremadura took the lead in providing computers for its students with its Linex system in 2003; it just don’t preach about it much. This tide has swept to seven other Autonomous Communities, including Andalusia and Catalonia (Lincat). The Andalusian system Guadalinex now serves 1.8 million students in 5882 schools with a network of 640,000 PCs and 4200 servers.

What are the advantages? “It reduces costs because the license is free; you can change providers without problems, and you can personalize all the components,” says Jaque. Munich City Hall has saved a third of its technological budget (€4 million) thanks to Linux, and now, in a time of crisis, it could save more if its civil services “save and reuse their computing resources.” In 2011, according to CENATIC, 46% of civil services created their own programs, but only 18% set them free.

Nun Accused of Stealing Babies Declines to Testify in Court

April 23, 2012

Sister María Gómez Valbuena
Sister María Gómez Valbuena leaving Madrid Trial Court 47 after declining to testify. Photo by Cristóbal Manuel.

Mothers of Stolen Children
Those affected by the theft of children spent the night in front of the Sisters of Charity’s school where the accused nun lives holding yellow candles and cards with their petitions.

Nun Accused of Stealing Babies Declines to Testify in Court
Sister María Gómez Valbuena is still charged with illegal custody
Tomorrow, the judge will call for testimony from the adoptive parents of the daughter who was supposedly robbed

El País: La monja acusada del robo de bebés se niega a declarar ante el juez
Natalia Junquera reporting from Madrid April 12, 2012

Sister María Gómez Valbuena declined to testify before a judge about her supposed involvement in a case of baby theft.  She is still charged with illegal custody, the charge about which she was called to testify today. Judge Adolfo Carretero said he will call the adoptive parents to testify tomorrow about their supposedly stolen daughter. The nun is the first person to be directly accused after 1500 denouncements were made all around Spain by mothers who believe their children were stolen after birth.

Gómez Valbuena, wearing the habit of the Daughters of Charity, arrived at Madrid Trial Court 47 a little after eight, an hour and a half before her appointed time, accompanied by another religious from her congregation. She attempted – successfully, when she entered – to avoid the multitude of media members waiting for her, many of them from abroad. After availing her right to not testify before the judge, she left through a side entrance, the one used for night court, escorted by several members of the municipal police, but she could not avoid the media then.

Nor could she avoid the other mothers accusing her of robbing their babies; when they saw her, they shouted, “Shameless!” and “We want to see your face!” while Sister María entered a black all-terrain Mercedes Benz with tinted windows in order to depart the judicial premises.

The nun, who is 80 years old, has contracted the services of José María Calero Martínez, the lawyer for the parents of murdered minor Marta del Castillo. The Madrid District Attorney’s Office called her to testify after she was accused, and she declined to speak then, as well. Dozens of mothers who are seeking their children and who have seen their cases put in the archives of DA’s Offices around the country for lack of evidence have put all their hopes on Sister María telling the judge what she did and what she knows.

The case for which the judge called the nun forward as defendant is that of María Luisa Torres, who gave birth to a daughter, Pilar, in the Saint Cristina of Madrid clinic in 1982. She claimed that Sister María seized the child and threatened she would take the mother’s other daughter, as well, “because of your adultery”. Thanks to the help of Pilar’s adoptive father, the mother and daughter were able to reunite last year, 29 years after the birth. Last week, both testified to the same judge that interrogated Sister María today. “If she doesn’t pay in this life, she will pay in the next one,” Pilar said about the religious before she entered the court. “She deserves the highest punishment,” Pilar’s mother added.

Urdangarin’s Ex-Business Partner Implicates the King of Negotiating in Favor of his Son-in-Law

April 22, 2012

Jorge Forteza and Pedro Perelló
Jorge Forteza and Pedro Perelló in 2007. Photo by Tōru Shimada.

Urdangarin’s Ex-Business Partner Implicates the King of Negotiating in Favor of his Son-in-Law
Diego Torres remitted three emails with documents to the court
The Duke says, “He has told Cristina that in principle, there won’t be any problems.”

Duke Iñaki Urdangarin affirmed in three 2007 emails that the king acted as a mediator so his son-in-law could participate in a new yachting team for the 33rd America’s Cup. The documents were remitted by Urdangarin’s ex-business partner, Diego Torres, to the Palma court which is investigating the activities of Instituto Nóos. The Ayre Project, which still has not found prosperity after that fiasco of a sporting event, was managed by Pedro Perelló and Jorge Forteza – regattists, businessmen, and friends of the princes and princesses – with the support of the Duke of Palma.

