Spain is sliding into a full-blown economic depression

[Atilla]

Don't worry about the state of Spain, Atilla will be along shortly to talk the job up
:clap:

Cheers CV

No doubt you have seen the green shoots by now... I'm sure some of you are still in denial :cheesy: but I'm sure you'll get over it...


I love Spain - Zamora has special place in my heart as does Salamanca university.

I beg to differ with some of the views expressed on this blog. Mi more of a Castillian...

I don't like separatists and never have done. Two regions Northern regions are full of stuck up gits not to mention terrorists. There is only one Spain.

Planning laws do need to be addressed in Spain I accept that. Some officials and orifices are a law unto them selves.

My good friend Chump who is an expert in property was writing about Spain almost one and a half years ago predicting this current scenario so it is no surprise to me as I agreed with his point of view upon reflection back then.

So some of your gloating is wasted

Great weekend everyone...

 

[searchlight]

. Two regions Northern regions are full of stuck up gits not to mention terrorists. There is only one Spain.

Lets hope this is a minority view within the '' There is only one spain'' movement. Otherwise they have no chance of succeeding .

searchlight

 

[Splitlink]

Lets hope this is a minority view within the '' There is only one spain'' movement. Otherwise they have no chance of succeeding .

searchlight

Very few, if any, in Catalunya want to go the way of ETA, but live here as long as me and you will see the resentment that there is. Mainly, our money goes to Madrid and is handed back to us to spend. That is, slowly, improving and we are getting more control over our own money. One other, very obvious, case is the fact that the programmes on their tv channels, where it is possible with foreign films, including documentaries, are televised in Catalan and the original version. A Spaniard not knowing Catalan or English, has to resort to other channels. That I find useful for me and other Englishmen but incredible in a region that is considered a part of Spain.

However, not many people want Catalunya outside Spain, just a level playing field, like the Scots, Irish and Welsh do.

 

[catracho]

Spanish banks strongest?

I remember reading somewhere at the beginning of all this mess that Spanish banks were the strongest in Europe. Just look at what Santander group snatched up out of the bargain basement this year with their fat wallets. Something to do with regulations as Split says. Can't see how they won't take a big hit though. It's all international innit.

Spain: The Hole In Europe's Balance Sheet


Dives sum, si non reddo eis quibus debeo.
I am a rich man as long as I don't pay my creditors.

Titus Maccius Plautus (c. 254-184 BCE), "Curculio"

Themes
Spain = Japan 2.0? - We argue that 1) the real estate crash in Spain is worse than is widely believed, 2) Spanish banks are hiding their losses, and 3) investors are smoking crack if they believe that Spanish banks are among the strongest in Europe, (see Forbes latest Spanish Banks In Top Form). If all these are true, Spain will soon have zombie banks like Japan.

Banks are hiding losses - We believe that Spanish banks are not marking their real estate loans to market and are extending credit to zombie construction companies. They do this by 1) Getting a boost from accounting changes, 2) Not marking loans to market, 3) Continued lending to zombie companies, 4) Extending 40 year and 100% loan-to-value loans, and other bubble-like lending practices. We look at each of these in turn.

Spain is in deflation - In a deflationary environment, servicing debt becomes even harder. Even when rates go to zero the real burden of debt goes up. That is why deflation is such a terrible thing. Eastern Europe, Spain and Ireland are now all experiencing the beginning of deflation. We believe that we will see much more deflation to come, which will have broad ramifications across the European banking sector.

Who's holding the bag? - The periphery countries are net debtors, and the rest of Europe is the net creditor. When a debtor can't pay, the creditor suffers. Germany, France and others will need to cope with recapitalizing the periphery and Spain.
Strategies
We recommend shorting or being underweight Spanish government bonds vs German bonds and short equities, particularly banks, builders and anything related to the consumer.

Spain = Japan 2.0?
We hate to bang on about Spain like an old Salvation Army drum, but we believe that Spain is a disaster waiting to happen. Misunderstanding the severity of the crisis will prove costly to investors as it will have profound implications to the European banking system.

