Here's a stat for you. Over the past ten years the number of tourists per annum in Mallorca has risen from just shy of six million to just shy of eleven million. Not quite a 100% increase, it's still one hell of an increase.
Such an abundance of tourists should have everyone jumping for joy. But not everyone is. Some are staring at beaches of the island, at roads, at treatment plants. Their expressions are ones of pain. How has it come to this? We know how. We know why. Mediterranean geopolitics and the advance of Airbnb (and others). We know the reasons. Nevertheless, an additional five million tourists in the space of a decade, 500k more each year: this is a massive increase.
It might be thought that the increase has been more concentrated than this. Go back ten years and the world was at the point of throwing itself off financial towers. But the crash didn't create a tourism wreck. It didn't enable tourism to truly set sail with a fair wind behind it, but nor was tourism becalmed. The numbers grew and then suddenly they exploded. There was the collision of collaborative economy internet portals, the firing of a terrorist's gun, and the sound of cash tills being reactivated through recovery. For some, this caused the perfect storm. For others, it was imperfect. Storm it was, though. And with storms come damage.
Crisis begat austerity. While recovery is all around, it is easy to forget that Spain and Mallorca are still labouring in the sludgy sand of parsimony. It took a constitutional manoeuvre and an alliance of political foes - the Partido Popular and PSOE - to enshrine austerity into statute. It remains there. It is yielding slightly, but it keeps well hidden the key to the giant padlock that guards and seals the public spending treasure chest.
Town halls are at least to now be allowed to spend some of the vast surpluses they have been attaining because of the law on financial stability. But they are still subject to spending restrictions on personnel. As can be observed in Capdepera and Muro, which are not the only examples, town halls are severely restricted in terms of police recruitment and police pay. The municipal security force is only one component of the constraint.
So, coincidental with this major increase in tourist numbers has been a block on the wherewithal to deal with them. Policing, or its absence, should have us all alarmed. But the strains are clear elsewhere: cleaning, water, sewage, health service, traffic. Have public services advanced in line with the five million or so tourists advance? They have not.
Should government, Madrid in particular, shoulder the blame? Partly, it should, but then what other options did Madrid really have? But demanding that ever greater financial resources are made available obscures the real issue. The rate of growth in tourism is unsustainable. An island such as Mallorca cannot deal with it. While infrastructure can be updated, there is only so much that the general environment can absorb. It is true that no one ever places precise figures on the island's load capacities, but intuitively as well as financially, there is broad agreement that there is a finite point. And it may well have been reached.
It is no longer just the environmentalists who argue the case. Divisions of the state recognise it, even the ministry for development. While it keeps a weather eye on Aena with its ambitions for increased flights (and by and large seems prepared to permit them), it has its other duties. It is the development ministry that oversees transport in general, land in general. It can talk to the traffic directorate or to the Bank of Spain. The opinions are the same. Not sustainable.
Given this general agreement, there is a need for different branches of government (and business and environmentalists) to come together. But the regional and national governments, thanks to political differences, butt heads rather than make accords. Mallorca, hamstrung by austerity and a disadvantageous financing system, is entitled to expect something more in return for all the wealth that the additional five million is generating. But I say again, financing isn't the real issue.
The regional government, via its legislation, is seeking to spread the load of tourism. It is looking to the island's interior to take some of the strain that has been created by the increased numbers. While this can be positive for some towns, it isn't entirely. Selva is one place where the infrastructure is creaking. Buger, tiny Buger, has the highest density of tourist places on the island relative to population. It doesn't have the ability to serve them.
The oft-quoted slogan is that Mallorca lives from tourism. It does indeed. But an impression given is of an island slowly dying from its own lifeblood.
Showing posts with label Financing. Show all posts
Showing posts with label Financing. Show all posts
Wednesday, June 07, 2017
Tuesday, December 20, 2016
Financing The Balearics
I would guess that for many of you who just visit Mallorca or indeed for many of you who live here, the subject of regional financing is pretty arcane and dull. I wouldn't blame you for thinking that; it is both. But this doesn't disguise its importance.
The principal means of financing Mallorca and the Balearics are borrowing (of which there is a substantial amount and so therefore an equally substantial level of debt) and the money that comes via the system of tax revenue distribution. By means of a very simplistic explanation, revenue from income tax and VAT goes into a massive Madrid pot, and Madrid makes calculations as to how much should be repaid, having taken account of the various regions' (and its own) needs. So, the pot is filled by all the regions, some of which do very nicely out of the redistribution, while others do less nicely. The Balearics is a region in the latter category.
Certain other taxes, such as the tourist tax, are purely regional taxes. The Balearic government can therefore keep all of it, but in percentage terms it is a comparatively minor amount. However, and despite what the government might argue to the contrary, it becomes a general tax by the very fact of its inclusion in the budget. Yes, it may in theory and indeed in practice be earmarked for specific projects, but it is still a budget item that cranks up the level of revenue to compensate for the perceived shortfall that comes from the system of distribution.
There is an argument that the Balearics is a wealthy region which should show regional fraternity by helping out the likes of Andalusia (which receives an enormous sum) and Extremadura (generally considered to be Spain's poorest region). This, in essence, is what the current system is all about, and the argument is a sound one. But it fails to take into account the natural disadvantage of the Balearics, i.e. being islands some 250 kilometres from the mainland.
The financing system at present is overwhelmingly used to fund basic services. Health has the highest budget, followed by education, with social services and the environment (which includes of course water resources) some considerable distance behind these two. In a sense, it is predominantly working capital as opposed to funding for capital investment. There are other sources for this investment, but the belief in the Balearics is that the state is too miserly with these (and doesn't always cough up what it should do), therefore compounding the view that the financing system is inherently prejudicial to Balearic interests.
Key among the grievances is therefore what is available for infrastructure. While there are very rightful concerns about investment in water and sewage, there can also appear at times to be unnecessary special pleading. An example that is often cited is the investment in the high-speed train on the mainland. But Mallorca (or indeed the other islands) don't exactly need such infrastructure. Moreover, the history of state investment allocated to railways shows that Mallorca has been at fault. There was, for instance, state money for the network extension to Alcudia. It was ultimately withdrawn because politics intruded and no consensus could be arrived at as to the route for the extension.
Nevertheless, there are legitimate gripes about infrastructure, about transport and connectivity and about the added costs that arise because of insularity. In addition, the notion of Balearic wealth is one challenged by regional politicians. Once upon a time - back in the 1990s - the Balearics for a brief while topped the regional chart for per capita GDP; the ranking is now seventh. This can partly be explained by the scale of population increase, unmatched in relative terms by other regions, and the unevenness of personal wealth that is based on a predominantly seasonal economy. This growth has brought with it additional demands on services and infrastructure and so therefore the constant calls for a financing system that reflects the realities of the Balearics.
Ever since coming to power in 2015, President Armengol and government ministers have made the financing system a central theme of the administration. There is also the demand for a special economic regime (a revised one because what exists at present isn't special). While this embraces factors such as co-management of ports and airports (even more unlikely if there is further privatisation of the Aena airports authority), what it is essentially concerned with are fiscal measures to compensate the costs of insularity.
Getting both a fairer financing system and a special regime would constitute a major political achievement, which is why I mentioned this yesterday in the context of the 2019 regional election. Although there are good reasons to believe that Armengol will not be re-elected in any event, for the main opposition - the Partido Popular - there will be worries that getting a deal on financing would dilute its chances in 2019. The PP is therefore being placed in an awkward position. How politically can the PP make such a deal reflect well on it? Maria Salom, the new national government delegate in the Balearics, is doing the groundwork on this. The Rajoy government, because of its economic management, is now in a better position to deliver on financing and has, all along, wanted to do so; Brussels hadn't allowed it. We'll see.
The principal means of financing Mallorca and the Balearics are borrowing (of which there is a substantial amount and so therefore an equally substantial level of debt) and the money that comes via the system of tax revenue distribution. By means of a very simplistic explanation, revenue from income tax and VAT goes into a massive Madrid pot, and Madrid makes calculations as to how much should be repaid, having taken account of the various regions' (and its own) needs. So, the pot is filled by all the regions, some of which do very nicely out of the redistribution, while others do less nicely. The Balearics is a region in the latter category.
Certain other taxes, such as the tourist tax, are purely regional taxes. The Balearic government can therefore keep all of it, but in percentage terms it is a comparatively minor amount. However, and despite what the government might argue to the contrary, it becomes a general tax by the very fact of its inclusion in the budget. Yes, it may in theory and indeed in practice be earmarked for specific projects, but it is still a budget item that cranks up the level of revenue to compensate for the perceived shortfall that comes from the system of distribution.
There is an argument that the Balearics is a wealthy region which should show regional fraternity by helping out the likes of Andalusia (which receives an enormous sum) and Extremadura (generally considered to be Spain's poorest region). This, in essence, is what the current system is all about, and the argument is a sound one. But it fails to take into account the natural disadvantage of the Balearics, i.e. being islands some 250 kilometres from the mainland.
The financing system at present is overwhelmingly used to fund basic services. Health has the highest budget, followed by education, with social services and the environment (which includes of course water resources) some considerable distance behind these two. In a sense, it is predominantly working capital as opposed to funding for capital investment. There are other sources for this investment, but the belief in the Balearics is that the state is too miserly with these (and doesn't always cough up what it should do), therefore compounding the view that the financing system is inherently prejudicial to Balearic interests.
Key among the grievances is therefore what is available for infrastructure. While there are very rightful concerns about investment in water and sewage, there can also appear at times to be unnecessary special pleading. An example that is often cited is the investment in the high-speed train on the mainland. But Mallorca (or indeed the other islands) don't exactly need such infrastructure. Moreover, the history of state investment allocated to railways shows that Mallorca has been at fault. There was, for instance, state money for the network extension to Alcudia. It was ultimately withdrawn because politics intruded and no consensus could be arrived at as to the route for the extension.
Nevertheless, there are legitimate gripes about infrastructure, about transport and connectivity and about the added costs that arise because of insularity. In addition, the notion of Balearic wealth is one challenged by regional politicians. Once upon a time - back in the 1990s - the Balearics for a brief while topped the regional chart for per capita GDP; the ranking is now seventh. This can partly be explained by the scale of population increase, unmatched in relative terms by other regions, and the unevenness of personal wealth that is based on a predominantly seasonal economy. This growth has brought with it additional demands on services and infrastructure and so therefore the constant calls for a financing system that reflects the realities of the Balearics.
Ever since coming to power in 2015, President Armengol and government ministers have made the financing system a central theme of the administration. There is also the demand for a special economic regime (a revised one because what exists at present isn't special). While this embraces factors such as co-management of ports and airports (even more unlikely if there is further privatisation of the Aena airports authority), what it is essentially concerned with are fiscal measures to compensate the costs of insularity.