In one of these communications, dated September 30, 2007, Torres asks the duke about his “experience” in seminars about urban planning in Philadelphia and informs him that Perelló has spent “a good while on the telephone every day” to intensify his contacts with the public administrations of the Valencian Community. The following day, Urdangarin answered him form Washington, “I bring a message on behalf of the king, and it is that he has commented to Cristina, so that she could pass the message on to me, that he will get [Francisco] Camps in touch with Pedro in order to tell him about the theme of the base of the Prada. And that in principle, there will not be any problems, and they will help us get it,” said Urdangarin in allusion to the necessary installations in the port of Valencia to hold Project Ayre’s future boat.

In this same email, Urdangarin informed Torres that “there could be a little something for the foundation” and lamented that the entity’s website was not in English. “It would give a more international touch,” the Duke said, and he added that Agustín Zulueta, leader of the Desafío Español (Spanish Challenge) crew – the team that participated in the 2007 America’s Cup – “had asked Cristina to coffee to talk about something that couldn’t be discussed over the phone.” “It was mysterious, but it seemed serious and important,” he averred.

The messages about the ambitious sailing project which Torres’s lawyer, Manuel González Peeters, handed to the judge, piled up on August 9, 2007. Urdangarin then revealed a supposed encounter between King Juan Carlos and Perelló. “We arranged a meeting between the king and Pedro in order to present the project. It went very well, and apart from seeming very well put together, the king has offered all his help in finding financial assistance,” he said to Torres, to whom he added, “Enjoy the cruise.”

Later, on September 10, the husband of Princess Cristina wrote a message to Perelló which again lead with the supposed actions the king had taken to make sure the project arrived safely in harbor. “The king commented to me that one of his friends had done the negotiating we requested with Miguel Fluxa,” in allusion to the owner and president of the Iberostar group, Miguel Fluxá. “From my end, I’ve given [Fluxá] the ear of BBVA so he can give a push to Paco González,” Urdangarin explained to Perelló.

The messages also reveal certain differences over the (failed) presence of a second Spanish team at the America’s Cup. Zulueta affirmed in an October 2007 conversation that he felt “more peaceful” after speaking with “Cristina” and that he believed Perelló “will not continue sending surprising documents to our sponsors.” The tone, despite it all, is conciliatory, and he informed Urdangarin that “the Desafío Español has nothing against another Spanish team taking part, and if course, it has not acquired any right to be the only team.” This relieved “a worry on our end.”

The message sent by another of those implicated in the Nóos case, Antonio Ballabriga, chief of the corporate affairs of BBVA and friend of the Duke, confirms that Urdangarin went forward with his activity in Nóos and his business with public entities. This, despite his formal renunciation in March 2006 and after the king’s emissary, José Manuel Romero Moreno, advised him that spring to disassociate himself with the business. “As we’ve established, we’ll meet at 10 in Nóos to talk about meetings for the European Games project.”

After the 2009 America’s Cup
J.G. reporting from Barcelona and A.M. reporting from Palma

The Mallorcan regattists Pedro Perelló and Jorge Forteza conceived of a project to give Spain a second representative in the 2009 America’s Cup in Valencia. They wanted a team capable of competing to win, and for that they needed to raise at least 100 million euros. Despite their efforts, and despite the Ayre project being enrolled as a challenger by America’s Cup Management (ACM), the project did not prosper.

In 2007, Perelló won the King’s Cup for sailing with a boat named Siemens in which Prince Elena was a navegator. It was then that the regattist and shipowner tried to put together a great team in order to participate in the America’s Cup. Perelló never hid who the project’s godparents were, and he affirmed that the project counted on the active participation of Urdangarin (who was to take charge of the “social and cultural” area of the project) and the blessing of the king, as well. Duke Urdangarin retired after the project. Three years later, one of his businesses dedicated to “sports patronage” (Promorace, FL) was condemned to pay 34,000 euros for abandoning a sailing ship in the installations of the Royal Nautical Club of Palma. The judge obligated the business to “vacate the installations.”

Perelló paired up with a person who could provide more economic muscle for the project, businessman Jorge Forteza, duke of the real estate company Nova. Forteza was tthe “fourth player” that participated in the table tennis game in the palace of Marivent Urdangarin, along with regattist and ex-Director General of Sports Pepote Ballester and ex-President of the Balearic Islands Jaume Matas, who were also imputed in the Nóos case. There, Urdangarin confirmed his patronage of the Illes Balears cycling team. Nóos bought to apartments in Novaen Palma. In addition, Forteza was an intermediary for buying and selling terrain for Mallorca’s territorial program, which was investigated by the attorney general. The BMW Oracle team took the plan for the 33rd America’s Cup to court, where the project was paralyzed more than a year and a half before it was finally cleared.

Saudi Businessman Paid for Spanish King’s Hunting Trip in Botswana

April 21, 2012

King Juan Carlos Hunting
The King. Date undetermined. Photo by Rann Safaris.