Spain is set for a long, painful deflation that will manifest itself via a very high unemployment level for an industrialized economy, a real estate collapse and general banking insolvencies.

Spain had the mother of all housing bubbles. To put things in perspective, Spain now has as many unsold homes as the US, even though the US is about six times bigger. Spain is roughly 10% of the EU GDP, yet it accounted for 30% of all new homes built since 2000 in the EU. Most of the new homes were financed with capital from abroad, so Spain's housing crisis is closely tied in with a financing crisis.

The impact on the banking sector will be severe. Consider this: the value of outstanding loans to Spanish developers has gone from just €33.5 billion in 2000 to €318 billion in 2008, a rise of 850% in 8 years. If you add in construction sector debts, the overall value of outstanding loans to developers and construction companies rises to €470 billion. That's almost 50% of Spanish GDP. Most of these loans will go bad.

Spanish banks, in our view, are now facing a very bleak outlook. Spain's unemployment rate reached over 17%; there are now four million unemployed Spaniards and over one million families with not a single person employed in the family.

We argue and will document anecdotally in this report that:

The real estate crash in Spain is worse than is widely believed, much as the subprime problem was much worse than people believed

Spanish banks are hiding their losses and rolling over debt to zombie companies, much as Japan did in the last decade

Investors are deluding themselves if they believe that Spanish banks are among the strongest in the world. (This is a new theme. See Forbes's latest "Spanish Banks In Top Form" for an example of the new fawning articles on Spanish banks.)
If we are right, Spain will soon have zombie banks like Japan and it will face a prolonged period of deflation. However, Spain will be much worse. As Edward Hugh, the doyen of clear-headed analysts of Spain, points out, "Japan in 1992 could leverage its own savings, it had a current account surplus of 3% of GDP. Spain has massive external debt - in 2007 the current account deficit was 10% of GDP - and little in the way of major export industries."


Today's offering for this week's Outside the Box starts off with a quote from Titus Maccius Plautus: "I am a rich man as long as I don't pay my creditors." Even 2200 years ago, it seems that problems of credit were an issue.

I talked last Friday about the US being faced with a number of bad choices. But it is not just the US. Today we look at a piece from my friends at Variant Perception based on London. They are a relatively new institutional research house. I have been reading their material for some time and have begun to look very much forward to it. They do some very good in-depth analysis. I asked then to shorten a piece they did on Spain and Spanish banks for this week's Outside the Box. Spain will soon be faced with a number of very uncomfortable choices, but for now they appear in denial.

For those interested, I also provide a link to another report they did on the United Kingdom, tax collections (way down!) and the link to UK gilts (or bonds). It seems they also have a problem with issuing too much debt. http://www.variantperception.com/si...ads/Taxing_Problems_and_a_Gilt-y_Solution.pdf

from John Mauldin..Outside the Box..
I have highlighted problems in Japan and with the European banking system. The problem from the credit crisis are world wide. To think they are not interconnected would be naiveté in the extreme. What happens in Japan and Spain and the US will affect your part of the world, some more than others. Today, let's look at Spain, which has as many unsold hoes but at one-sixth of the population, and these homes are on the books of banks at full price. I will let you read about the rest of the future train wreck that is Spain from Variant Reception (A distinctive and original voice in economic analysis | Variant Perception which has some other interesting sample commentary as well).

can forward full article if anybody wishes..pm me

 

[Splitlink]

Spain: The Hole In Europe's Balance Sheet


Dives sum, si non reddo eis quibus debeo.
I am a rich man as long as I don't pay my creditors.

Titus Maccius Plautus (c. 254-184 BCE), "Curculio"

Themes
Spain = Japan 2.0? - We argue that 1) the real estate crash in Spain is worse than is widely believed, 2) Spanish banks are hiding their losses, and 3) investors are smoking crack if they believe that Spanish banks are among the strongest in Europe, (see Forbes latest Spanish Banks In Top Form). If all these are true, Spain will soon have zombie banks like Japan.