Getting both a fairer financing system and a special regime would constitute a major political achievement, which is why I mentioned this yesterday in the context of the 2019 regional election. Although there are good reasons to believe that Armengol will not be re-elected in any event, for the main opposition - the Partido Popular - there will be worries that getting a deal on financing would dilute its chances in 2019. The PP is therefore being placed in an awkward position. How politically can the PP make such a deal reflect well on it? Maria Salom, the new national government delegate in the Balearics, is doing the groundwork on this. The Rajoy government, because of its economic management, is now in a better position to deliver on financing and has, all along, wanted to do so; Brussels hadn't allowed it. We'll see.
Wednesday, December 30, 2015
A New Deal For The Town Halls
Ever since there was a change of government in the Balearics, we have been fed a constant diet of complaint by the new administration as to the unjust nature of the islands' financing by Madrid. At times it has appeared as if the regional government doth protest too much, but in spinning this line of financial lack of fair play its protests have unquestionably got home. Keep saying something often enough, and the message will eventually stick, even if one tires at its constant regurgitation.
If the government didn't have solid grounds for its complaint, the message would by now have been chewed over and spat out for being unpalatable in its bitterness of anti-Madrid propaganda. But the government does have solid grounds. There is unfairness, and Madrid in its now acting Partido Popular guise has accepted the message, even if it has been forced to by a regime of the left.
While this has principally been an argument related to Balearic government budgeting, there are the other levels of public administration which are likewise caught up in the vice of financial unfair play. There are plenty who would argue that the next level down in the institutional food chain, the Council of Mallorca, deserves not a cent more and that, on account of past profligacy and duplicated effort, it should in any event be consigned to the bin of local government for all time. With the current regime, there is no questioning its role. It is to be the target of greater not less largesse, powers being devolved to it, such as with tourism promotion.
This devolution of power coincides with one of the mantras of the regional government - that of being closer to the citizen. The system of public administration, decentralised in any event, has long been close, but this closeness has not always been exactly efficient. With the Council of Mallorca, its financial inefficiency stemmed from creating responsibilities to further justify its existence and from establishing entities with the appearance of mirroring or duplicating the government. Its president, Miquel Ensenyat, appears to be conscious of the need to not fall into the same trap. One takes him at his word, but the activities of the Council will be scrutinised for any evidence of past bad habits creeping back.
It is at the next level - the town halls - where the financial unfair play message is now being given full airing. The town halls, the closest of the close to the citizens, had managed to acquire massive debts (with one or two notable exceptions) through, as an example, an enormous increase in personnel levels from the start of the century. Madrid, as in Mariano Rajoy's PP, took them to task (and not only here in Mallorca). Legislation imposed caps and required financial stability. The rules, for now, remain in place.
The Rajoy reforms have had an impact. Previously heavily in debt, most town halls in Mallorca now run comparatively small debt levels, but the restrictiveness of the legislation, added to the general system of Balearic financing, is leading mayors - many of them far from radical - to now demand a change. If they are to be genuinely close to the citizens, they require the financial wherewithal to meet such a commitment.
The El Pi party, whose function it must now realise, following an election in which it failed to scoop the prize of a seat in Congress, is to focus on its defence of regional interests from within the region, has been garnering support from the island's town halls to make a common front demanding an improved financial deal. One of the town halls supporting this is Alcudia, led by an El Pi mayor, Toni Mir. Innately conservative, as befits a former member of the PP, Mir has nonetheless railed against the current system of financing, both regional and municipal.
Alcudia is far from alone in now carrying a vast budget surplus. In complying with the financial stability demands, it cannot just spend it. Yet there are understandably calls for this to be permitted. It is needed to invest in infrastructure, but is also needed for one very important element of citizen proximity: the poor.
Perhaps more than anything, economic crisis exposed the high levels of social vulnerability that exist in Mallorca and Spain. The benefits system is far from adequate. Yes, it's abused but it is inadequate. Poverty, unemployment, evictions: these were all highlighted by the misery of crisis. And so was the inadequacy of social services, themselves decimated by cuts.
The point is that because of the inadequacy of benefits, institutions - town halls and the Council - have an important role to play, as do the charities such as Caritas. The demands from town halls for improved financing are now as much, if not more, about social assistance as they are for tarmacking side streets. The purse strings should be loosened.
If the government didn't have solid grounds for its complaint, the message would by now have been chewed over and spat out for being unpalatable in its bitterness of anti-Madrid propaganda. But the government does have solid grounds. There is unfairness, and Madrid in its now acting Partido Popular guise has accepted the message, even if it has been forced to by a regime of the left.
While this has principally been an argument related to Balearic government budgeting, there are the other levels of public administration which are likewise caught up in the vice of financial unfair play. There are plenty who would argue that the next level down in the institutional food chain, the Council of Mallorca, deserves not a cent more and that, on account of past profligacy and duplicated effort, it should in any event be consigned to the bin of local government for all time. With the current regime, there is no questioning its role. It is to be the target of greater not less largesse, powers being devolved to it, such as with tourism promotion.
This devolution of power coincides with one of the mantras of the regional government - that of being closer to the citizen. The system of public administration, decentralised in any event, has long been close, but this closeness has not always been exactly efficient. With the Council of Mallorca, its financial inefficiency stemmed from creating responsibilities to further justify its existence and from establishing entities with the appearance of mirroring or duplicating the government. Its president, Miquel Ensenyat, appears to be conscious of the need to not fall into the same trap. One takes him at his word, but the activities of the Council will be scrutinised for any evidence of past bad habits creeping back.
It is at the next level - the town halls - where the financial unfair play message is now being given full airing. The town halls, the closest of the close to the citizens, had managed to acquire massive debts (with one or two notable exceptions) through, as an example, an enormous increase in personnel levels from the start of the century. Madrid, as in Mariano Rajoy's PP, took them to task (and not only here in Mallorca). Legislation imposed caps and required financial stability. The rules, for now, remain in place.
The Rajoy reforms have had an impact. Previously heavily in debt, most town halls in Mallorca now run comparatively small debt levels, but the restrictiveness of the legislation, added to the general system of Balearic financing, is leading mayors - many of them far from radical - to now demand a change. If they are to be genuinely close to the citizens, they require the financial wherewithal to meet such a commitment.
The El Pi party, whose function it must now realise, following an election in which it failed to scoop the prize of a seat in Congress, is to focus on its defence of regional interests from within the region, has been garnering support from the island's town halls to make a common front demanding an improved financial deal. One of the town halls supporting this is Alcudia, led by an El Pi mayor, Toni Mir. Innately conservative, as befits a former member of the PP, Mir has nonetheless railed against the current system of financing, both regional and municipal.
Alcudia is far from alone in now carrying a vast budget surplus. In complying with the financial stability demands, it cannot just spend it. Yet there are understandably calls for this to be permitted. It is needed to invest in infrastructure, but is also needed for one very important element of citizen proximity: the poor.
Perhaps more than anything, economic crisis exposed the high levels of social vulnerability that exist in Mallorca and Spain. The benefits system is far from adequate. Yes, it's abused but it is inadequate. Poverty, unemployment, evictions: these were all highlighted by the misery of crisis. And so was the inadequacy of social services, themselves decimated by cuts.
The point is that because of the inadequacy of benefits, institutions - town halls and the Council - have an important role to play, as do the charities such as Caritas. The demands from town halls for improved financing are now as much, if not more, about social assistance as they are for tarmacking side streets. The purse strings should be loosened.
Thursday, September 03, 2015
Tango In Madrid: Balearic financing
It's the very stuff of negotiating. There are the red lines which cannot be crossed, which cannot be conceded, but then there are the negotiables, the ones that give the opponent some of what is sought while at the same time not weakening one's own position and perhaps even strengthening it.
When Francina met Mariano it was just conceivable that the latter would have sent the former away with a flea in her ear. Told her never to darken the doors of the Moncloa again. To take herself to the nunnery of the Balearics and to enter, along with the citizenship, a life of penury and asceticism, praying to the Lord for deliverance.
Whatever one thinks of Rajoy, he isn't stupid. He couldn't afford Francina returning to Mallorca as the failed and humiliated victim of his "aggressions" towards the Balearics, but a heroine nonetheless, the martyr of Partido Popular vengeful parsimony. Francina would have been able to take herself off to the La Beata procession in Santa Margalida on Sunday, her head held defiantly high, trailing behind the the simulator of the ascetic Saint Catalina as she defies the destructive force of the devil. Such symbolism.
Rajoy and others at PP high command might have given up on Bauzá long before the electorate did, but this doesn't mean they've given up on the Balearics. There are votes to be had, even in lands that turned their backs on Bauzá's version of the regional PP and placed into boxes their fateful electoral envelopes of PSOE, Més and Podemos. Notwithstanding a shift to the left at the regionals and the constant media reminders that the days of two-party politics are over, high command has reasons to not be totally fearful of how the Balearics might vote at the general election. The awkward squad having ensured that Bauzá was spirited away to the Senate, the PP has a potential new look, even if it will be wearing a familiar brown suit. Not everything that Mateo Isern does is for the best, such as his fashion sense, but Palma's one-time mayor, a darling of some at high command and a popular enough figure in the Balearics, despite the PP, could give the party a boost at the head of the list of candidates for Congress and a consequent boost to Rajoy as well.
Not long after Armengol finally managed to scrape a government together, her finance minister, Catalina Cladera, was despatched to Madrid with instructions to issue a broadside to national finance chief, Cristobal Montoro. The Balearics aren't going to put with PP lack of finance any longer. So there. It was all stirring stuff and all bound to fail, and everyone knew it would, including Francina and Catalina. But Francina had, after all, been on the point of losing the support of Biel Barceló and Més during their own little negotiation fandango. An improvement to financing for the Balearics was a demand from Biel, he also knowing full well that there wouldn't be one. Nevertheless, and for appearances' sakes - those of their respective parties and the general public - Catalina marched off, brandishing her sword and discovering that it was made of plastic rather than metal.
When Montoro said no, everyone was able to blame him and Rajoy. Face was not lost by Francina, Catalina (or Biel). It was all Rajoy's fault, and even the local PP was inclined to agree. For weeks since, Francina has uttered the same mantra. Every day, it has seemed. Deficit this, deficit that. Statutory investments here, special regime for the Balearics there. Rajoy knew exactly what was coming. No, Francina, he would not cross the deficit red line and allow the Balearics to plunge into the red and incur the wrath of watching Europeans in the process. But statutory investments that hadn't been paid? Take a look at the special regime again? Agree that the financing model needs revising, but not this year? Sure. Why not? Rajoy had nothing to lose except the money that Madrid has been withholding and a great deal to win by showing wavering PP voters in the Balearics that he wasn't the devil in disguise.
So the heavy-booted steps on the dance floor of the pre-meeting weeks have ended in the tango of Madrid, Mariano conceding what he was happy to. There was no surprise because, despite Catalina shouting at Montoro, he had some while ago conceded that the Balearics needed better treatment. It was a done deal before Francina got on the plane.
Rajoy says that Balearic financing does need modifying, but it won't be looked at until next year. For Francina, financing and the eco-tax came as a package. Get better financing and the tax could be dropped. Because of the other negotiations, those with Biel, the tax has now become more likely. There are some things you can't give way on.