Saudi Businessman Paid for Spanish King’s Hunting Trip in Botswana
Mohamed Eyad Kayali resides in Spain, where he represents the Royal House of Saud
El País: Un empresario saudí pagó la cacería del Rey en Botsuana
Mábel Galaz reporting from Madrid April 18, 2012

The King went on his controversial hunting trip to Botswana on invitation from Saudi businessman Mohamed Eyad Kayali, who has lived in Spain for years, as reported by El Mundo and confirmed by sources with knowledge of the expedition. Kayali, who has properties in Madrid and Marbella, usually acts as a representative of the Royal House of Saud in Spain, defending and driving their business. This lobbyist of Syrian origin was one of the people who accompanied the king on his safari.

In other news, whether it is coincidence or not, Queen Sofía decided to spend two anda half hours in the Hospital USP San José yesterday, where Don Juan Carlos is recuperating from a hip operation which began at dawn Saturday. This long visit was ten times longer than her first, on Monday, which was reduced to 15 minutes.

The royal family knows that its place in the public square is important and should be untainted by personal problems, which are private business. So the king and his children have decided to close ranks. All have gathered around Don Juan Carlos, the visible head of the Crown, who has never been in the eye of such a hurricane.

Doña Sofía arrived at the hospital at 1:30 PM. The Royal Family reported that the two had decided to have lunch together. They even gave details abot the menu. They both had greens for their first course. After that, the king requested a sirloin steak and the queen a hake; she no longer eats meat. Their private date was different from the visit on the first day, when they were surrounded for those few minutes by doctors and retainers.

The queen left the lunch smiling and relaxed and approached the press to inform them her spouse is “phenomenal”, “has an appetite”, and “is doing very well”. She only added, “I’ll say nothing more because there is nothing more to say.” As Doña Sofía approached her automobile, she heard a voice asking, “What’s your opinion of the trip to Botswana?” She did not respond. No one really expected her to.

The stage of closing the family ranks was completed yesterday with the visit of the Prince of Asturias, who has continued representing his father at public functions, yesterday in Valencia and today in Murcia. And with the presence of Doña Elena, who left her convalescing son for a while in order to be with her father, with whom she is especially close. She said about criticism of the king, “I haven’t heard anything; I’ve been working.”

Everything indicates that the king will be able to leave today. The director of USP San José, Javier de Joz, read the new medical report at noon on Tuesday and assured that the king is “showing great progress”. He explained that they had practiced new remedies and had intensified his rehabilitation, with several sessions per day.

Kirchner Extends Nationalization Threat to Other Groups like “Telecommunications Companies and Banks”

April 19, 2012

Kirchner Extends Nationalization Threat to Other Groups like “Telecommunications Companies and Banks”
Spanish firms are engaged in a wide array of enterprises in Argentina
El País: Kirchner extiende su amenaza a otros grupos como “telefónicas o bancos”
David Fernández reporting from Madrid April 16, 2012

The expropriation of YPF could be only the beginning of a nightmare for Spanish businesses. During her announcement of the nationalization, Argentinean President Cristina Fernández de Kirchner threw down the gauntlet before other foreign business interests in the country, like “telecommunications companies and banks”, about the “necessity” of reinvesting their earnings in Argentina.

After speaking about Argentina Airlines and its disappearance, the president moved on to comment on other sectors in which Spain has investments in Argentina. “We’ve made it clear that the businesses that are here, even if their stockholders are abroad, are Argentinean businesses,” she began. She referred to “telecommunications companies, some of which are Spanish and which have recently submitted us to blackouts. I hope that the Ministry will promptly respond to this,” she charged, clearly referring to Movistar. “And the foreign banks, as well…in sum, we don’t have a problem with profitability, but these profits must be reinvested in the country in order to help the country grow,” Fernández resolved.

The internationalization of Spanish businesses began in Latin America, and Buenos Aires was one of the first ports of call for these then-incipient multinational corporations. In recent years, the importance of Argentina on the bottom lines of these sought-after businesses has decreased in favor of other economies in the region (principally Brazil, Mexico, and Chile), but the Argentinean market continues to be a net contributor. This is the exposure that the principal Spanish companies have to Argentina, according to fiscal 2011 data.

Repsol: YPF provided 17.42% of operating revenues (~€11,105,000,000) and 25.61% of gross profit (~€1,231,000,000). Last year, Argentina received more of Repsol’s investment money than any other country (€2,182,000,000, 33% of the total). There are 15,119 Argentineans on Repsol’s payroll, 32% of the total, making them the second most numerous nationality on their staff after Spaniards.