Banks are hiding losses - We believe that Spanish banks are not marking their real estate loans to market and are extending credit to zombie construction companies. They do this by 1) Getting a boost from accounting changes, 2) Not marking loans to market, 3) Continued lending to zombie companies, 4) Extending 40 year and 100% loan-to-value loans, and other bubble-like lending practices. We look at each of these in turn.

Spain is in deflation - In a deflationary environment, servicing debt becomes even harder. Even when rates go to zero the real burden of debt goes up. That is why deflation is such a terrible thing. Eastern Europe, Spain and Ireland are now all experiencing the beginning of deflation. We believe that we will see much more deflation to come, which will have broad ramifications across the European banking sector.

Who's holding the bag? - The periphery countries are net debtors, and the rest of Europe is the net creditor. When a debtor can't pay, the creditor suffers. Germany, France and others will need to cope with recapitalizing the periphery and Spain.
Strategies
We recommend shorting or being underweight Spanish government bonds vs German bonds and short equities, particularly banks, builders and anything related to the consumer.

Spain = Japan 2.0?
We hate to bang on about Spain like an old Salvation Army drum, but we believe that Spain is a disaster waiting to happen. Misunderstanding the severity of the crisis will prove costly to investors as it will have profound implications to the European banking system.

Spain is set for a long, painful deflation that will manifest itself via a very high unemployment level for an industrialized economy, a real estate collapse and general banking insolvencies.

Spain had the mother of all housing bubbles. To put things in perspective, Spain now has as many unsold homes as the US, even though the US is about six times bigger. Spain is roughly 10% of the EU GDP, yet it accounted for 30% of all new homes built since 2000 in the EU. Most of the new homes were financed with capital from abroad, so Spain's housing crisis is closely tied in with a financing crisis.

The impact on the banking sector will be severe. Consider this: the value of outstanding loans to Spanish developers has gone from just €33.5 billion in 2000 to €318 billion in 2008, a rise of 850% in 8 years. If you add in construction sector debts, the overall value of outstanding loans to developers and construction companies rises to €470 billion. That's almost 50% of Spanish GDP. Most of these loans will go bad.

Spanish banks, in our view, are now facing a very bleak outlook. Spain's unemployment rate reached over 17%; there are now four million unemployed Spaniards and over one million families with not a single person employed in the family.

We argue and will document anecdotally in this report that:

The real estate crash in Spain is worse than is widely believed, much as the subprime problem was much worse than people believed

Spanish banks are hiding their losses and rolling over debt to zombie companies, much as Japan did in the last decade

Investors are deluding themselves if they believe that Spanish banks are among the strongest in the world. (This is a new theme. See Forbes's latest "Spanish Banks In Top Form" for an example of the new fawning articles on Spanish banks.)
If we are right, Spain will soon have zombie banks like Japan and it will face a prolonged period of deflation. However, Spain will be much worse. As Edward Hugh, the doyen of clear-headed analysts of Spain, points out, "Japan in 1992 could leverage its own savings, it had a current account surplus of 3% of GDP. Spain has massive external debt - in 2007 the current account deficit was 10% of GDP - and little in the way of major export industries."


Today's offering for this week's Outside the Box starts off with a quote from Titus Maccius Plautus: "I am a rich man as long as I don't pay my creditors." Even 2200 years ago, it seems that problems of credit were an issue.

I talked last Friday about the US being faced with a number of bad choices. But it is not just the US. Today we look at a piece from my friends at Variant Perception based on London. They are a relatively new institutional research house. I have been reading their material for some time and have begun to look very much forward to it. They do some very good in-depth analysis. I asked then to shorten a piece they did on Spain and Spanish banks for this week's Outside the Box. Spain will soon be faced with a number of very uncomfortable choices, but for now they appear in denial.