When Francina met Mariano it was just conceivable that the latter would have sent the former away with a flea in her ear. Told her never to darken the doors of the Moncloa again. To take herself to the nunnery of the Balearics and to enter, along with the citizenship, a life of penury and asceticism, praying to the Lord for deliverance.
Whatever one thinks of Rajoy, he isn't stupid. He couldn't afford Francina returning to Mallorca as the failed and humiliated victim of his "aggressions" towards the Balearics, but a heroine nonetheless, the martyr of Partido Popular vengeful parsimony. Francina would have been able to take herself off to the La Beata procession in Santa Margalida on Sunday, her head held defiantly high, trailing behind the the simulator of the ascetic Saint Catalina as she defies the destructive force of the devil. Such symbolism.
Rajoy and others at PP high command might have given up on Bauzá long before the electorate did, but this doesn't mean they've given up on the Balearics. There are votes to be had, even in lands that turned their backs on Bauzá's version of the regional PP and placed into boxes their fateful electoral envelopes of PSOE, Més and Podemos. Notwithstanding a shift to the left at the regionals and the constant media reminders that the days of two-party politics are over, high command has reasons to not be totally fearful of how the Balearics might vote at the general election. The awkward squad having ensured that Bauzá was spirited away to the Senate, the PP has a potential new look, even if it will be wearing a familiar brown suit. Not everything that Mateo Isern does is for the best, such as his fashion sense, but Palma's one-time mayor, a darling of some at high command and a popular enough figure in the Balearics, despite the PP, could give the party a boost at the head of the list of candidates for Congress and a consequent boost to Rajoy as well.
Not long after Armengol finally managed to scrape a government together, her finance minister, Catalina Cladera, was despatched to Madrid with instructions to issue a broadside to national finance chief, Cristobal Montoro. The Balearics aren't going to put with PP lack of finance any longer. So there. It was all stirring stuff and all bound to fail, and everyone knew it would, including Francina and Catalina. But Francina had, after all, been on the point of losing the support of Biel Barceló and Més during their own little negotiation fandango. An improvement to financing for the Balearics was a demand from Biel, he also knowing full well that there wouldn't be one. Nevertheless, and for appearances' sakes - those of their respective parties and the general public - Catalina marched off, brandishing her sword and discovering that it was made of plastic rather than metal.
When Montoro said no, everyone was able to blame him and Rajoy. Face was not lost by Francina, Catalina (or Biel). It was all Rajoy's fault, and even the local PP was inclined to agree. For weeks since, Francina has uttered the same mantra. Every day, it has seemed. Deficit this, deficit that. Statutory investments here, special regime for the Balearics there. Rajoy knew exactly what was coming. No, Francina, he would not cross the deficit red line and allow the Balearics to plunge into the red and incur the wrath of watching Europeans in the process. But statutory investments that hadn't been paid? Take a look at the special regime again? Agree that the financing model needs revising, but not this year? Sure. Why not? Rajoy had nothing to lose except the money that Madrid has been withholding and a great deal to win by showing wavering PP voters in the Balearics that he wasn't the devil in disguise.
So the heavy-booted steps on the dance floor of the pre-meeting weeks have ended in the tango of Madrid, Mariano conceding what he was happy to. There was no surprise because, despite Catalina shouting at Montoro, he had some while ago conceded that the Balearics needed better treatment. It was a done deal before Francina got on the plane.
Rajoy says that Balearic financing does need modifying, but it won't be looked at until next year. For Francina, financing and the eco-tax came as a package. Get better financing and the tax could be dropped. Because of the other negotiations, those with Biel, the tax has now become more likely. There are some things you can't give way on.
Wednesday, September 02, 2015
From Banbury Cross To Extremadura
Extremadura is a region of Spain north of Andalusia that nestles next to Portugal. The name comes from "extremo", the generally accepted view being that it was the land furthest from Castile and Leon at the time of the re-conquest and so the furthest but also first line of defence against the Islamic occupation. It is at the extremity of Spain, which implies a certain remoteness and distance, and, more than just geographically, it is. This is a land which is one of the poorest regions of Spain. Its population is roughly similar to that of the Balearic Islands (around 1.1 million), yet its area is vastly greater. Its economy is predominantly services based and great strides are being made to develop its tourism - it is actually one of the more innovative and proactive regions of Spain in this regard. But it is also agricultural, known for the production of tobacco and charcuterie. And its farmers have found themselves in the middle of one almighty great political spat.
Miquel Ensenyat, the president of the Council of Mallorca, was born in Banbury. It is unlikely that the infant Miquel ever became familiar with the competing versions of the Banbury Cross rhyme, but had he, then he would have known the one involving Tommy buying a penny white loaf, a penny white cake and a two-penny apple pie. In the rural Oxfordshire of the eighteenth century, they wouldn't have been reliant on handouts through a redistributive system of tax income, but were the rhyme to be updated and placed in a Spanish context, Tommy would be buying his penny white loaf with a penny derived from Balearic tax revenue, and Tommy, moreover, would have relocated: to Extremadura.
While the children of the Balearics go to school with colouring crayons of thirty-year vintage, the children of Extremadura arrive at their schools with brand new tablets. This was an observation made by Miquel in an interview for "El Mundo" which has blown up in to that almighty great spat. A further one had to do with the farmers of Extremadura. They get paid salaries so that they can go and sit in a bar. This was not an original observation, as some years ago the leader of the UDC (Catalonia Democratic Union), Josep Antoni Duran, had said this of the Extremaduran farmers.
In one respect, drawing on a remark by Duran, might seem odd. The UDC is not what you would call left-wing, unlike Miquel and his party (Més, aka the PSM, Mallorcan Socialists), but the UDC is a Catalonian nationalist party, and it is this nationalism which forms part of the row and the exchanges of opinion between Ensenyat and the PSOE president of Extremadura, Guillermo Fernández Vara, to which have been added the views of any number of other politicians, both in the Balearics and Extremadura.
The spokesperson for the Extremadura government, Isabel Gil Rosiña, has referred to the creation of "unnecessary tensions" raised by people who want to "separate", by which she means nationalism and independence - Catalonian independence, something which Ensenyat favours, as he also favours a political federation of the Catalan Lands of which the Balearics would be a part.
At the heart of all of this, as it has been for years and so since Duran made his original remark about the Extremadura farmers, is money. Nationalism aside, it is the system of financing which is what Ensenyat was referring to, one under which the Balearics (and Catalonia) end up in effect subsidising regions of Spain such as Extremadura. The Balearics, with an almost identical population, raises vastly more in revenues than Extremadura does.
Vara, for his part, says that the children's tablets are not paid for with Balearic money but with the region's own finances, part of which come from the fact that, for all that it isn't that wealthy, it creates more energy than it needs. It benefits from the tax pot, but it gives back in a different way. Regardless of this and regardless also of nationalism, the system of regional financing is one that generates considerable heat, which is why President Armengol is so keen to pursue a better deal from Mariano Rajoy.
Armengol and PSOE have been embarrassed by Ensenyat's comments, though they are saying very little about them. Biel Barceló of Més has said they were "unfortunate" but prefers to attach the blame to Madrid. The people of Extremadura and the Balearics are not responsible for conflict or disputes over financing, Madrid is.
The fallout from the spat is unlikely to claim Ensenyat, although Xavier Pericay of the anti-nationalist Ciudadanos has said that he should resign. Jesus Jurado of Podemos, represented at the Council of Mallorca, has been equivocal in his support of Ensenyat, but he says of him that he doesn't mince his words. Perhaps not, but sometimes they might be chosen with greater care.
Miquel Ensenyat, the president of the Council of Mallorca, was born in Banbury. It is unlikely that the infant Miquel ever became familiar with the competing versions of the Banbury Cross rhyme, but had he, then he would have known the one involving Tommy buying a penny white loaf, a penny white cake and a two-penny apple pie. In the rural Oxfordshire of the eighteenth century, they wouldn't have been reliant on handouts through a redistributive system of tax income, but were the rhyme to be updated and placed in a Spanish context, Tommy would be buying his penny white loaf with a penny derived from Balearic tax revenue, and Tommy, moreover, would have relocated: to Extremadura.
While the children of the Balearics go to school with colouring crayons of thirty-year vintage, the children of Extremadura arrive at their schools with brand new tablets. This was an observation made by Miquel in an interview for "El Mundo" which has blown up in to that almighty great spat. A further one had to do with the farmers of Extremadura. They get paid salaries so that they can go and sit in a bar. This was not an original observation, as some years ago the leader of the UDC (Catalonia Democratic Union), Josep Antoni Duran, had said this of the Extremaduran farmers.
In one respect, drawing on a remark by Duran, might seem odd. The UDC is not what you would call left-wing, unlike Miquel and his party (Més, aka the PSM, Mallorcan Socialists), but the UDC is a Catalonian nationalist party, and it is this nationalism which forms part of the row and the exchanges of opinion between Ensenyat and the PSOE president of Extremadura, Guillermo Fernández Vara, to which have been added the views of any number of other politicians, both in the Balearics and Extremadura.
The spokesperson for the Extremadura government, Isabel Gil Rosiña, has referred to the creation of "unnecessary tensions" raised by people who want to "separate", by which she means nationalism and independence - Catalonian independence, something which Ensenyat favours, as he also favours a political federation of the Catalan Lands of which the Balearics would be a part.
At the heart of all of this, as it has been for years and so since Duran made his original remark about the Extremadura farmers, is money. Nationalism aside, it is the system of financing which is what Ensenyat was referring to, one under which the Balearics (and Catalonia) end up in effect subsidising regions of Spain such as Extremadura. The Balearics, with an almost identical population, raises vastly more in revenues than Extremadura does.
Vara, for his part, says that the children's tablets are not paid for with Balearic money but with the region's own finances, part of which come from the fact that, for all that it isn't that wealthy, it creates more energy than it needs. It benefits from the tax pot, but it gives back in a different way. Regardless of this and regardless also of nationalism, the system of regional financing is one that generates considerable heat, which is why President Armengol is so keen to pursue a better deal from Mariano Rajoy.
Armengol and PSOE have been embarrassed by Ensenyat's comments, though they are saying very little about them. Biel Barceló of Més has said they were "unfortunate" but prefers to attach the blame to Madrid. The people of Extremadura and the Balearics are not responsible for conflict or disputes over financing, Madrid is.
The fallout from the spat is unlikely to claim Ensenyat, although Xavier Pericay of the anti-nationalist Ciudadanos has said that he should resign. Jesus Jurado of Podemos, represented at the Council of Mallorca, has been equivocal in his support of Ensenyat, but he says of him that he doesn't mince his words. Perhaps not, but sometimes they might be chosen with greater care.