Telefónica: Kirchner, without referring explicitly to the Spanish operator, has sent a message to Telefónica in reminding them of the “blackout” that some enterprises “have submitted us to recently”. This April 2, a breakdown in Telefónica’s Argentinean affiliate’s mobile phone service affected 16 million users and a smaller number of landline users. After the blackout, the Argentinean government signaled that it would study how to impose the “maximum” fine possible on Movistar, which indicated its intention to compensate its clients in the country for the blackout.

Telefónica of Argentina has licenses which permit it to provide landline, cellular, and Internet telephone services. These licenses will not expire, but as the operator recognizes in its annual report, “they can be cancelled by SECOM (the Secretary of Communications) for failure to complete the terms of the license”.

Telefónica has 21.9 million clients in Argentina, principally for its mobile phones (15.9 million users); it enjoys a 29.8% market share in the cellular market. The net total of the bills for this division in that country last year was ~€3,174,000,000, while its Operating Income Before Depreciation And Amortization (OIBDA) reached ~€1,085,000,000. Telefónica’s Capital Expenditure (CAPEX) in Argentina in 2011 was €449 million.

Banco Santander: Santander Río is the country’s principal private bank, with 358 offices, 2.5 million individual clients, and 6,777 employees. In 2011, the affiliate had gross earnings of €926 million, net earnings of €472 million, and €287 million in profits. Argentina contributes 3% of the Santander Group’s profits.

BBVA: The entity controls 76% of the capital of BBVA Banco Francés. In 2011, the Argentinean division earned a net profit of €315 million and an attributed profit of €157 million, a quantity which represents 5.2% of the group’s total profits. BBVA has 4,844 employees in Argentina, 4.4% of its total employees.

Endesa: The services of the generation and transportation of electricity provided by Endesa’s Argentinean affiliate netted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of €118 million in 2011. In addition, since the beginning of April last year, two interconnecting lines between Brazil and Argentina have begun to receive regulated remuneration, producing an EBIDTA of €127 million. The distribution business, for its part, had operating losses of €23 million, as greater fixed costs as a consequence of inflationary recovery in the country could not be recuperated by the bills charged to clients.

Gas Natural: The distribution of gas in Latin America earned the company an EBITDA of €621 million in 2011. Brazil, Colombia, and Mexico are Gas Natural’s principal markets; Argentina only contributed €27 million of its EBITDA.

Mapfre: Argentina is the insurer’s fourth most important market in Latin America. In 2011, it contributed €457 million in premiums (2.33% of the insurer’s total) and €18 million to Mapfre’s bottom line.

DIA: The distributor sold a total of €11,123,000,000 in products last year. Its principal markets are Spain, Portugal, and Brazil. Argentina is fourth, although it was the fastest-growing market in 2011, contributing 7.8% of the chain’s sales (€868 million). DIA opened 47 new stores last year for a total of 495 there.

Prosegur: The security company grossed some €500 million in the Argentinean Area, which also includes Paraguay and Uruguay, in 2011.

Codere: Codere Argentina is the principal operator of bingo sales in the province of Buenos Aires, with a total of 14 functioning rooms and more than 5000 recreational machines installed. This South American country contributes more to the group’s revenue and EBITDA than any other, €553 million and €165 million respectively.

NH Hoteles: On December 31, the group had 13 hotels open in Argentina (11 owned and 2 others under management) with a total of 2049 rooms.

What If The King Hadn’t Fallen?

April 17, 2012

Tintin in Africa

Tintin picture courtesy of ADAGP, Paris, 2009

What If The King Hadn’t Fallen?
El País: ¿Y si no se hubiera caído?
Antoni Gutiérrez-Rubí blogging April 14, 2012

King Juan Carlos has lost contact with reality. At least, that’s how it seems. Only profound disorientation and disconnection with the society which he should serve would begin to explain why it would seem like a good idea for him to hunt elephants. The trip was absolutely untimely, uncalled for, and unwarranted.

Untimely, because the current moment is one of the most critical for Spain’s international reputation. The monarch’s trip, an inopportune caprice, does not contribute to the image of moderation, force, and sacrifice that we should give in our fight for our reputation in the markets and communal institutions.

Uncalled for, because the king cannot, and should not, ignore that hunting elephants for pleasure is obscene and profoundly offends millions of people’s sensibilities. It has all the elements of a despicable action. In addition, because he went to a hunting ground especially prepared for enjoyment, he fed all our mental images about the perversity of opulence and power.

Unwarranted, because there was no reason for him, at his age, with his physical condition, to make a hunting trip, and of elephants to boot. No explanation can make such a mountain of imprudent and unnecessary errors comprehensible.

But the key question is: what if he hadn’t fallen during the hunt? Then we still wouldn’t know about this trip because the Royal Family does not give information about the king’s private activities. It’s very debatable that in the 21st century, a trip of this kind can be considered private.