For those interested, I also provide a link to another report they did on the United Kingdom, tax collections (way down!) and the link to UK gilts (or bonds). It seems they also have a problem with issuing too much debt. http://www.variantperception.com/si...ads/Taxing_Problems_and_a_Gilt-y_Solution.pdf

from John Mauldin..Outside the Box..
I have highlighted problems in Japan and with the European banking system. The problem from the credit crisis are world wide. To think they are not interconnected would be naiveté in the extreme. What happens in Japan and Spain and the US will affect your part of the world, some more than others. Today, let's look at Spain, which has as many unsold hoes but at one-sixth of the population, and these homes are on the books of banks at full price. I will let you read about the rest of the future train wreck that is Spain from Variant Reception (A distinctive and original voice in economic analysis | Variant Perception which has some other interesting sample commentary as well).

can forward full article if anybody wishes..pm me

.


If everything you say is true, I would not be surprised! As you say, the real estate sector is a disaster and, let's face it, apart from tourism, the other industries are at the mercy-as in the UK-- of foreign multinationals. With Jaguar, MG and Rover in the news at home, we know all about the security of that!

Spain is in serious trouble. I'm sure that the banks have something nasty that we don't know about, yet. Watch this thread!

 

[timsk]

.
Spain is in serious trouble. I'm sure that the banks have something nasty that we don't know about, yet. Watch this thread!

Let's hope that Santander isn't one of them. If they go down, presumably they'll take Abbey and Alliance & Leicester with them!

 

[Splitlink]

Personally, I don't think that they will. They did lose money with Madoff but every country has horror stories. The problem is, as I see it, is that the Spanish banks are being painted as the bad guys when Lehman Bros, ML, RBS, HSB (or whatever) even the Dutch ING have all needed help. What would be so exceptional if a Spanish bank got in trouble? Some of the smaller Cajas (building societies) have been taken over by larger ones , which had to happen, anyway.

 

[cuotes]

There is no doubt that Spain is going to have serious problems.
List of mistakes is huge.

2010 looks bad, very bad.
Spain = Japan 2.0? Probably.

Government is incompetent and no better options are available.
People just want to be government employee (you can make a living without working).
Young kids grow up without any goal beyond having fun.
Education and formation levels are lower and lower.
Financial culture is NULL.
We go from bad to worse.
There are plenty of reasons to feel ashamed.
(as well as many reasons to be proud, of course)







But at least, my dear N Rothschild, we are not British :|


Sorry for the rest of uk boys

 

[Splitlink]

There is no doubt that Spain is going to have serious problems.
List of mistakes is huge.

2010 looks bad, very bad.
Spain = Japan 2.0? Probably.

Government is incompetent and no better options are available.
People just want to be government employee (you can make a living without working).
Young kids grow up without any goal beyond having fun.
Education and formation levels are lower and lower.
Financial culture is NULL.
We go from bad to worse.
There are plenty of reasons to feel ashamed.
(as well as many reasons to be proud, of course)







But at least, my dear N Rothschild, we are not British :|


Sorry for the rest of uk boys

I'm British but I love this country, too, where I've lived for 43 years. I'm not about to knock the Spanish, especially the Catalans, who are the salt of the earth and have put up with me, bravely, all this time. I am clear about this. If the Catalans wanted anything, be it independence or anything else, and it depended on my vote, they would get it. That is the least that I could do for them.

Spain has done wonders since Franco and they are now having to compete with new members who have joined, who were in the Russian block. Our noses are a little out of joint, perhaps, because we came along so fast and, like all babies, there comes the time when it is no longer the favourite. Now we have to pay for our previous excesses because, as with everyone else, everything has to be paid for, sooner or later.

Yes we have all the defects that you mentioned. We have Joined the club.

 

[Black Swan]

Spain: The Hole In Europe's Balance Sheet


Dives sum, si non reddo eis quibus debeo.
I am a rich man as long as I don't pay my creditors.

Titus Maccius Plautus (c. 254-184 BCE), "Curculio"

Great quote. Also good to see someone else subscribes to the Maudlin newsletter. IMHO Santander's politics in acquiring the damaged UK banks were spot on. It's a very long play but clever...