Thursday, August 13, 2015
The Grand Illusion: Policies and finance
The new regional government came in with something slightly less than a blaze of glory. It was under-cooked, half-baked. Its component elements - PSOE, Més and the part that isn't actually governing only supporting, Podemos - burned the midnight oil on many a late spring night in conjuring up a bag of tricks for the new legislature to pluck from the hat and cry magic. You will believe in magic because the government is going to create it. Yes, its announcements of policy were attention-grabbing. Yes, these policies seemed only fair, right and just. But the government was under-cooked by the very process of so many cooks adding to the broth. They were carried away with the policies and there was one major flaw. Money.
These right and just policies include the basic social wage to those without work or resources, the reintroduction of health care to immigrants who had been cruelly denied it. They included and still include the reactivation of the Llevant railway line, scuppered through lack of finance by the Bauzá regime and left to rot until a cheap compromise was discovered - the "green" way. They no longer seem to include, if they ever truly did, an airline for the Balearics.
There is a great deal to applaud about the government. Its instincts seem right. It is fighting the good fight over large retail outlets and defending the smaller retailer. It wants to regulate on tourism matters in ways in which many will applaud - all-inclusives, a possibly more permissive regime for holiday lets. But then there is less applause for the eco-tax, itself as woolly, as half-baked in its intent as the government's intentions for all-inclusives and holiday lets. Give them time. Yes, they should be given time, but the eco-tax cuts to the heart of what most exercises the minds of the government. Money.
The fronting-up to the national government over the retail outlets, the narrative of "aggression" being shown towards the Balearics on this issue, does not endear Armengol to Rajoy. Nor do many things. There is further aggression being displayed by the intransigence on financing. The rights of Balearic citizens, denied for so long, are being further denied.
The eco-tax, prior to the election, was for Armengol a negotiable. It remained a negotiable as the teams from the different parties worked long into the nights arriving at their "agreements for change", the fundamentals of the tripartite government with only two parts active. Armengol let Biel Barceló have his way. Eco-tax it would be. But this was before the new government had truly started to butt heads with Madrid over the most important issue. Money.
For Armengol the eco-tax was a fallback position. If there were not a better financing arrangement with Madrid, it would be needed. She knew before the election, just as she now does that Rajoy and the national finance minister Montoro would not be for turning. This, therefore, was the illusion of much of the policy, one that may fade to the grey of delusion. Money.
The regional finance minister, Catalina Cladera, is now saying that the government's objectives for 2016 (let alone the current year) will be difficult to meet because of the poor levels of finance coming from Madrid. The basic rights of citizens are to be denied because of the national Partido Popular's victimisation of the Balearics. The citizen as victim of Madrid is the slogan of self-righteousness. The Balearic Government has right on its side, and it is there right alongside the citizen in admonishing the austerity, the parsimony and the aggressions of Madrid.
But what did the Armengol government really expect? Did its members truly believe that they could twist Montoro and Rajoy round to their way of thinking? Maybe they did, but unfortunately, the impression is unavoidable. The policies - some of them anyway - were always likely to be implausible because the financing was not going to be there.
Was it, therefore, all a grand illusion? Not completely no, as a change in national government may usher in a new system of financing. This system, though, would at the earliest be in place in 2017 and some of its effects would not be noticeable until later in that year - more than 24 months after the government took office. Actually, it shouldn't, where Biel Barceló is concerned, be a case of may usher in. One of his bargaining chips was to get Armengol to extract a commitment from PSOE's leader Pedro Sánchez that there will be a new and fairer system of financing. Even if there were to be though, would it in fact be in place for 2017? How many other cooks might Sánchez have to deal with? And so, might the regional government end up edging to the 2019 election with its policies and it, as a coalition, in tatters?
These right and just policies include the basic social wage to those without work or resources, the reintroduction of health care to immigrants who had been cruelly denied it. They included and still include the reactivation of the Llevant railway line, scuppered through lack of finance by the Bauzá regime and left to rot until a cheap compromise was discovered - the "green" way. They no longer seem to include, if they ever truly did, an airline for the Balearics.
There is a great deal to applaud about the government. Its instincts seem right. It is fighting the good fight over large retail outlets and defending the smaller retailer. It wants to regulate on tourism matters in ways in which many will applaud - all-inclusives, a possibly more permissive regime for holiday lets. But then there is less applause for the eco-tax, itself as woolly, as half-baked in its intent as the government's intentions for all-inclusives and holiday lets. Give them time. Yes, they should be given time, but the eco-tax cuts to the heart of what most exercises the minds of the government. Money.
The fronting-up to the national government over the retail outlets, the narrative of "aggression" being shown towards the Balearics on this issue, does not endear Armengol to Rajoy. Nor do many things. There is further aggression being displayed by the intransigence on financing. The rights of Balearic citizens, denied for so long, are being further denied.
The eco-tax, prior to the election, was for Armengol a negotiable. It remained a negotiable as the teams from the different parties worked long into the nights arriving at their "agreements for change", the fundamentals of the tripartite government with only two parts active. Armengol let Biel Barceló have his way. Eco-tax it would be. But this was before the new government had truly started to butt heads with Madrid over the most important issue. Money.
For Armengol the eco-tax was a fallback position. If there were not a better financing arrangement with Madrid, it would be needed. She knew before the election, just as she now does that Rajoy and the national finance minister Montoro would not be for turning. This, therefore, was the illusion of much of the policy, one that may fade to the grey of delusion. Money.
The regional finance minister, Catalina Cladera, is now saying that the government's objectives for 2016 (let alone the current year) will be difficult to meet because of the poor levels of finance coming from Madrid. The basic rights of citizens are to be denied because of the national Partido Popular's victimisation of the Balearics. The citizen as victim of Madrid is the slogan of self-righteousness. The Balearic Government has right on its side, and it is there right alongside the citizen in admonishing the austerity, the parsimony and the aggressions of Madrid.
But what did the Armengol government really expect? Did its members truly believe that they could twist Montoro and Rajoy round to their way of thinking? Maybe they did, but unfortunately, the impression is unavoidable. The policies - some of them anyway - were always likely to be implausible because the financing was not going to be there.
Was it, therefore, all a grand illusion? Not completely no, as a change in national government may usher in a new system of financing. This system, though, would at the earliest be in place in 2017 and some of its effects would not be noticeable until later in that year - more than 24 months after the government took office. Actually, it shouldn't, where Biel Barceló is concerned, be a case of may usher in. One of his bargaining chips was to get Armengol to extract a commitment from PSOE's leader Pedro Sánchez that there will be a new and fairer system of financing. Even if there were to be though, would it in fact be in place for 2017? How many other cooks might Sánchez have to deal with? And so, might the regional government end up edging to the 2019 election with its policies and it, as a coalition, in tatters?
Wednesday, January 14, 2015
Out Of Sight ... The Balearics
Luis de Guindos, Spain's minister for the economy and competitiveness, was in Palma on Monday. The five-star Hotel Valparaiso was the setting for a conference to which he had been invited as a speaker. Its theme was "the keys to economic recovery in Spain". Perhaps Sr. de Guindos would have marvelled at one key to this recovery. He was standing inside it. The Valparaiso has been bought by Chinese investors.
The minister was able to explain how Spain was now on the cusp of economic recovery, the keys having already been partially turned, and the attendees were able to hang on his every word. And my, what attendees they were. Abel Matutes, one-time minister for foreign affairs and owner of the Ibiza-based Palladium Hotel Group; two from the family Fluxá - Lorenzo of Camper and Juan Antonio from Lottusse; the director-general for Santander Bank in Spain; members of the regional government; the director-general of Endesa in the Balearics; bosses of Alcampo and El Corte Inglés; representatives of business associations, such as the Chamber of Commerce. The great and good came to hear what Sr. de Guindos had to say and, for the most part, they were happy with his words.
But they weren't totally happy. Abel Matutes noted that de Guindos could have offered greater recognition of the Balearics. The president of the Balearics Business Confederation said much the same, as did the vice-president of Harinas de Mallorca, the flour makers. In a way, their remarks reflected the tensions which are apparent at governmental level. The regional government has its issues with Madrid over financing, as it does over oil prospecting. These are issues which further reflect a longstanding grievance in Mallorca and the Balearics; that the islands contribute much to the overall Spanish economy but are too easily disregarded or ignored. And such ignorance can lead to the occasional gaffe. Let us not forget Mariano Rajoy having referred to the "island of Palma".
This grievance may be purely one of perception, but might there be more to it? The Balearics have deputies in the national parliament. The islands have the odd representative within the upper echelons of governmental administration, such as the tourism secretary-of-state Isabel Borrego, but she isn't a cabinet minister, and when one looks at the background of the current cabinet, one begins to understand why there might indeed be more to the grievance than simply a perception of neglect.
Including prime minister Mariano Rajoy, the cabinet comprises fourteen ministers. Of this fourteen, four of the current incumbents are from Madrid: José Manuel García-Margallo, foreign affairs: Rafael Catalá, justice; José Ignacio Wert, education; and de Guindos. Three more - the vice-president Soraya Sáenz de Santamaría, the interior minister Jorge Fernández and the minister for agriculture and the environment Isabel García - are all originally from the historic city of Valladolid in Castile and Leon, some 180 kilometres to the north-west of Madrid. Ana Pastor, the minister for development, is from Zamora, west of Valladolid.
But not hailing from Madrid itself has not stopped Sáenz de Santamaría having been a deputy for Madrid or Cristobal Montoro, the finance minister (from Jaén in Andalusia), having represented Madrid in Congress. Then there are the three ministers who have left the cabinet over the course of this administration: all from Madrid.
To these one has to take into account Rajoy from Galicia, where Ana Pastor was once the regional minister of health and José Wert was a deputy for La Coruña, and the two Basques - the ministers for defence and health, Pedro de Morenes and Alfonso Alonso Aranegui.
There are, therefore, only two ministers who are not part of a Madrid, Castile, Galicia and Basque elite of interconnection that resonates with the history of power in Spain. Madrid itself; the region of Castile which in essence was to create Spain and where, in the city of Valladolid, Isabel of Castile married Ferdinand of Aragon; Galicia, the region of Franco's birth and of Santiago de Compostela, the Saint James centre of Spain's religiosity; the Basque Country, historically one of the principal regions for banking and industry.
One of the two "outsiders" is José Manuel Soria, the minister for tourism, industry and energy, and thus Isabel Borrego's boss. He is from Las Palmas in Gran Canaria, as far from Madrid as it is possible to get. He is from the "other" islands, but he is not welcome in the Balearic Islands because of the oil issue. It might be said that he has gone Madrid native in disregarding Balearic sensitivities over oil.
When one considers the cabinet make-up, one can see why there might be more than just perception at work. This might equally apply to other regions of Spain, but those regions are closer to home; home being Madrid. Too little recognition of the Balearics? It might not be all that surprising.
The minister was able to explain how Spain was now on the cusp of economic recovery, the keys having already been partially turned, and the attendees were able to hang on his every word. And my, what attendees they were. Abel Matutes, one-time minister for foreign affairs and owner of the Ibiza-based Palladium Hotel Group; two from the family Fluxá - Lorenzo of Camper and Juan Antonio from Lottusse; the director-general for Santander Bank in Spain; members of the regional government; the director-general of Endesa in the Balearics; bosses of Alcampo and El Corte Inglés; representatives of business associations, such as the Chamber of Commerce. The great and good came to hear what Sr. de Guindos had to say and, for the most part, they were happy with his words.