But what’s truly alarming is the discovery that no one tried to stop it. How is it possible that no one saw the physical, aesthetic, and ethical danger of this little adventure? The monarchy does not exist to satisfy the caprices of its members but rather to serve as Chief of State. It must always act in accordance with this high responsibility. Who else knew about this trip? The Prince? Did no one advise the king against this absurdity? What planet are they living on?

The accumulation of errors committed by the monarchy in recent years is proof of an institution that already does not understand its mission in society. It is difficult to serve a community with which you no longer identify, which you know longer comprehend, and to which you no longer pay attention. This insensitivity is the first step of a rupture. It is not that Spanish society is distancing itself from the monarchy; it is the opposite. And when it loses modesty, as it did in the case of this impudent hunt, it can no longer have dignity. Not even rouge can restore that.

US Diplomat: “Spain is Only Good for Flamenco and Wine”

April 16, 2012

US Diplomat: “Spain is Only Good for Flamenco and Wine”
Polemical words from the number two of the OECD, who clarified that he didn’t want to insult anyone
El País: “España solo vale para flamenco y vino”
Miguel González reporting from Madrid April 14, 2012

The American ambassador Richard A. Boucher, Secretary General Adjunct of the OECD (Organisation for Economic Co-operation and Development), which includes 34 countries, surprised the attendees of a seminar about the Arab Spring this past Wednesday, which was hosted in Marseille by the Parliamentary Assembly of NATO, with an unusual declaration: “No one wants to be like Spain today. Spain is only good for flamenco and red wine.”

The attendees were initially stupefied. Afterward, the only Spanish representative at the forum, Diego López Garrido, a Socialist congressman and ex-Secretary of State to the EU, took the floor to demand that Boucher retract such unjust and irresponsible words. Boucher only answered that it was not his intention to insult anyone; he only wanted to say that no country would want to have the unemployment level that is troubling Spain. Given this response, López Garrido sent a letter to the Minister of Foreign Affairs, José Manuel García-Margallo, requesting that the Spain ambassador to the OECD in Paris present a formal complaint about Boucher’s “intolerable words.”

The incident reveals, in any case, the level to which Spain’s international image has deteriorated. Sarkozy is using Spain as a throwing knife against his rival for the Champs Elysses, the Socialist Hollande; Monti attributes the rise of Italy’s risk premium to the Spanish disease. Rajoy’s calls for “prudence” from his European peers do not seem to have made a lick of difference.

Spain to Argentina: There Will Be Consequences for Hostility Toward Repsol

April 14, 2012

Spain to Argentina: There Will Be Consequences for Hostility Toward Repsol
The conflict between the Argentinian government and the Spanish business is far from being resolved
The Argentinian government will decide the future of Repsol’s affiliate today

El País: Soria advierte a Argentina: “La hostilidad [con Repsol] traerá consecuencias”
Carlos E. Cué reporting from Warsaw April 12, 2012

The conflict between the Argentinian government and Repsol-YPF is threatening to become an authentic diplomatic row of the first order. The Spanish government has been discrete until now, although it tried to mediate when the Minister of Industry, José Manuel Soria, traveled to Buenos Aires. Even the King of Spain has tried to stop the conflict. The president of Repsol, Antoni Brufau, has been in Buenos Aires for days looking for a solution. But it all seems useless.

Six Argentinian provinces have now revoked a dozen licenses from Repsol-YPF, sinking the company’s value in the Buenos Aires market. Today, the Spanish government decided to go on the attack. In a recording made by the executive department’s press agency at the doors of the Spanish embassy in Poland, where Spanish journalists could not be present and could not ask questions, Soria said, “The Government of Spain defends the interests of all Spanish businesses, within and without. If there are acts of hostility toward these interests anywhere in the world, the government will interpret them as acts of hostility toward Spain and the Spanish government. What this government is saying is that if there will be consequences for any acts of hostility.”

A diplomatic conflict seems inevitable. Repsol controls 53.47% of YPF, while the Argentinian group Petersen holds 25.46%. The President of Argentina, Cristina Fernández de Kirchner, has encouraged the escalation against Repsol, which she accuses of not making sufficient investments in YPF, causing that company to decrease production and thus forcing Argentina to import petroleum. Repsol has promised to increase its investment, but the row, far from settling down, has worsened, and there is a risk that at the end of this process, Argentina will buy the company for a low price, which would be very damaging for the Spanish oil company.