 

[cuotes]

Did you know that Santander get ride of those real state actives just before the beginning of the crisis? Clever.

BBVA (the second bank over here) is doing that now. Many months afterwards.

It seems that we have smart, capable and brilliant businessmen, doctors, architects, engineers.... but it seems that most of them want to (or, have to) go to other place to live/work.

Spain is going to the wall
I keep thinking that 2010 looks bad.
Depressive

 

[0007]

Let's hope that Santander isn't one of them. If they go down, presumably they'll take Alliance & Leicester / B&B / Abbey with them.

..... and can you imagine the fun when the British & the Spanish both say it's each other's responsibility to fund any shortcomings under the deposit guarantee schemes ? (Almost forgot - no problem!, it's all EEC isn't it )

Got out of A&L when they first started to look dodgy.

 

[counter_violent]

Cheers CV

No doubt you have seen the green shoots by now... I'm sure some of you are still in denial :cheesy: but I'm sure you'll get over it...

Nonsense


I love Spain - Zamora has special place in my heart as does Salamanca university.

I beg to differ with some of the views expressed on this blog. Mi more of a Castillian...

I don't like separatists and never have done. Two regions Northern regions are full of stuck up gits not to mention terrorists. There is only one Spain.

Planning laws do need to be addressed in Spain I accept that. Some officials and orifices are a law unto them selves.

My good friend Chump who is an expert in property was writing about Spain almost one and a half years ago predicting this current scenario so it is no surprise to me as I agreed with his point of view upon reflection back then.

So some of your gloating is wasted

Great weekend everyone...

I also know that my rantings about spiraling unemployment were also dismissed way back then ...funny when we look where we are today....and it's only going to get worse...much worse in fact...high end jobs in particular have been decimated all those tax revenues are no longer available to pay for all this complete nonsense. We haven't even started yet on the public sector and the knock on effects from that!

So we also have whole countries like Spain Iceland Ireland Eastern Europe...the list is just endless and all of them are in or entering this deflationary depression spiral which in turn will be a drag on all other countries who are trying to reinflate...so at best the whole economic situation will be flat and for a very long time ( thats best case btw ) the reality could easily be far worse.
Competition for work will drive wages down not up ( people have to scrape what they can get to survive) all deflationary pressures.

I could also argue that prices of goods services wages are being kept atificially high in the developed world...look at some of the things that have fallen.

Nat Gas 1/5th the price at its peak...has the consumer seen bills reduced significantly ?
Oil collapsed from $1.47 to $30...since doubled ..but we will see $30 again before we see $100 anytime soon.
Property prices...spending power diminished due to devaluation effects..lets not even go there.

The easiest position to adopt in all this is one of hope because thats what the herd wants naturally.
The hard position to adopt is the one based in reality because nobody wants to hear it or think it....the problem is...even the herd has got that little voice going on inside their heads...what if those doom mongers are right !

 

[Atilla]

I also know that my rantings about spiraling unemployment were also dismissed way back then ...funny when we look where we are today....and it's only going to get worse...much worse in fact...high end jobs in particular have been decimated all those tax revenues are no longer available to pay for all this complete nonsense. We haven't even started yet on the public sector and the knock on effects from that!

So we also have whole countries like Spain Iceland Ireland Eastern Europe...the list is just endless and all of them are in or entering this deflationary depression spiral which in turn will be a drag on all other countries who are trying to reinflate...so at best the whole economic situation will be flat and for a very long time ( thats best case btw ) the reality could easily be far worse.
Competition for work will drive wages down not up ( people have to scrape what they can get to survive) all deflationary pressures.

I could also argue that prices of goods services wages are being kept atificially high in the developed world...look at some of the things that have fallen.

Nat Gas 1/5th the price at its peak...has the consumer seen bills reduced significantly ?
Oil collapsed from $1.47 to $30...since doubled ..but we will see $30 again before we see $100 anytime soon.
Property prices...spending power diminished due to devaluation effects..lets not even go there.