But they weren't totally happy. Abel Matutes noted that de Guindos could have offered greater recognition of the Balearics. The president of the Balearics Business Confederation said much the same, as did the vice-president of Harinas de Mallorca, the flour makers. In a way, their remarks reflected the tensions which are apparent at governmental level. The regional government has its issues with Madrid over financing, as it does over oil prospecting. These are issues which further reflect a longstanding grievance in Mallorca and the Balearics; that the islands contribute much to the overall Spanish economy but are too easily disregarded or ignored. And such ignorance can lead to the occasional gaffe. Let us not forget Mariano Rajoy having referred to the "island of Palma".
This grievance may be purely one of perception, but might there be more to it? The Balearics have deputies in the national parliament. The islands have the odd representative within the upper echelons of governmental administration, such as the tourism secretary-of-state Isabel Borrego, but she isn't a cabinet minister, and when one looks at the background of the current cabinet, one begins to understand why there might indeed be more to the grievance than simply a perception of neglect.
Including prime minister Mariano Rajoy, the cabinet comprises fourteen ministers. Of this fourteen, four of the current incumbents are from Madrid: José Manuel García-Margallo, foreign affairs: Rafael Catalá, justice; José Ignacio Wert, education; and de Guindos. Three more - the vice-president Soraya Sáenz de Santamaría, the interior minister Jorge Fernández and the minister for agriculture and the environment Isabel García - are all originally from the historic city of Valladolid in Castile and Leon, some 180 kilometres to the north-west of Madrid. Ana Pastor, the minister for development, is from Zamora, west of Valladolid.
But not hailing from Madrid itself has not stopped Sáenz de Santamaría having been a deputy for Madrid or Cristobal Montoro, the finance minister (from Jaén in Andalusia), having represented Madrid in Congress. Then there are the three ministers who have left the cabinet over the course of this administration: all from Madrid.
To these one has to take into account Rajoy from Galicia, where Ana Pastor was once the regional minister of health and José Wert was a deputy for La Coruña, and the two Basques - the ministers for defence and health, Pedro de Morenes and Alfonso Alonso Aranegui.
There are, therefore, only two ministers who are not part of a Madrid, Castile, Galicia and Basque elite of interconnection that resonates with the history of power in Spain. Madrid itself; the region of Castile which in essence was to create Spain and where, in the city of Valladolid, Isabel of Castile married Ferdinand of Aragon; Galicia, the region of Franco's birth and of Santiago de Compostela, the Saint James centre of Spain's religiosity; the Basque Country, historically one of the principal regions for banking and industry.
One of the two "outsiders" is José Manuel Soria, the minister for tourism, industry and energy, and thus Isabel Borrego's boss. He is from Las Palmas in Gran Canaria, as far from Madrid as it is possible to get. He is from the "other" islands, but he is not welcome in the Balearic Islands because of the oil issue. It might be said that he has gone Madrid native in disregarding Balearic sensitivities over oil.
When one considers the cabinet make-up, one can see why there might be more than just perception at work. This might equally apply to other regions of Spain, but those regions are closer to home; home being Madrid. Too little recognition of the Balearics? It might not be all that surprising.
Sunday, October 05, 2014
Mallorca And The Mountain Of Gold
A mountain of gold. From a distant land known as Madrid, Cristobel the Fairy Godfather waved his magic wand and a spell was cast that flew over the sea as though it were a burnishing trail left by a mythical airplane borne by the wings of angels. The spell touched the highest peaks of the blessed islands of the Balearics and burst like the most benign and glorious fireworks, gold cascading down the valleys, across the plains and to the waters of sapphires. Mont Oro, for it was he, Cristobel the Gold Mountain of All The Treasures of Hispania, spake unto the entranced peoples of the blessed isles. "You shall all go to the Ball (de Bot). You shall all forever more wear glass slippers rather than flip-flops." And the peoples were most grateful.
Well, in a parallel universe the people and politicians of the Balearics might indeed be grateful, but last week there were hordes of ingrates stomping their feet and demanding more. Cristóbal Montoro, Spain's finance minister, had been doing his annual sums. Some for them, some more for them, a bit less for them, and he plucked numbers out of the air and called them the allocations by regions of the state budget. Overlooking the small matter of an 87% increase in the allocation for the Balearics, far from everyone was happy, the discontent coming about because, regardless of this act of central government generosity, the Balearics will still get less per head of population from the national pot than mostly every other region of Spain.
Cheesed off various politicos and businesspeople might be by the miserly sum of 138.4 million euros, but they might remember that there was a time, not so long ago, when the Balearics did much more nicely thank you from the budget. in 2007, as an example, the allocation was 218 million euros, and if one goes back over the years, it will be discovered that, though the amount fluctuated, the Balearics usually did reasonably well. These budget allocations are for what are essentially strategic investments. The lion's share of the Balearics budget is for airports and ports with agriculture and the environment taking up most of the rest.
More investment could doubtless come in handy, but it has to be taken into account that there are eighteen other regions or communities holding out the begging bowl. One of them, Andalusia, despite it being a hotbed of socialism, regularly benefits from Madrid's largesse. It is a comparatively poor region. It is also big. Another, Catalonia (you might have heard of this region, it has been agitating for more for centuries), is also big. It isn't poor but last year it got clobbered by the Rajoy government. 25% down, something else which added to the Mas attack on the Constitution. In 2015, the budget will be up again, as indeed it will be in Galicia (the home region of Rajoy, oh and of Franco as well).
Politics probably do play a part in the budgets, but in truth these allocations are very small beer when compared with what the regions get through the redistribution of tax revenues. This is the principal source of the regions' finances, and it is something for which the Balearics have a very legitimate gripe. The people of the Balearics get back from Madrid around 300 million euros less than they put in.
Well, in a parallel universe the people and politicians of the Balearics might indeed be grateful, but last week there were hordes of ingrates stomping their feet and demanding more. Cristóbal Montoro, Spain's finance minister, had been doing his annual sums. Some for them, some more for them, a bit less for them, and he plucked numbers out of the air and called them the allocations by regions of the state budget. Overlooking the small matter of an 87% increase in the allocation for the Balearics, far from everyone was happy, the discontent coming about because, regardless of this act of central government generosity, the Balearics will still get less per head of population from the national pot than mostly every other region of Spain.
Cheesed off various politicos and businesspeople might be by the miserly sum of 138.4 million euros, but they might remember that there was a time, not so long ago, when the Balearics did much more nicely thank you from the budget. in 2007, as an example, the allocation was 218 million euros, and if one goes back over the years, it will be discovered that, though the amount fluctuated, the Balearics usually did reasonably well. These budget allocations are for what are essentially strategic investments. The lion's share of the Balearics budget is for airports and ports with agriculture and the environment taking up most of the rest.
More investment could doubtless come in handy, but it has to be taken into account that there are eighteen other regions or communities holding out the begging bowl. One of them, Andalusia, despite it being a hotbed of socialism, regularly benefits from Madrid's largesse. It is a comparatively poor region. It is also big. Another, Catalonia (you might have heard of this region, it has been agitating for more for centuries), is also big. It isn't poor but last year it got clobbered by the Rajoy government. 25% down, something else which added to the Mas attack on the Constitution. In 2015, the budget will be up again, as indeed it will be in Galicia (the home region of Rajoy, oh and of Franco as well).
Politics probably do play a part in the budgets, but in truth these allocations are very small beer when compared with what the regions get through the redistribution of tax revenues. This is the principal source of the regions' finances, and it is something for which the Balearics have a very legitimate gripe. The people of the Balearics get back from Madrid around 300 million euros less than they put in.
Tuesday, October 15, 2013
The New Model Regional Financing System
Instead, the focus has been on how to make the regions more financially efficient, and efficient financing is very much on the agenda at present, while the debate surrounding it may prompt a reconsideration of the nature rather than structure of regional government, making the regions more not less responsible for finance and creating what would be more a genuine financial and fiscal federal arrangement than the one which currently exists.
The Spanish Government has said that it will look at a reform of the present system of regional financing next summer. Certain regions, especially Madrid, want this brought forward; regional financing needs to be examined with greater urgency.
The financing of the regions is hardly a straightforward matter. The Aznar government tried to make it more straightforward in 2001 by introducing a reform which would have, it had hoped, stood for all time and taken away the regular, five-yearly rounds of negotiations which had only succeeded in generating political tensions. Almost from the moment the 2001 reform was introduced, it was apparent that it was unworkable. A weakness was to have assumed that one key factor in allocating national revenues to the regions - that of population increase - would be essentially evenly distributed. It was not, and the Balearics, by going through a boom in population, was a region which demonstrated just how uneven it could be.
The most recent reform was in 2009 by the Zapatero government. Under this reform the regions got more from the national tax revenue pot - 50% of income tax and IVA (VAT) for example. There were various funds set up, one of them called the Competitiveness Fund from which the Balearics has done quite well, and the system of equalisation between the regions was made more flexible and adjusted annually.
Though in theory all regions benefited to some extent from the 2009 reform, it was not without its critics. They focused on the political as much as the financial aspects of the reform, and politics have always played a part in how the regions' finances have been worked out. In 2009, the political criticism fell squarely on Catalonia. It had been pressing for a different financing arrangement and it got much of what it wanted, prompting attacks on the Zapatero administration for having in effect bought Catalonia's support.
The Catalonian dimension sours current opinion in several regions, especially those led by the Partido Popular and which make greater contributions to the overall revenue pot from which their finances are then redistributed. Madrid is one such region. The Balearics is another.
The starting-point for evaluating these finances is what the individual regions bring in from the tax-gathering function they perform for national government. In terms of tax capacity per head of population, Madrid stands in first position. Second is the Balearics; its tax raising per capita is three times greater than the region with the lowest capacity, the Canary Islands.
Based on 2010 figures, the Balearics had a tax capacity of 2,692 million euros. The final totting-up, which took into account different funds in addition to redistribution of income tax and IVA revenues, left the Balearics short by 300 million. Madrid was short by around 2,800 million. The issue of efficient financing centres, therefore, on what some regions believe to be unfair. They, in effect, subsidise other regions of Spain, and this has been an argument that Catalonia has long made as part of its claims for greater autonomy or even independence.
Regions like Madrid and the Balearics are politically very different to Catalonia and though they believed that they lost out to Catalonia under the 2009 reform (and still the system in operation), they have a similar gripe. It is because of this that the reform to be undertaken by the Spanish Government is seen as being potentially highly significant. Not only will it be political in addressing the vital issue of Catalonia's finances and so therefore the drive towards independence or not, it might just herald a move towards more of a fiscal federalist state, one in which, because it shouldn't be forgotten, there are two regions which operate in a totally different way to all the rest - Navarre and the Basque Country. They keep their tax revenues and hand over a percentage to national government. As such, they are not a part of the system of redistribution. Might they be the model for a new regional financing system?