Spain to Prohibit Cash Payments for Professional Services of Over €2500

April 12, 2012

Mariano Rajoy April 12
President Mariano Rajoy at the Congress of Deputies this morning

Spain to Prohibit Cash Payments for Professional Services of Over €2500
Violators will be fined 25% of the quantity paid illegally; Rajoy announces in Congress that this anti-fraud program will be approved Friday
El País: El Gobierno prohibirá a los profesionales el pago en efectivo de más de 2.500 euros
Cristina Galindo reporting from Madrid April 11, 2012

The anti-fraud plan the government has finalized in order to alleviate the public deficit by raising tax revenues, and which will be accompanied by the first fiscal amnesty in two decades, will include the prohibition of cash transactions of values greater than €2500 for between professional businessmen. Henceforth, such payments will have to be made by card or bank transfer. According to President Mariano Rajoy’s statement in Congress today, violators will face a fine of 25% of the amount paid illegally.

Housing is using this measure to impede the traffic of black money (most of all in the form of €500 bills) inside commercial operations, and in the case of businesses, to obstruct them from resorting to false invoices, a typical kind of fraud that occurs when a business that pays IRPF (income tax) by a system of modules sends a bill for a service that it did not render so that another company can claim a tax exemption from a VAT (Value Added Tax) which it did not actually pay. This anti-fraud measure, which the Council of Ministers will approve Friday, aims to collect €8.171 billion in tax that otherwise would not have been paid in 2012; this would help the country meet its deficit targets set by Brussels (5.3% of GDP this year and 3% in 2013).

The measure announced today is inspired by limitations on cash payments ratified in Italy (€1000) and France (€3000 for professional services and €1500 for salary payments) in 2011 and 2010, respectively. Though fiscal inspectors don’t know the fine print yet, they consider any initiative that complicates the transfer of cash an improvement. “While it is not a panacea in itself, it is a positive measure,” said sources in the National Housing Inspection Organization, which represents 95% of the 1500 inspectors. “We will have to see whether the €2500 cap is too high or not; it’s still early,” the association added.

According to the experts at the Ministry of Housing (Gestha), this maximum should be lowered again to €1000, the maximum in Italy, whose underground economy is comparable in size with Spain’s. In addition, some experts stated in a communique that the measure will just be wet paper in the fight against fraud, because it would still make more economic sense to get caught and pay the fine than it would to follow the law: “Fraud saves one from paying the corporate tax (which is up to 30% of an import) and the VAT (from 4-18%), which means savings that are greater than the 25% which would be the maximum penalty for those caught by Housing.” Sources in the inspectors’ organization stated, however, that once the fraud is discovered, and the fine paid, the corresponding taxes would also be charged while the money is regularized.

“Restricting cash operations is always a good measure in the fight against fraud,” argues Valentín Pitch of the Register of Tax Advisors (REAF). This is the first time that limits on cash payment have been established in Spain. Until now, the fight against black money had concentrated on the controversial €500 bills, which make up 70% of the cash in circulation, and in reinforcing vigilance toward bank income.

The government announced the limitation of cash payments without making the quantities concrete on January 7 when it presented its battle plan against fraud.

Rajoy advanced this measure during parliamentary question time in response to a question by the spokesman of the United Left, Cayo Lara, about fiscal amnesty. Regarding amnesty, the president also qualified that he would not bring about a total amnesty but rather one in which parties which brought money to the surface would pay an 8% penalty – for businesses – or a 10% penalty – for individuals. He defended this measure by saying “it makes sense for our current situation.”

He also insisted that it is an “exceptional measure” which would only be valid in 2012 and which responds to a moment in which Spain needs to reduce the public deficit to 3% of the GDP in 2013, making it “very important” that Spain improve its revenues.

According to what Vice President Soraya Sáenz de Santamaría explained a few months ago, the plan will place special importance on the lists of tax evaders provided by countries that have left the list of fiscal paradises, like Andorra, Panama, and the Dutch Antilles. Nevetheless, the goal for collections stated today is below the current goal: €8.171 billion rather than €9.400, a decrease of 13%.

During another part of the control session, the Minister of Housing, Cristóbal Montoro, announced that the next trimesterly report of state revenues and expenditures would be published “very soon”, and it would show each Autonomous Community’s effect on the state ledger “to increase transparency”.

Guindos in Favor of Abolishing R&D Investment
The Minister of the Economy, Luis de Guindos, has signaled that investment in research and innovation has a “structural deficiency” because it is dependent on state subsidies which, in his opinion, should be eliminated to make way for private investment.

In his response to a question by Basque representative Arantza Tapia on the floor of Congress, Guindos pointed out that from 2009 to 2011, there have been “implicit cuts” in R&D&D, which means the drop in subsidies since 2009 is greater than the 26% it appears to be in the 2012 budget.

Is There a “Catalonian Problem”?

April 7, 2012

The Carlist WarsThe Carlist Wars

Is There a “Catalonian Problem”?
Spain needs to have a more audacious, motivating, and urgent plan for the future than other European countries in order to escape this crisis.
El País: ¿Existe el ‘problema catalán’?
March 18, 2012

Last year was the 90th anniversary of the publication of La España invertebrada (Spineless Spain), one of the books most hated by Ultramontane Spaniards. It’s worth rereading because it’s a fresh and topical nonagenarian (as Virgil said, iam senior, sed cruda deo viridisque senectus (“old now, but a god’s old age is fresh and green”).

