Posts Tagged ‘David Mathieson’

A Spanish economics lesson for Scottish independence

26/04/2012, 02:54:10 PM

by David Mathieson

It is ironic that just as the nationalist government in Scotland is churning the ground in preparation for a referendum on independence or ‘devo max’, another European country, Spain, is actively considering at ways of reining in a decentralised state.

The administrative system in Spain is one of the most highly devolved of any country in the EU and the wide range of powers exercised by the powerful regions or autonomias has long provided something of a model for the SNP.

Yet, with their economy under pressure, the costs of ultra-devolution are being increasingly questioned by Spaniards themselves.  Some regions are close to bankruptcy whilst the leaders of others are would like to throw in the towel and revert to a more centralised state.  A new political debate has opened up in which many ordinary Spaniards are openly asking ‘what is the point of further devolution – and is it worth the price?’

The 17 Spanish autonomias are generally responsible for the organisation and delivery of key public services such as health, education and justice and these alone account for some 80% of average regional spending.

The funding comes from a mixture of central and regional government revenues although not all regions enjoy the same spending powers nor do they raise revenue in the same way.  The founding fathers of the post-Franco constitution decreed that whilst the pace of devolution would be determined by local needs the eventual goal should be a uniform provision of services or what the Spanish have dubbed café para todos or ‘coffee for everyone’.

A noble aim maybe, but in the meantime the mishmash of services can be confusing – even the most enthusiastic advocates of the system admit that there are failures of coordination – and it is costly.


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Angry with RBS? Take a look at the Spanish bank bonuses that British customers are helping fund

06/02/2012, 07:00:49 AM

by David Mathieson

Poor Stephen Hester.  Poor ex-Sir Fred.  Not of course in financial terms, but perhaps unfortunate to find themselves the individual objects of public indignation while others escape without the slightest scrutiny.

Chukka Umunna made the points again eloquently on the Today programme last week: there would be no RBS to pay Hester or Goodwin anything had we, the tax payers, not come to the rescue of the stricken bank and saved it from complete collapse in 2008.

When millions of public sector workers are having their wages, salaries and in some case jobs cut, the payment of bonuses at RBS – always discretionary and never contractual – should not even be on the table.

But does the story stop there?  Hardly.

RBS is different only in that it is more than 80% owned by the state. For all the other retail banks, the bonuses being paid are funded from the charges paid by millions of ordinary account holders.


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Step change in Spain

22/11/2011, 04:06:37 PM

by David Mathieson

Labour Uncut? Maybe, but our sister party in Spain, the PSOE has just been sliced, diced and stuck through the democratic mincer. The general election on Sunday put an end to the centre left government in Madrid. It gave the conservative Popular party an overall majority, a rare event in a country used to being governed by coalitions of one sort or another.

These results come on top of some disastrous regional election results for the PSOE earlier this year when voters handed the PP power in almost all of Spain’s powerful autonomous regions. 2011 is without doubt the PSOE’s annus horribilis and will rank amongst the troughs for a party which has had more than its share of bleak moments since it was founded well over a century ago.

For Spaniards and the Euro zone the key question is what happens next? But first a quick post mortem. The numbers were always against a PSOE victory. A rocketing deficit, near doubling of the national debt since the onset of the current crisis, five million unemployed, and eight years in power left the socialist government of Jose Luis Rodriguez Zapatero without much in the way of a narrative or alibi. And Zapatero played a poor hand poorly. Until early 2010 he appeared to be in a state of denial about the extent of the problems, insisting that the Spanish economy was fundamentally sound and “playing in the Champeon’s League”. (more…)

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Bringing the Rhine to the Tyne: why Ed Miliband is right to reinvigorate social democracy

04/10/2011, 09:04:25 AM

by David Mathieson

Moving to the left, deserting the middle class and betraying wealth creators. The Tory attack lines from Manchester this week are all too predictable and have been well rehearsed by their comentariat over the past few days: the “Red Ed” strapline is back in vogue as they pick up on elements of Miliband’s speech proposing a new social and economic bargain.

So what is it that so upsets the British right about what Miliband said? An economy which accommodates values other than just those of the market? A recognition that firms have obligations beyond shareholder value? One of the few solid proposals in Miliband’s speech, a worker representative on pay boards, would hardly raise an eyebrow elsewhere in those parts of continental Europe where a more inclusive Rhineland model of capitalism holds sway.  Miliband explicitly did not reject market capitalism but merely argued that our existing economic model needs to be redrawn: what the Labour leader is effectively seeking to do is bring some of the Rhine to the Tyne.

Why Miliband’s arguments for a new economic bargain should set the Tories ablaze is baffling for two reasons. First, because the Rhineland model is a creation of the right rather than the left. Post-war German politics, for example, have been dominated by the Christian democrats of the CDU, not the social democrats of the SPD (political disagreement in the country seldom touches the economic model which is supported – in every sense – by both major parties). Switzerland may have some red in the national flag but that is about as far as it goes – Zurich and Lucerne are not bastions of the left. The Benelux countries are notable their for caution, coalitions and consensus.

The second reason for Conservative fury is equally bewildering. Most British families understand that our economic model is broken and they are looking to their politicians to fix it. Labour may trail the Tories on the issue of the economy in the polls, but Osborne’s ratings are dismal. Voters will reward those who come up with a solution which chimes with their own values.


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