Cosas de España/Galiza
Spain’s most significant contributions to global gastronomy, the ‘tapa’ comes in all shapes and sizes, from the humble olive or a few potato chips all the way through to miniature banquets. The ‘pincho’, the tapa’s larger and more elaborate cousin, is to be found in the Basque Country, most notably in San Sebastián. The price of tapa or pincho varies: some are offered free with a caña of beer or a glass of wine, and others are charged separately. See here for James_10’s view of the 10 best cities in which to enjoy free tapas. I’m pleased to say I’ve ‘done’ nearly all of them.
Talking of eating in Spain . . . Why do the Spanish eat so absurdly late?See here for the curious reason why they do so.
As I know full well . . . Galicia is so far west it really should be in the next timezone, GMT-1.
Here’s the estimable Mac75 on the scallop shell of the Camino de Santiago. I’m mentioned over the years that it’s confusing to have the line of the symbol facing different ways in Galicia and next door Asturias, stressing that it’s very Spanish to have failed to standardise this in more than a thousand years . . .
Yesterday saw a trip out to the astonishing palace and gardens of La Granja in the quaint village of Ildefonso, near Segovia. One of the famous fountains in the gardens send up a jet of water 42m skywards. Given the holiday crowds, this resulted in a lot of folk getting thoroughly drenched, after they’d ignored the advice to move back from the fountain’s edge. How we laughed.
When you are in a deep hole, Scholz, stop digging, advises AEP. Olaf Scholz must choose – he insists – between an energy embargo on Russia or a moral embargo on Germany. See the full article below.
The EU/Quote of the Day
The war in Ukraine was a crucial test for the EU’s leaders. Once again, it appears they are intent on bottling it.
Finally . . .
On 11 April, it became illegal in Spain for restaurants to refuse to give people tap water, obliging them to pay for bottled stuff. In the place we had lunch yesterday, we had to remind the management of this. I imagine this is happening all over the country.
For new reader(s): If you’ve landed here looking for info on Galicia or Pontevedra, try here. If you’re passing through Pontevedra on the Camino, you’ll find a guide to the city there.
Olaf Scholz must choose between an energy embargo on Russia, or a moral embargo on Germany. Germany made a choice to increase its reliance on Russian gas after the invasion of Crimea, and is responsible for its own predicament: Ambrose Evans-Pritchard, The Telegraph
As the battle of the Donbas begins and the full might of Russian artillery and airpower comes to bear, western Europe’s refusal to cut off funding for Vladimir Putin’s war machine is untenable.
The moral and political damage to the EU itself is becoming prohibitive. The policy is already a diplomatic trainwreck for Germany, stunned to discover that President Frank-Walter Steinmeier is a pariah – the Kurt Waldheim of our era? – so sullied by two decades as the dark lord of Kremlin collusion that Ukraine won’t have him in the country.
The foot-dragging does not do justice to the German people, who overwhelmingly support a response that rises to the existential threat now facing Europe’s liberal order. The current policy fails even on its own terms. The calibrated escalation of sanctions does not deliver a sufficient shock to change Putin’s calculus. It drags out the conflict and keeps commodity prices higher for longer. “If halting gas imports from Russia make sense, then do so immediately,” says Clemens Fuest, head of the IFO Institute. The strategy adds up only if the unstated preference is an honourable capitulation by Ukraine so that Europe can return to business as usual, with token punishment of the Kremlin for appearances. But the Ukrainian people refuse to play their part in that unheroic arrangement.
Germany’s five leading institutes have issued a joint report concluding that a total and immediate embargo of Russian oil and gas would reduce economic growth to 1.9% this year – yes, growth – followed by a contraction of 2.2% next year. Unemployment would tick up from 5.2 to 6%. Inflation would stay higher for a little longer. It would be a middling sort of recession, mild in comparison with the wipe-out losses of the global financial crisis and the pandemic. The damage for the EU economy as a whole would be half of this.
The five institutes have high status in Germany. Their verdict endorses earlier work by Bonn and Cologne Universities, published as a ECONtribute Policy Brief. This is embarrassing for Chancellor Olaf Scholz who rebuked these economists in an ARD interview, calling them “irresponsible” and dismissing their mathematical models as useless.
The ECONtribute paper argued that an embargo would be manageable with recourse to monetary and fiscal buffers. Furthermore it should be done “as early as possible” to force everybody to adapt over the summer months of low gas usage. Scholz is sticking to his line that an instant cut-off of Russian energy would push great sectors of the German economy over the edge, undermining public consent for the policy. Warnings from industry have been apocalyptic.