The easiest position to adopt in all this is one of hope because thats what the herd wants naturally.
The hard position to adopt is the one based in reality because nobody wants to hear it or think it....the problem is...even the herd has got that little voice going on inside their heads...what if those doom mongers are right !

I think this debate - inflation v deflation is still ongoing.

Fuel bills and price of oil is unlikely to fall. Consider Zimbabwe - although the country is poor they have hyperinflation. Thus if you print money - irrespective of whether you have strong economy or weak economy with mass unemployment prices will rise.

Consider Spain with building industry flat or in negative territory and high unemployment - but as oil and commodity prices (including agricultural products) rise so will inflation. Because not all prices are set locally.

Consider UK - near 3m unemployed and prices consistently above expectations and only recently fell due to a manufactured drop in fuel prices (imo).

We have in Spain excess supply of property. In UK excess demand for property. + global inflationary pressures due to global stimulus. Not comparing like for like. Apples and pears.

By being in the market for property in UK it was easy to observe rise in prices in property. I was and still am expecting falls for the 4th Qtr for UK followed by rises for Qtr2 onwards in 2010.

I suspect a W type recession will be played out and don't believe in the V recovery. Ultimate 'test' will be whether we make a higher high or lower low for the second leg of the W.


Split - bit disappointed with your approach to Catalonia demands for independence or autonomy what ever they are bragging about and the same goes for the Basques.

As a Londoner with the City based here - some could similarly argue we generate the wealth and provide mass income and high taxes which benefits the whole of UK. Perhaps we should start a campaign to break away from the rest of UK such that we as Londoners manage our own finances and taxes.

Taking this thought to extreme some parts of the UK where its not viable - why bother having post-offices, schools or public transport at all. No doubt it is subsidised by other areas with mass populations.

My view is this kind of thinking which also exists in Northern Italy or is pure self indulgence of man driven by the greed of man for more power and influence.

 

[montmorencyt2w]

Any one else wondering why (so far) there haven't been any blowups from the Spanish Banks. Surely they're up to their eyeballs in domestic debt that hasn't got a chance of being repaid any time soon, i.e. personal mortgages, business loans, personal credit cards, personal loans etc. Hard to make those payments when you don't have a job.

Watch out Abbey customers!

[Edit - ok I see Tim beat me too it. I forgot about the Alliance and Leicester. (Or should that be "Sprocket and Sylvester"? ]

 

[Splitlink]

I think this debate - inflation v deflation is still ongoing.

Fuel bills and price of oil is unlikely to fall. Consider Zimbabwe - although the country is poor they have hyperinflation. Thus if you print money - irrespective of whether you have strong economy or weak economy with mass unemployment prices will rise.

Consider Spain with building industry flat or in negative territory and high unemployment - but as oil and commodity prices (including agricultural products) rise so will inflation. Because not all prices are set locally.

Consider UK - near 3m unemployed and prices consistently above expectations and only recently fell due to a manufactured drop in fuel prices (imo).

We have in Spain excess supply of property. In UK excess demand for property. + global inflationary pressures due to global stimulus. Not comparing like for like. Apples and pears.

By being in the market for property in UK it was easy to observe rise in prices in property. I was and still am expecting falls for the 4th Qtr for UK followed by rises for Qtr2 onwards in 2010.

I suspect a W type recession will be played out and don't believe in the V recovery. Ultimate 'test' will be whether we make a higher high or lower low for the second leg of the W.


Split - bit disappointed with your approach to Catalonia demands for independence or autonomy what ever they are bragging about and the same goes for the Basques.

As a Londoner with the City based here - some could similarly argue we generate the wealth and provide mass income and high taxes which benefits the whole of UK. Perhaps we should start a campaign to break away from the rest of UK such that we as Londoners manage our own finances and taxes.

Taking this thought to extreme some parts of the UK where its not viable - why bother having post-offices, schools or public transport at all. No doubt it is subsidised by other areas with mass populations.