Thursday, January 03, 2013
Twenty Twenty: The bid that shouldn't be?
While the British honours system and Sports Personality of the Year have brought the London Olympics orgy to an end, it seems only appropriate to remind you what will happen on 7 January. Don't worry, it's not another awards ceremony, it is far duller than even that.
Submitting official bid books ranks pretty low on the excitement levels created by the Olympics, but this coming Monday is the day for the submission of the bid books for the 2020 Olympics. There will be three bids: Istanbul, Tokyo and Madrid.
Having managed to fail to secure the Games on the last two occasions, Madrid is hoping it will be third time lucky when Jacques Rogge picks the lucky number on 7 September in Buenos Aires. There's fortuitous you might think. Argentine capital, Spanish speaking, Lionel Messi and all that; Madrid must be a banker to get pulled out in September. It might have been before the Argentine president started going around nationalising Repsol's interests, but even this slight hiccup in fraternal Hispanidad relations probably isn't sufficient to scupper Madrid's chances and make all parties look decidedly embarrassed when they pitch up in Buenos Aires for the grand un-opening of the Olympic envelope.
There is a far greater risk to Madrid's bid, and I suspect you all know what it is. Money. The absence thereof. If there is any money, whose is it going to be? Because it won't be Spain's. It will be numbered notes from the IMF or the ECB, and neither of them, one would imagine, would be overly keen to see great wads of cash being thrown at an Olympics, least of all by a country with a well-earned reputation for turning major projects into nice little earners for all manner of politicians and others.
In the scheme of things, the 16 million euros that have apparently been spent thus far do not represent a huge amount, but of this spend, there have been one or two embarrassments, such as the report which, so it has been claimed, ran to a cost of nearly 700,000 euros but which proved to be worthless because one particular bank appeared as the main private-sector partner for the Olympics. Which bank do you think this might have been? If you reckon Bankia, then you have earned yourself a gold medal, one that isn't gold at all but is made out of worthless fool's gold. The mind boggles not only at the fact that someone was daft enough to even involve Bankia but also because of the associations the bank has (political involvement and a spot of alleged malfeasance).
In fact, Madrid's application document was pretty impressive. But then, producing a report detailing the application is one of the easier parts of the process. It was littered with the usual guff about what the Games would bring as well as all the stuff necessary to deal with accommodation, press, security and so on. However, other aspects of the preliminaries haven't been quite so impressive. The Games logo was unveiled to general bafflement and criticism. It looks like five flip-flops was one quip. One of the promotional videos (pura pasión) has been slated for the fact that it features flamenco, which isn't representative of Madrid, and people sitting around at cafés doing very little.
Under normal circumstances, I wouldn't quibble with Madrid's ambitions for the Games. But circumstances aren't normal. Were Madrid to be pulled out on 7 September, one can but only imagine the reaction of a shocked world that the capital of a country in such dire financial straits could be. It is no argument to suggest that the economy might be in better shape in seven years time, as commitments would have to start this year, were Madrid to win. And some of those commitments would come from the city of Madrid itself, already cash-strapped and in debt.
It wouldn't only be the infrastructure that would need funding, there would be the athletes as well. Spain would not have been as successful as it was at the 1992 Games had it not been for special funding. Its performances before Barcelona were poor and they have not come to close to matching those of 1992 since. The Spanish Olympic Committee just doesn't have the money. So where would this come from?
Monday marks only a further step along the way. The IOC evaluation commission will visit the candidate cities in March, report some time after, and the cities will brief IOC members in June. And on 7 September, the decision will be announced. Madrid? Well, part of me hopes that it succeeds. But it is a part that most certainly isn't my head.
QUIZ: "Libra, and my name is Charles. Now I like a woman that's quiet." It was of course The Floaters and it was truly awful. "Twenty Twenty". This was the 15th studio album by which American group?
Any comments to andrew@thealcudiaguide.com please.
Submitting official bid books ranks pretty low on the excitement levels created by the Olympics, but this coming Monday is the day for the submission of the bid books for the 2020 Olympics. There will be three bids: Istanbul, Tokyo and Madrid.
Having managed to fail to secure the Games on the last two occasions, Madrid is hoping it will be third time lucky when Jacques Rogge picks the lucky number on 7 September in Buenos Aires. There's fortuitous you might think. Argentine capital, Spanish speaking, Lionel Messi and all that; Madrid must be a banker to get pulled out in September. It might have been before the Argentine president started going around nationalising Repsol's interests, but even this slight hiccup in fraternal Hispanidad relations probably isn't sufficient to scupper Madrid's chances and make all parties look decidedly embarrassed when they pitch up in Buenos Aires for the grand un-opening of the Olympic envelope.
There is a far greater risk to Madrid's bid, and I suspect you all know what it is. Money. The absence thereof. If there is any money, whose is it going to be? Because it won't be Spain's. It will be numbered notes from the IMF or the ECB, and neither of them, one would imagine, would be overly keen to see great wads of cash being thrown at an Olympics, least of all by a country with a well-earned reputation for turning major projects into nice little earners for all manner of politicians and others.
In the scheme of things, the 16 million euros that have apparently been spent thus far do not represent a huge amount, but of this spend, there have been one or two embarrassments, such as the report which, so it has been claimed, ran to a cost of nearly 700,000 euros but which proved to be worthless because one particular bank appeared as the main private-sector partner for the Olympics. Which bank do you think this might have been? If you reckon Bankia, then you have earned yourself a gold medal, one that isn't gold at all but is made out of worthless fool's gold. The mind boggles not only at the fact that someone was daft enough to even involve Bankia but also because of the associations the bank has (political involvement and a spot of alleged malfeasance).
In fact, Madrid's application document was pretty impressive. But then, producing a report detailing the application is one of the easier parts of the process. It was littered with the usual guff about what the Games would bring as well as all the stuff necessary to deal with accommodation, press, security and so on. However, other aspects of the preliminaries haven't been quite so impressive. The Games logo was unveiled to general bafflement and criticism. It looks like five flip-flops was one quip. One of the promotional videos (pura pasión) has been slated for the fact that it features flamenco, which isn't representative of Madrid, and people sitting around at cafés doing very little.
Under normal circumstances, I wouldn't quibble with Madrid's ambitions for the Games. But circumstances aren't normal. Were Madrid to be pulled out on 7 September, one can but only imagine the reaction of a shocked world that the capital of a country in such dire financial straits could be. It is no argument to suggest that the economy might be in better shape in seven years time, as commitments would have to start this year, were Madrid to win. And some of those commitments would come from the city of Madrid itself, already cash-strapped and in debt.
It wouldn't only be the infrastructure that would need funding, there would be the athletes as well. Spain would not have been as successful as it was at the 1992 Games had it not been for special funding. Its performances before Barcelona were poor and they have not come to close to matching those of 1992 since. The Spanish Olympic Committee just doesn't have the money. So where would this come from?
Monday marks only a further step along the way. The IOC evaluation commission will visit the candidate cities in March, report some time after, and the cities will brief IOC members in June. And on 7 September, the decision will be announced. Madrid? Well, part of me hopes that it succeeds. But it is a part that most certainly isn't my head.
QUIZ: "Libra, and my name is Charles. Now I like a woman that's quiet." It was of course The Floaters and it was truly awful. "Twenty Twenty". This was the 15th studio album by which American group?
Any comments to andrew@thealcudiaguide.com please.
Wednesday, October 03, 2012
Unfair?: Balearics investment
President Bauzá is apparently hacked off by the fact that the Balearics will receive slightly less than 79 million euros worth of state public sector investment next year. 0.7% of the total investment in the regions by Madrid will float across the sea to the Balearics where Bauzá has been making a decent fist of getting the islands' deficit into line with that demanded by Madrid. Bauzá has towed the line, toadied to Rajoy some might say, and look what he gets for his trouble. If you take the shilling of following the Partido Popular party line, you end up without a shilling to your name. Political loyalty not being repaid? I'm not convinced.
Bauzá says the investment is unfair, but he isn't about to throw a hissy fit and go all Mas on Madrid. At the meeting of the regional presidents, it has been important to be seen to be putting on a face of unity for international and domestic consumption. Unfair, but how unfair?
The investment is a pittance. 80% of it is to come from the national ministries responsible for development, agriculture, food and environment. If these were divvied up equally, it might mean a mere 19 million for projects that would fall under the development ministry (typically transport infrastructure). The Balearics need more not less transport investment, especially in order to compensate for geographical isolation that make the islands more expensive and less competitive.
The Balearics have long been disadvantaged under the overall system of financing of the regions. Historically, the islands have been only one of three regions in Spain that have a negative balance, i.e. they provide more than they receive (Catalonia and Madrid are the others) under the system of financing whereby national government hands back a percentage of income tax and IVA revenues to the regions and via which the Balearics have always tended to get less of the pot. And this despite the principle under which regional financing operates - that known as "solidarity" under the Spanish Constitution.
The measly amount on offer for investment contrasts with that for the Canaries which will get almost four times as much as the Balearics, and there is more than just a hint of political expedience about how the investments have been allocated; for example Galicia, where there are to be regional elections shortly, has the third highest percentage.
The cuts to regional investment can be explained and are explained by the parlous state of national finances. No one can doubt this explanation, but there is another dynamic at play, that of penalising the regions which have become the whipping boys for all Spain's troubles. The regions do soak up enormous amounts of finance, but they became, as far as the Rajoy government was concerned, public-finance enemy number one, once heaping all the blame for Spain's mess onto the previous Zapatero government had run its course.
Regional government and decentralisation are financial burdens, but they are burdens primarily because of the systems of administration (including, for example, the likes of island councils in the Balearics) and because these systems were allowed to develop without anyone saying boo. And once they were in place, they led to the excesses with which we have been made all too familiar.
There is a suspicion though that the regions are being subjected to a campaign of being undermined with the eventual aim of neutering or eliminating them. This is the extreme view, but it is one that has champions on the political right who have always been against the regions because they go against the notion of a nationalist Spain. A practical, as opposed to a political view of regional neutering would, it is argued, reduce the financial burden. Which is true up to a point, but key responsibilities that the regions have - for health, education, social services - would still have to be paid for and would still need local administrations. The question is whether these have to be political administrations.
But whether an undermining of the regions were styled as political or practical, it would be perceived by supporters of regionalism in the same way - as an assault on the solution that was adopted after Franco (regional government) to keep Spain together, not break it up.
Bauzá, so some would claim, is a turkey waiting to vote for Christmas wrapped up in the tin foil shield of a president protesting the unfairness of the Balearics being roasted to a crisp. He has been accused of being anti-regionalist. He couldn't possibly say that the investment is fair as he would be political dead meat if he were to. But how much does he really believe that it is unfair?
Any comments to andrew@thealcudiaguide.com please.
Bauzá says the investment is unfair, but he isn't about to throw a hissy fit and go all Mas on Madrid. At the meeting of the regional presidents, it has been important to be seen to be putting on a face of unity for international and domestic consumption. Unfair, but how unfair?