In this article, I am going to argue that in order to leave the present crisis behind, Spain needs a more audacious, more motivating, and more urgent project for the future than other European countries. The reason is that its national cohesion is, comparatively, very low, and so to overcome the obstacles of the present, it needs a strong pull into the future. First of all, I will discuss the national experience of Spain with respect to Ortega’s idea of a nation. After that, I will analyze the important differences between Spain as a nation-state and its neighboring countries like France and Portugal. Finally, I will stress the anachronistic character of our national construct in this 21st century and defend my future project, which has to put emphasis on the construction of a society that maximizes the opportunities it offers to individuals.

Ortega defines a nation as a project for the future with a capacity for integration, directed by a people with the authority to rule. It is a very broad concept that includes, for example, the Roman Empire (the Latin nation directed by Rome). Spain had this kind of project, at least until the 17th century; its backbone was a Castile that knew how to rule and ruled that way. The history of a nation is a story of the process of integration, if there is a vigorous project for the future, or disintegration, if the project fails. A nation also can be seen as the equilibrium between centripetal forces which are always moving and the centripetal force that emanates from the integration project. When this last weakens, because the project is exhausted, the centrifugal forces manifest their full potential. In the 17th century, the Spanish project came to a halt because the ruling classes became immobilist and reactionary (in the first article of this series, Spain: Capital, Madrid, I gave a Braudelian explanation of this process based on geography: there are, of course, other explanations, be they complementary or alternative). This is the history of Spain since then: first Flanders left, then Naples, then America, then the Philippines and Cuba, then the African provinces; now Catalonia and the Basque Country are thinking about it as well…It’s striking that there were no accurate diagnoses of what was happening until 1921, and it’s significant that, once Spineless Spain was published, a thick layer of silence fell over it. So now we are talking about the Catalonian problem without finding its common denominators with the Philippine problem, the American problem, and the Flemish problem. The problem is not in the centrifugal forces, which have always moved this way and always will, but rather in the centripetal force, whose integrative attraction was lost centuries ago.

In 1939 (the end of the Civil War), Spain became “a union of destiny in the universal” in which proto-Catalonians of two milennia ago, Indibilis and Mandonius, would incarnate the patriotic essence of an eternal and immutable Spain. That all this was risible from any serious historian’s perspective was no object for this fantastical millennialism that consolidated itself as the paradigm in which a sector of the Spanish population – whose intellectual organ was the Catholic Church – conceived of the past, present, and future. In the spirit of brevity, I will henceforth refer to this group of Spaniards as “Indibilis and Mandonius”. Their concomitance with the social base of Castilian capitalism is very strong. Their strategic alliance with the left through the labor movement – I will call them “the unions” – to make structural reform fail is one of the keys to understanding the politics at the heart of contemporary Spain. The reactionary pincer (henceforth “the pincer”) formed by Indibilis and Mandonius and the unions to defend the status quo is the greatest obstacle that any coherent reform program has to overcome. But I will leave this for later, for the fourth and final article of this series, to concentrate now on another kind of obstacle this program has to confront: the weak cohesion resulting from the peculiarities of the construction of Spain as a nation-state.

In an article published in this newspaper in 2009, Spain and History, I defended the thesis that Spain, as a nation-state, was left in half-boil. The reason is the role that war has on the construction of nations. War, as terrible as it is, has been a very important motivator for innovation, for technology, for fundamental research, and for social and moral change. Perhaps the most striking statement in support of this last notion is this one Sartre made after Hiroshima and Nagasaki: “in opening up for the first time the possibility of collective suicide, the bomb has made us definitively free.” If it weren’t for war – though war is terrible, I repeat – we would still be monkeys. The national idea applied to the military permitted Napoleon to put anchors on the European population, and it mobilized armies of a size that had never been seen before. There were more deaths in each Napoleonic battle than there were in all the battles of the 18th century put together. Other European powers, in order to defend themselves on equal terms, had to resort to the same idea – one which they detested, of course, because it was revolutionary and French. Hence the capacity to mobilize the population became the master key to military strategy in the 19th century. In order to ratchet up the state’s military power, the nation had to be fortified, and for that reason national cohesion had to be increased. Compulsory education, pensions for the elderly, and other measures which we have today were referred to as “social conquests” when they were introduced in Bismarckian Prussia, where they were a key element to long-term military strategy. Other European states had no recourse but to join this military escalation, and that is how the welfare state as we know it today was born.