The Chemical Industry Federation says a blockade would force the closure of the entire chemical park, pushing millions of workers into Kurzarbeit (temporary lay-offs subsidised by the state). “Nobody knows whether we’d be able to start up again,” said Christian Kullmann, the federation’s president. This in turn would set off a chain-reaction through the supply chain, from car manufacturing and pharmaceuticals, to packaging and construction. “One after the other would topple. It is a drastic situation and the economy might not survive,” he told Radio WDR5. Kullmann said the chemical industry would have to shut within days if energy supplies were cut off. But is that really what would happen?
There is no longer a gas shortage in Europe. Inventories are higher than the historical average for mid-April, thanks to liquefied natural gas from the US and mild weather in Asia, which frees up global supply. There will be no crunch in gas supplies before next winter, which is why the five institutes think Germany could muddle through the rest of this year with economic growth even in the worst-case scenario.
It is perhaps unfair to pick on Germany because other EU states hide behind its skirts, all too willing to let the status quo continue. Yet nobody doubts that all Europe would fall into line if Berlin lifted its veto on an embargo. Nor can one quickly forget that the German finance ministry, though its iron-control of the EU’s economic machinery, inflicted an economic depression on southern Europe and Ireland during the eurozone banking crisis from 2008 to 2012, an episode that it framed falsely as a debt crisis and a morality tale of fiscal profligacy.
The Berlin narrative was bogus. There had been no fiscal spree in Ireland, Spain, or even Italy. The sorry saga was a capital flows crisis caused first and foremost by Germany’s model of vendor financing and its chronic trade surpluses. The “remedies” imposed were obscurantist. Austerity overkill led to a self-feeding downward spiral, causing debt ratios to rise further. The result of this economic malpractice was a deeper and longer slump for the victim states than in the 1930s, and youth jobless rates reaching 50% across an arc of Europe.
Germany made a choice to increase its reliance on Russian hydrocarbons after the invasion of Crimea in 2014, and is responsible for its own predicament, unlike the “Club Med” a decade ago. It is being asked for a lesser sacrifice, and for a higher purpose: to halt slaughter on the EU’s doorstep is modest by comparison.
In any case, there are grounds for thinking that imported Russian gas could be replaced entirely by next winter. Extra supply of gas and coal is emerging all over the place, above all from through displaced imports no longer needed in China. Chinese coal imports fell 40% by volume in March. The Communist Party is switching back to domestic mine production at breakneck speed for reasons of national security, fearing that the US could at some point choke seaborne supplies of thermal coal. This is feeding through global markets. Rotterdam coal futures prices have fallen 25% since peaking 5 weeks ago, which allows gas-to-coal switching for power plants. Citigroup thinks spot gas prices in Europe could fall by half this summer.
The global oil market remains tight but the International Energy Agency has again cut its global demand forecast, this time because of China’s Omicron lockdowns and Xi Jinping’s refusal to abandon zero-Covid policies. The IEA has trimmed global crude demand by 1.5m barrels a day in a matter of weeks. The US is adding a million a day from its petroleum reserve. Washington has mobilised US companies to drill as a patriotic duty. They can undoubtedly produce an extra one million a day this year. Frackers added 13 rigs last week. New permits in the Permian basin have smashed earlier records.
Yes, it could still be traumatic. Rystad has warned of a spike to $240 by the summer if Europe opts for an oil blockade. But such prices would destroy global demand very quickly and bring the market back into equilibrium. It would no longer be politically possible for Saudi Arabia and the Gulf states to keep withholding 2.5m barrels a day of spare capacity. To try would be strategic suicide.
In any case, the political dam is bursting in Germany. Die Welt captured the exasperated mood of the media, calling Germany’s love affair with Putin’s Russia the “greatest and most dangerous miscalculation in the history of the Federal Republic”. The chairmen of the foreign relations, defence, and Europe committees in the Bundestag – spanning all three coalition parties – all called for an oil embargo on Thursday. “We must finally give Ukraine what it needs, and that includes heavy weapons. A complete energy embargo is doable,” said Anton Hofreiter, the Green chairman on Europe. “We are losing the respect of our neighbours on a massive scale. The problem is in the Chancellor’s office.”
When you are in a deep hole, Scholz, stop digging.