The Spanish Challenge: 13/03/2012

Hello loyal reader,

If I had to tell you the story of Spain over the last few hours, this is what I would say…


**The collapse of Spain: the Spanish justice system**

“*In 2008, I wrote a post titled “Spain: justice system collapsing under paperwork” about something that I thought was extremely worrying in terms of the path Spanish society had taken.*

*Last week, I again wrote that Spanish society is at risk of collapse if we take a systemic, theoretical point of view.*

*Today, Libre Mercado has published two graphs which show just how much the Spanish Justice system is clogged up ([…continue reading and publish your opinion here][dailycomment])*”


1. **DROUGHT IN SPAIN: “URGENT, DRAMATIC”** According to Spain’s regional environment ministers, who met the national minister yesterday. They say the situation is even more dramatic than it was even a fortnight ago and that is it getting worse every day. The environment minister, in the middle of the debate about government cuts, doesn’t want to make a decision about emergency drought orders just yet, because they would cost him loads of money he doesn’t really have. ([ABC][abc])

2. **DE GUINDOS ACCEPTS EUROPE’S 5.3% DEFICIT TARGET**. In the end, Spain’s deficit target for 2012 won’t be 4.4%—as Europe has originally thought, nor Rajoy’s unilateral 5.8% target. Brussels now wants 5.3%, which would require additional cuts to the tune of €5 BILLION. The Spanish government has accepted the new target. Get ready, loyal reader, there are going to be some severe government cuts coming in April.([Expansión][expansion])

3. **SPANISH EXPORTS RISE & FALL AT THE SAME TIME**. Yes it does appear to be possible, depending on your point of view. Technically, Spanish companies’ exports rose by 15.4% in 2011, a new record. At the same time, however, Spain’s share of total world exports, compared to other countries, fell by 3%. Spain now exports just 1.64% of everything exported from somewhere in the world, just as it did in 1993. ([5 Días][5dias])

4. **SPANISH JUSTICE SLOWS DOWN**. I have been watching this phenomenon for years, after some lawyer and judge friends alerted me to it back in 2007. Now we have graphs. More than 3.5 millions backlogged cases are waiting to be heard somewhere inside the Spanish justice system. You might have seen in the papers that cases sometimes take 10 years to be tried and sentenced, and now we find out that: “minor cases, which should not take more than 100 days to process, according to current regulations, take on average 436 to process.” Best not to get muddled up in that mess, then, if you can avoid it. ([Libre Mercado][libremercado])

5. **SPANISH ENERGY 3rd MOST EXPENSIVE IN EUROPE**. The Spanish National Energy Commission says this is definitely not good for the competitiveness of Spanish industry, given the impact it has on costs. Only Malta and Cyprus are more expensive. And they haven’t included the energy sector’s structural deficit in the calculation. If the had, Spain would DEFINITELY have the most expensive energy in Europe. The blame can be attached to green energy subsidies awarded since 2007. ([5 Días][5dias2])

6. **PAROLE FOR ETA MURDERERS**. If they have renounced the terrorist group publicly, if they have begged forgiveness of their victims and if they have served at least three-quarters of their sentence. The Spanish Interior Ministry thinks this is a good deal. ([El Mundo][elmundo])

7. **IBERIA PILOTS WON’T STRIKE AT EASTER**. The pilots were going to protest against he creation of Iberia Express, a new low-cost subsidiary of Iberia. The government has had a chat with everyone and there won’t now be 24 days of strikes, which is what the pilots had planned. What we don’t yet know is what has been promised in return.([El Mundo][elmundo2])

8. **SPAINISH REAL-ESTATE BACK ON INVESTOR’S RADAR**. Tentatively, according to a brief article on CNBC about a real-estate investment conference in Cannes. Germany and Ireland, among other countries, are still more attractive destinations for international investors but Spain might at least be back on their investing radars. The article talks of new commercial leasing laws as one of the new incentives.([CNBC][cnbc])

9. **IMMIGRATION: LOTS OF CHECKING, NOT MUCH UNDERSTANDING**. A court case in Madrid highlights a certain level of confusion over illegal immigration and police responses, and who should be controlling who. The trial is to try and control a group of activists who were checking on police in different areas of Madrid because the police were illegally checking up on some immigrants just because they looked a bit foreign. ([El País][elpais])

10. **GOVERNMENT CUTS EMPTY SPAIN’S MUSEUMS**. If you understand the relationship between education, culture, reflection and prosperity in a society, you will not like this story at all: “*Death by asphyxiation threatens Spain’s museums. That might sound like an alarming diagnosis of the situation, but it is far from an exaggeration. Deeply dependent on public finance, …*”. ([El País][elpais2])

Thank you for reading.

Regards from Murcia,