The investment is a pittance. 80% of it is to come from the national ministries responsible for development, agriculture, food and environment. If these were divvied up equally, it might mean a mere 19 million for projects that would fall under the development ministry (typically transport infrastructure). The Balearics need more not less transport investment, especially in order to compensate for geographical isolation that make the islands more expensive and less competitive.
The Balearics have long been disadvantaged under the overall system of financing of the regions. Historically, the islands have been only one of three regions in Spain that have a negative balance, i.e. they provide more than they receive (Catalonia and Madrid are the others) under the system of financing whereby national government hands back a percentage of income tax and IVA revenues to the regions and via which the Balearics have always tended to get less of the pot. And this despite the principle under which regional financing operates - that known as "solidarity" under the Spanish Constitution.
The measly amount on offer for investment contrasts with that for the Canaries which will get almost four times as much as the Balearics, and there is more than just a hint of political expedience about how the investments have been allocated; for example Galicia, where there are to be regional elections shortly, has the third highest percentage.
The cuts to regional investment can be explained and are explained by the parlous state of national finances. No one can doubt this explanation, but there is another dynamic at play, that of penalising the regions which have become the whipping boys for all Spain's troubles. The regions do soak up enormous amounts of finance, but they became, as far as the Rajoy government was concerned, public-finance enemy number one, once heaping all the blame for Spain's mess onto the previous Zapatero government had run its course.
Regional government and decentralisation are financial burdens, but they are burdens primarily because of the systems of administration (including, for example, the likes of island councils in the Balearics) and because these systems were allowed to develop without anyone saying boo. And once they were in place, they led to the excesses with which we have been made all too familiar.
There is a suspicion though that the regions are being subjected to a campaign of being undermined with the eventual aim of neutering or eliminating them. This is the extreme view, but it is one that has champions on the political right who have always been against the regions because they go against the notion of a nationalist Spain. A practical, as opposed to a political view of regional neutering would, it is argued, reduce the financial burden. Which is true up to a point, but key responsibilities that the regions have - for health, education, social services - would still have to be paid for and would still need local administrations. The question is whether these have to be political administrations.
But whether an undermining of the regions were styled as political or practical, it would be perceived by supporters of regionalism in the same way - as an assault on the solution that was adopted after Franco (regional government) to keep Spain together, not break it up.
Bauzá, so some would claim, is a turkey waiting to vote for Christmas wrapped up in the tin foil shield of a president protesting the unfairness of the Balearics being roasted to a crisp. He has been accused of being anti-regionalist. He couldn't possibly say that the investment is fair as he would be political dead meat if he were to. But how much does he really believe that it is unfair?
Any comments to andrew@thealcudiaguide.com please.
Tuesday, July 12, 2011
For Sale: Hotel, Needs Work
The possibility that the Posibilitum investment group, the owners of Alcúdia's Bellevue complex, might acquire the Hotasa hotels of the troubled Nueva Rumasa conglomerate should be viewed as welcome news by those running the hotels. I am told that the hotels are experiencing difficulties in providing services they should be. When the hotels opened for the season, and at one point it looked as some might not, suppliers made it clear that they would supply only on a cash-on-delivery basis.
The Hotasa hotels, which include three in Can Picafort, are an extreme case, but they are far from alone in having owners seeking buyers. Much of Mallorca's hotel stock is up for sale. And there are very few buyers.
The accord between tourism minister Carlos Delgado and the hoteliers that should pave the way for reform of the tourism law and so facilitate hotel conversion and change of use has been sought by the hoteliers for some years. The antiquity of many hotels makes their redevelopment a pressing necessity, but even with agreement and legal reform, a question would remain. How would these conversions be funded?
Delgado has said that the days of expecting grants, especially from central government, have passed. The banks have all but turned the taps off. The markets are reassured by this summer's rise in tourism numbers, but the leading hotel chains - and those which would be listed and more attractive to investors - have tended to look overseas for growth potential.
The hype of all the talk of hotel renovations and changes of use and the unions getting hot under the collar and threatening protests as a consequence may therefore be just that - hype. Some hotels and hotel chains are in good enough shape to effect changes, but many are not.
One reason why owners want to sell hotels and why it is proving difficult to do so and would also prove difficult to convert them is because they are that old that the cost of conversion would be nigh on prohibitive. Buyers are unlikely to take on hotels that demand significant investment in addition to what are sales tags which are too high. Like with many restaurants or bars that are for sale, the expectations of owners are unrealistic, based on past or expected performance and divorced from the circumstances that now obtain.
Bellevue, though taken on by Posibilitum, is a case in point when it comes to old stock. The complex, all 1400 apartments of it, is nearly 40 years old. Its sheer size is a constraint on renovation as is its age, but renovation is badly needed. Bellevue has acquired a more diverse market over the past few years - it isn't the ultra-Brit complex it once was - but it tends to be hotels for the British market in the resorts of Alcúdia and Magalluf that are the oldest and which attract less profit because of the very nature of the particular market they cater for. Another reason, therefore, why prospective buyers might be wary.
A further reason is the complexity of financing arrangements and ownership issues. The travel and hotel group Orizonia had, still has as far as I am aware, a mortgage on Bellevue which was raised as a guarantee against a debt to the company run up by the previous owners, the now bust Grupo Marsans. And there is a similar story with Hotasa.
Bank funding requires security, and in the case of Hotasa, the house has well and truly been bet. The court bankruptcy proceedings relating to Nueva Rumasa have revealed the scale of the mortgages that hang over Hotasa. One hotel alone, Santa Fe in Can Picafort, has been used as a guarantee four times, to which can be added the embargo slapped on it by the Hacienda in respect of a debt of some 120,000 euros. In total, the seven Hotasa hotels in the Balearics have mortgages valued at just short of 138 million euros, three and a half times the size of the mortgage debt said to be owed to Orizonia.
The judge presiding over the proceedings has been obliged to appoint five administrators because of the sheer complexity of the hotels' affairs. The labyrinth of different companies in addition to the various mortgages would surely make a purchaser riding to Hotasa's aid, be it Posibilitum or any other, pause while the administrators try and unravel the affairs. Hotasa may be a specific case, but who's to say what complexity might apply to other hotels or hotel groups and which might add to deterring prospective purchasers.
Outdated, unprofitable, underfunded, debt-ridden: the reasons why there are so few buyers for hotels and why the much-hoped-for conversions may yet never take place.
Any comments to andrew@thealcudiaguide.com please.
The Hotasa hotels, which include three in Can Picafort, are an extreme case, but they are far from alone in having owners seeking buyers. Much of Mallorca's hotel stock is up for sale. And there are very few buyers.
The accord between tourism minister Carlos Delgado and the hoteliers that should pave the way for reform of the tourism law and so facilitate hotel conversion and change of use has been sought by the hoteliers for some years. The antiquity of many hotels makes their redevelopment a pressing necessity, but even with agreement and legal reform, a question would remain. How would these conversions be funded?
Delgado has said that the days of expecting grants, especially from central government, have passed. The banks have all but turned the taps off. The markets are reassured by this summer's rise in tourism numbers, but the leading hotel chains - and those which would be listed and more attractive to investors - have tended to look overseas for growth potential.
The hype of all the talk of hotel renovations and changes of use and the unions getting hot under the collar and threatening protests as a consequence may therefore be just that - hype. Some hotels and hotel chains are in good enough shape to effect changes, but many are not.
One reason why owners want to sell hotels and why it is proving difficult to do so and would also prove difficult to convert them is because they are that old that the cost of conversion would be nigh on prohibitive. Buyers are unlikely to take on hotels that demand significant investment in addition to what are sales tags which are too high. Like with many restaurants or bars that are for sale, the expectations of owners are unrealistic, based on past or expected performance and divorced from the circumstances that now obtain.
Bellevue, though taken on by Posibilitum, is a case in point when it comes to old stock. The complex, all 1400 apartments of it, is nearly 40 years old. Its sheer size is a constraint on renovation as is its age, but renovation is badly needed. Bellevue has acquired a more diverse market over the past few years - it isn't the ultra-Brit complex it once was - but it tends to be hotels for the British market in the resorts of Alcúdia and Magalluf that are the oldest and which attract less profit because of the very nature of the particular market they cater for. Another reason, therefore, why prospective buyers might be wary.
A further reason is the complexity of financing arrangements and ownership issues. The travel and hotel group Orizonia had, still has as far as I am aware, a mortgage on Bellevue which was raised as a guarantee against a debt to the company run up by the previous owners, the now bust Grupo Marsans. And there is a similar story with Hotasa.
Bank funding requires security, and in the case of Hotasa, the house has well and truly been bet. The court bankruptcy proceedings relating to Nueva Rumasa have revealed the scale of the mortgages that hang over Hotasa. One hotel alone, Santa Fe in Can Picafort, has been used as a guarantee four times, to which can be added the embargo slapped on it by the Hacienda in respect of a debt of some 120,000 euros. In total, the seven Hotasa hotels in the Balearics have mortgages valued at just short of 138 million euros, three and a half times the size of the mortgage debt said to be owed to Orizonia.
The judge presiding over the proceedings has been obliged to appoint five administrators because of the sheer complexity of the hotels' affairs. The labyrinth of different companies in addition to the various mortgages would surely make a purchaser riding to Hotasa's aid, be it Posibilitum or any other, pause while the administrators try and unravel the affairs. Hotasa may be a specific case, but who's to say what complexity might apply to other hotels or hotel groups and which might add to deterring prospective purchasers.
Outdated, unprofitable, underfunded, debt-ridden: the reasons why there are so few buyers for hotels and why the much-hoped-for conversions may yet never take place.
Any comments to andrew@thealcudiaguide.com please.
Friday, July 01, 2011
Limited Appeal?: The Pollensa Music Festival
Better late than never. Used as one is to the tardiness with which fiesta and fair information is given out, the lateness with which that for this year's Pollensa Music Festival was officially announced takes some beating.
The music festival isn't like the fiestas. It is an international event, supposedly. It attracts international artists at any rate. And booking international artists and arranging for their appearance doesn't happen with the same minimal preparation as that required for, for example, fiesta "sardinadas" that occur every year, on the same day and with the same musical accompaniment.
The programme should have been released weeks ago. It finally emerged, on a scrappy PDF on Pollensa town hall's website on 29 June, three days before the first concert. No fanfare. Nothing. Not even a poster, and the website link still the same as that for 2010. To describe the pre-publicity as rubbish would be an insult to garbage the world over. It is very poor.
A mystery with the lateness with which the programme has been published is that it was already known. On 14 June, the line-up was announced on the website of a Spanish newspaper. It bears no difference to that which now appears on the town hall's website.
Yet, the day after the 29 June announcement, we learned that the programme had to be put together in a short period of three weeks. Given the previous press announcement, this doesn't quite chime, but to be fair the lateness of the official announcement may have more to do with finalising contracts rather than finding performers.
There are mitigating circumstances for the delay and for the reduction in the number of concerts. In 2009 there were twelve, last year there were eleven. This year there will be eight. (A later concert in September by the National Orchestra of Spain might yet be added.)