Modern nation-states were cooked in the fires of the European wars of the 19th and 20th centuries. To put it quick and dirty, France became French by killing Germans, and vice versa. Wars against external enemies are very cohesive, and as a result of these wars, some very cohesive nation-states were born; that is to say, nations with a strong sense of the state and the general interest, capable of undertaking national enterprises with the support of the large majority of the population.

While all this was happening in Europe, in Spain we dedicated ourselves to killing each other in a bloody succession of civil wars: the Carlist Wars of the 19th century and the Civil War of the 20th, which left a million dead. The civil wars were not cohesive; they were divisive. That’s why it isn’t strange that the level of cohesion in Spain is much lower than it is in, say, France or Germany. In Spain, the notion of the general or national interest is weak, and there are hardly even state policies: the legality of abortion is dependent on who governs; foreign and educational policies change from one administration to another; it hasn’t yet been possible to get the consensus needed for the most important structural reforms (for pensions and the labor market); instead, these issues are electoral weapons for the opposition party…Spain has not become a modern nation-state because it lacks the internal cohesion necessary to be one. A comparison with Portugal, a country which has very strong cohesion, despite not having been involved in any of the European wars of the last two centuries, suggests that Spain’s problem comes not only from a lack of ardor for wars abroad but also from the excess of this ardor for wars wthin.

Things being as they are, Spain is confronting a very profound crisis, within which two components can be distinguished. One is cyclical; all the countries in the world are being affected in unequal ways. Spain is one of the European countries that has been most affected because in times of plenty, it didn’t carry out the reforms it already knew were necessary for the labor market and pensions…and for justice, public administration, education, the banking system, energy, and housing…The mirage of the real estate bubble, the pincer’s ferocious resistance, and the incomprehension, if not cowardice, of our governments have brought us to a situation that is not only very bad but also very susceptible to get worse. The leadership of the PSOE stepped down without giving an explicit diagnosis of what was happening. I believe that, in its bewilderment, it never had one. The PP arrived, and it doesn’t seem to know what’s happening to us, either. They do – they say – what Brussels demands. They are reforming the labor market – more for good than for bad – and they are increasing taxes and cutting spending – more for bad than for good – but they do it without giving a credible diagnosis of the crisis besides faulting everything Zapatero did.

Even more important than that, they do not have a plan for the future that clarifies where they are directing us or illuminates the path that we must follow. The confusion of the public, from #nimileurista (Twixters) to the entrepreneurs, is total, and given the forseeable long duration of the crisis, it would be unusual of this disconcertedness did not transform into resistance. Portugal is going into a very difficult adjustment program dictated by and controlled by the European troika and the IMF. Although it also doesn’t know where it’s going, its population has demonstrated an iron discipline because its national cohesion is so great. It’s probable that the program will bring macroeconomic stabilization, which is its purpose. I don’t see Spain accomplishing something like that.

The Transition (of Spain to democracy) was a success because there were explicit ambitions which the public rallied around: democracy, Europe, and the welfare state. Confronting current challenges would require new ambitions, articulated in a program which, for reasons I’ve explained until now, should be more audacious and motivating than what other countries in our region would need. I will dedicate the next, and last, article of this series to that program.

The second level of this crisis, which is deeper than the first, has to do with the very important changes the world has gone through in economics, society, the military, and politics since the fall of the Berlin Wall in 1989.

In economics, there has been rapid globalization which, united to a monetary discipline imposed by the euro, has made it very difficult for Spain to compete on cost in the global economy. We have no option but to bet on something else.

In society, the establishment of the Internet and the web has exponentially increased interactions between people and, as a consequence, has inspired greater acceleration of innovation and progress in all its dimensions: scientific, technological, cultural, and moral.

In opposition to the natural tendency of military affairs, countries have professionalized, reduced, and even privatized their armies, whose bellicose activity no longer depends on the capacity to mobilize the population. This means that social cohesion and the welfare state now have less strategic military importance than they did in the 19th and 20th centuries.

In politics, the Modern Era’s national construction projects have become anachronistic: nation-states will not disappear, but they will lose their abilities, not only due to decentralization but also due to centralization of multinational organizations. This is already occurring in Europe, and it is something that our peninsula’s nationalist movements should take note of.

In this more global context, and with less personal, political, and social certainties, the program Spain needs should put an emphasis on maximizing the opportunities offered to individuals, to fomenting their initiative and creativity, in giving up making decisions for citizens about their lives and giving this responsibility back to them, and in maintaining a social protection network that, without disincentivizing personal effort, guarantees the basic equalities of citizens with respect to education, illness, and aging.

César Molinas, mathematician and economist, is Barcelonese by birth and Madrileño by adoption. He has been an academic, public administrator, and investment banker. He is now devoting himself to “risk capital” in biomedicine and to consulting.


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