My view is this kind of thinking which also exists in Northern Italy or is pure self indulgence of man driven by the greed of man for more power and influence.

Atilla,

There is a great difference between London and Barcelona and you should know it. London is the hub for the UK and one of the financial centres of the world. Catalunya is one of the two hives of Spanish industry, not just financial. Go to Mont Juich and look down on the port activity.

The main fact is that Catalunya has been screwed since it became part of Spain and they don't like it. Now, they, like the Scots and Irish, are doing something about it.There is nothing unusual about any of this. It happens in every country, big and small, the world over.

I am not a Brit infected with Catalanism but it fills me with pleasure when Zapatero has to come running to the Catalan parties when he can't get enough votes. At last, democracy has come to this country.

I would like to see a fair proportion (I don't know, off hand, how many) parliamentary seats in Madrid filled with Catalan backsides. That is the problem with the system. The seats are won, but the party leader fills them as he wishes.

The UK system has a lot of defects but the way that each constituency knows its candidate is good. This expense scandal has shown up a lot of bad things and there is a mood for changing things for the better. My advice to the Brits, though, as be careful not to throw the baby out with the bath water.

 

[Splitlink]

Latest move, VAT going up from 17% to 18%

 

[Trader333]

My advice to the Brits, though, as be careful not to throw the baby out with the bath water.

Please explain what you mean by this ?


Paul

 

[Atilla]

Atilla,

There is a great difference between London and Barcelona and you should know it. London is the hub for the UK and one of the financial centres of the world. Catalunya is one of the two hives of Spanish industry, not just financial. Go to Mont Juich and look down on the port activity.

The main fact is that Catalunya has been screwed since it became part of Spain and they don't like it. Now, they, like the Scots and Irish, are doing something about it.There is nothing unusual about any of this. It happens in every country, big and small, the world over.

I am not a Brit infected with Catalanism but it fills me with pleasure when Zapatero has to come running to the Catalan parties when he can't get enough votes. At last, democracy has come to this country.

I would like to see a fair proportion (I don't know, off hand, how many) parliamentary seats in Madrid filled with Catalan backsides. That is the problem with the system. The seats are won, but the party leader fills them as he wishes.

The UK system has a lot of defects but the way that each constituency knows its candidate is good. This expense scandal has shown up a lot of bad things and there is a mood for changing things for the better. My advice to the Brits, though, as be careful not to throw the baby out with the bath water.

Well we are now on thin ice...

How about we South England where wealth and all good things are generated separate from North England. We'll draw new borders around Wales but including Birmingham and ditch the rest. Let Northern England handle their own affairs.

I know this happens to big and small countries but it goes against all good common reason imo.

At an analytical level this has always been the case. European union member countries on the fringes have all similar problems. Closer you are to the centre of anything the better off one is. So places out on the peripheries are less developed, poorer and unable to compete

 

[Splitlink]

Please explain what you mean by this ?


Paul

I don't believe that the system ,in the UK, of standing for a constituency and, then, being known as being "their" man in Parliament, should be changed.

The European example is a case in point. Neil Kinnock, Mendelsson, the Hong Kong governor, were never elected by the public. They were given the job. We have our share of no hopers but, in other European countries' cases, the example is followed into national government. The PM or party puts the people in the won seats.

In the US, the president picks his men and they are not, necessarily, politicians (although Hilary is) but they have to be accepted by the Senate before getting the job.

That, IMO, is an even better idea.

Well, what reforms? They do say that 650 MPs are far too many. Certainly, most countries have far less. It has been said that they do not have enough to do, especially as most of the work, these days, is done in Brussels. My observation on that is that it seems to me that we, the voters, are not in charge of who goes there,. God help us! Because Spain has sent all their failures there. If Tony Blair was elected to go there who, of us, would say "Yea or Nay" ?

The answer to that is that we'd read about it in the morning papers.

This is what I mean by throwing the baby out with the bath water. The UK needs reforms but change things that need changing. Nothing else.