The circumstances are financial and political. As far as the latter is concerned, the previous Pollensa town hall administration is being blamed for having not done anything. But the funding of the festival is shrouded in some confusion. One report suggests that the budget is only 30,000 euros lower than 2010; previous ones had suggested it would be just over a half and that the primary cause of the shortfall was the non-receipt of a grant of 180,000 euros from the tourism ministry.
Whatever the financial or political reasons, the fact is that this year's festival, which did seem at one point to be in doubt, is the fiftieth. For such a celebration the organisation has, at best, been disappointing.
Despite the reduction in the number of concerts, quality, we are also told, has not been lost. While quality doesn't mean that you might have heard of the performers (and as one who is hardly a classical music aficionado, I haven't heard of most of them), there is none of previous years' quirkiness, insofar as you can describe Supertramp's Roger Hodgson or Spandau Ballet's Tony Hadley as quirky. Of this year's performers only the flamenco singer José Mercé registers with me.
Mercé and the Israeli singer Noa are identified as two acts with appeal to a wider public. Possibly so, but perhaps the fiftieth anniversary is a time to take stock and assess what the music festival should all be about. While the setting of the concerts in the cloister of Sant Domingo is unquestionably fine, the programme and the atmosphere of the festival are too elitist.
The festival is described as being the Balearics' most prestigious. But prestige doesn't necessarily mean appeal. What does it really do for Pollensa or for Mallorca? Does it, in itself, attract much tourism? No one has probably ever sought to find out. Carlos Delgado, the new tourism minister, has said the festival will continue to get support, but in Delgado we trust to take a good look at some sacred cows.
The festival would benefit from a broader programme, a sort of fringe if you like. There might also be sense in integrating it with what goes on in Sa Pobla at its jazz festival where genuinely international artists such as McCoy Tyner have appeared, and for free.
If the festival is so prestigious and if financing is such an issue, then why not find major sponsors? Thomas Cook can sponsor an Ironman triathlon in Alcúdia, so why not a sponsor of such size on board for the music festival? Despite the prestige, it isn't perhaps that interesting an event for sponsors. And you come back to the whole issue of tourism with a cultural bent. Sports tourism yes, but some stuffy concerts for a small minority?
Any comments to andrew@thealcudiaguide.com please.
The music festival isn't like the fiestas. It is an international event, supposedly. It attracts international artists at any rate. And booking international artists and arranging for their appearance doesn't happen with the same minimal preparation as that required for, for example, fiesta "sardinadas" that occur every year, on the same day and with the same musical accompaniment.
The programme should have been released weeks ago. It finally emerged, on a scrappy PDF on Pollensa town hall's website on 29 June, three days before the first concert. No fanfare. Nothing. Not even a poster, and the website link still the same as that for 2010. To describe the pre-publicity as rubbish would be an insult to garbage the world over. It is very poor.
A mystery with the lateness with which the programme has been published is that it was already known. On 14 June, the line-up was announced on the website of a Spanish newspaper. It bears no difference to that which now appears on the town hall's website.
Yet, the day after the 29 June announcement, we learned that the programme had to be put together in a short period of three weeks. Given the previous press announcement, this doesn't quite chime, but to be fair the lateness of the official announcement may have more to do with finalising contracts rather than finding performers.
There are mitigating circumstances for the delay and for the reduction in the number of concerts. In 2009 there were twelve, last year there were eleven. This year there will be eight. (A later concert in September by the National Orchestra of Spain might yet be added.)
The circumstances are financial and political. As far as the latter is concerned, the previous Pollensa town hall administration is being blamed for having not done anything. But the funding of the festival is shrouded in some confusion. One report suggests that the budget is only 30,000 euros lower than 2010; previous ones had suggested it would be just over a half and that the primary cause of the shortfall was the non-receipt of a grant of 180,000 euros from the tourism ministry.
Whatever the financial or political reasons, the fact is that this year's festival, which did seem at one point to be in doubt, is the fiftieth. For such a celebration the organisation has, at best, been disappointing.
Despite the reduction in the number of concerts, quality, we are also told, has not been lost. While quality doesn't mean that you might have heard of the performers (and as one who is hardly a classical music aficionado, I haven't heard of most of them), there is none of previous years' quirkiness, insofar as you can describe Supertramp's Roger Hodgson or Spandau Ballet's Tony Hadley as quirky. Of this year's performers only the flamenco singer José Mercé registers with me.
Mercé and the Israeli singer Noa are identified as two acts with appeal to a wider public. Possibly so, but perhaps the fiftieth anniversary is a time to take stock and assess what the music festival should all be about. While the setting of the concerts in the cloister of Sant Domingo is unquestionably fine, the programme and the atmosphere of the festival are too elitist.
The festival is described as being the Balearics' most prestigious. But prestige doesn't necessarily mean appeal. What does it really do for Pollensa or for Mallorca? Does it, in itself, attract much tourism? No one has probably ever sought to find out. Carlos Delgado, the new tourism minister, has said the festival will continue to get support, but in Delgado we trust to take a good look at some sacred cows.
The festival would benefit from a broader programme, a sort of fringe if you like. There might also be sense in integrating it with what goes on in Sa Pobla at its jazz festival where genuinely international artists such as McCoy Tyner have appeared, and for free.
If the festival is so prestigious and if financing is such an issue, then why not find major sponsors? Thomas Cook can sponsor an Ironman triathlon in Alcúdia, so why not a sponsor of such size on board for the music festival? Despite the prestige, it isn't perhaps that interesting an event for sponsors. And you come back to the whole issue of tourism with a cultural bent. Sports tourism yes, but some stuffy concerts for a small minority?
Any comments to andrew@thealcudiaguide.com please.
Friday, November 23, 2007
I’m A Political Man
Alcúdia’s mayor, Miquel Ferrer, may have moved a step closer to becoming the new leader of the Unió Mallorquina (UM), the nationalist party whose exiting leader is now president of the Balearic parliament. Until quite recently, it had looked as though Miquel Nadal (from Palma) would be that new leader (as noted on 13 November: Part Of The Union), but he has picked up his ball and withdrawn from the succession race - for now at least - citing dirty tricks on behalf of his two main rivals, Ferrer and Guillem Ginard of Campos. No matter where it is, a familiar story of political in-fighting.
Ferrer denies that there is a split between Palma and the rest of the island in the context of this political battle, but - retaining some caution ahead of the final decision perhaps - he has stated that his “obligation is to Alcúdia”, whatever that might mean. I don’t know Ferrer personally, but I have seen him often enough. I have said before that a strength of the local nature of Mallorcan and Spanish politics is that the mayor is visible. Inevitably, there are those who don’t have a good word for him, both in the town and elsewhere; a commentator in “Ultima Hora” describes him as a “born conspirator”. Perhaps so, but how many politicans are not.
This statement of obligation does though hint at the existence of a Palma/rest of island divide, and it reflects a facet of Mallorcan society that many visitors would be unaware of. It is hardly surprising that the island’s and indeed the Balearics’ main city should be a focus, but there are often rumblings about Palma-centricity at the expense of other parts of the island, and it is not Palma alone, as the perception is one of Palma and its rich neighbour Calvia (Magaluf, Santa Ponsa etc.) versus the rest.
Whatever the truth of the political intrigue, I quite hope that he does secure the leadership; and then let’s see the strength of his obligation.
Meantime, Ferrer has a diversion in the redevelopment of the old power station (27 October: Here I Dreamt I Was An Architect). It is a not insignificant diversion; a diversion of some 21 million euros in fact, the level of financing needed to bring it into being as an arts and science museum. Am I alone in finding it slightly odd that the architect pitch process has been undertaken and completed without financing of some sort in place?
Another local difficulty limps on - the Son Bosc golf course project in Muro next to Albufera (26 October: And They’re Messing With My Heart). A technical report argues against the licence to develop the golf course as the bulk of it would fall within a protected area. Seems pretty clear then. But there are local politicians who want to go ahead; the UM locally supporting it (which is quite intriguing as one would assume the nationalists would be against). The ongoing debate about Son Bosc does raise an issue of wider consequence. Golf is one of those things that has been promoted as a future tourist winner for the island (winter tourism and all). Other parts of the island have been declared no-go areas for golf courses, and one suspects that further mooted projects would run into similar objections. The Son Bosc case is quite important as it highlights the tension between environmental concern and economic development, which is perhaps the greatest issue facing Mallorca.
QUIZ
Yesterday - Chris Isaak. Blue? Puerto Azul - azul is blue. Today’s title - line from a song by? Famous blues group of the ‘60s.
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
Ferrer denies that there is a split between Palma and the rest of the island in the context of this political battle, but - retaining some caution ahead of the final decision perhaps - he has stated that his “obligation is to Alcúdia”, whatever that might mean. I don’t know Ferrer personally, but I have seen him often enough. I have said before that a strength of the local nature of Mallorcan and Spanish politics is that the mayor is visible. Inevitably, there are those who don’t have a good word for him, both in the town and elsewhere; a commentator in “Ultima Hora” describes him as a “born conspirator”. Perhaps so, but how many politicans are not.
This statement of obligation does though hint at the existence of a Palma/rest of island divide, and it reflects a facet of Mallorcan society that many visitors would be unaware of. It is hardly surprising that the island’s and indeed the Balearics’ main city should be a focus, but there are often rumblings about Palma-centricity at the expense of other parts of the island, and it is not Palma alone, as the perception is one of Palma and its rich neighbour Calvia (Magaluf, Santa Ponsa etc.) versus the rest.
Whatever the truth of the political intrigue, I quite hope that he does secure the leadership; and then let’s see the strength of his obligation.
Meantime, Ferrer has a diversion in the redevelopment of the old power station (27 October: Here I Dreamt I Was An Architect). It is a not insignificant diversion; a diversion of some 21 million euros in fact, the level of financing needed to bring it into being as an arts and science museum. Am I alone in finding it slightly odd that the architect pitch process has been undertaken and completed without financing of some sort in place?
Another local difficulty limps on - the Son Bosc golf course project in Muro next to Albufera (26 October: And They’re Messing With My Heart). A technical report argues against the licence to develop the golf course as the bulk of it would fall within a protected area. Seems pretty clear then. But there are local politicians who want to go ahead; the UM locally supporting it (which is quite intriguing as one would assume the nationalists would be against). The ongoing debate about Son Bosc does raise an issue of wider consequence. Golf is one of those things that has been promoted as a future tourist winner for the island (winter tourism and all). Other parts of the island have been declared no-go areas for golf courses, and one suspects that further mooted projects would run into similar objections. The Son Bosc case is quite important as it highlights the tension between environmental concern and economic development, which is perhaps the greatest issue facing Mallorca.
QUIZ
Yesterday - Chris Isaak. Blue? Puerto Azul - azul is blue. Today’s title - line from a song by? Famous blues group of the ‘60s.
(PLEASE REPLY TO andrew@thealcudiaguide.com AND NOT VIA THE COMMENTS THINGY HERE.)
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