Spain wants to tear up the Treaty of Utrecht and take back Gibraltar from Britain

Posted by PITHOCRATES - August 11th, 2013

Week in Review

8/14/2013 CORRECTION:  There were factual errors/omissions in this piece.  We apologize for them.  And we apologize to the good people of Spain if we have offended them.  But it should be noted that some of the corrections are from quotes pulled from the sourced Mirror article.  A British newspaper.

The point of the piece is a recurring theme in history.  There are rarely any innocents when it comes to international disputes.  That was the point of the French and the Spanish helping the Americans during the Revolutionary War.  They did this not for American interests but for their own interests.

We also will note that the world’s power center shifted from the Mediterranean to the great sea powers of Europe.  Because these great European powers advanced seafaring to the point that they were first to conquer the oceans.  Also, the man that discovered America (Christopher Columbus) was sailing for Spain.  During the time of the Age of Discovery.  Where Spain dominated that discovery.  And Spain was home to the School of Salamanca.  Where the seeds of the Renaissance and the Enlightenment were sown.  And they would bear their greatest fruit in the late 18th century.  Thanks to America’s Founding Fathers being students of the Enlightenment.  So Spain has a formidable place in world history.  One that we admire and greatly respect.

A reader from Madrid sent in a well-written and very respectful criticism.  We include it here in its entirety.

Dear Pithocrates, I have read your paper on Gibraltar which is rather accurate but there are some missing points which are very relevant to understand the roots of the issue. These points are as follows:

a) It is true that the Spanish captured Gibraltar from the moors in 1462, but you shouldn´t omit that the moors captured it previously from the visigotic kingdom of Spain in 711.

b) You state that “Gibraltar was captured in turn by the Royal Navy in 1704”, but you omit that it was in the context of a Spanish dynastic sucesion war and this capture was in the name of one of aspirants to the Spanish crown, supported by British and Dutchs.

c) The Treaty of Utrecht didn´t handed over the surrounding waters and the istmus where the airstrip lies. The istmus was a neutral zone wich was taken by the British in XIX century by asking quarantine land due an epidemy in Gibraltar. It doesn´t seem fair play. This is the key point for Spain since Gibraltar has no waters to drop blocks in and the airport is out of Gibraltar territory.

I fully agree that we can´t go back to the first wrong but your statement that Spain wants to tear up the treaty is far from reality.  In essence Spain wants the British to meet the treaty in full since is not an acceptable behave to throw concrete blocks in non British waters nor contaminate them with chopy bunkering practice,. If you study the history of Spain, you will learn that some part of it was outstanding, glorious and brilliant and some not, but ALWAYS we have been people of honour and we honoured the treaties we signed off.

Finally I believe that in XXI the gunboat policy is out of place, but in any case it is clear that Spain was not the first to put the navy in this conflict.

I would be very grateful if you share these lines with your readers in order to clarify the situation. Spaniards and British have had a long common history. We have been rivals for centuries and in the past we fought very often each other and sometimes were allies. We have in Gibraltar a common “heritage” and we should be intelligent enough not to make it a wedge but a hinge between us.

Best, regards,
[name withheld by Pithocrates to protect writer’s privacy]
Madrid (Spain)

PD: In addition there is a little geographical mistake in your text: none of the sides of Gibraltar is on the Atlantic ocean, both are in the Med (Mediterranean sea is considered eastward Tarifa).

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Do you know what you will find at the southern tip of Spain?  Britain.  That’s right.  Gibraltar belongs to Britain.  Something Spain isn’t all that happy about.  Kind of how Argentina isn’t all that happy about Britain being in the Falkland Islands.  And both Argentina and Spain try to make life difficult for the British living in these British possessions (see Gibraltar: Britain to send Navy warships to Mediterranean in show of force to Spain by James Lyons posted 8/9/2013 on the Mirror).

Britain is sending warships to Gibraltar after David Cameron failed in his attempt to end the diplomatic row with Spain…

The 10-vessel Med visit follows weeks of rising diplomatic tension as the Madrid government holds up traffic at the border in retaliation for Gibraltar’s efforts to stop Spanish trawlers plundering fish stocks…

The PM, in a phone call to his Spanish counterpart Mariano Rajoy, issued a coded warning of legal action over the border checks and the threat to impose a £43 crossing fee.

But the checks still happened today and the Spanish hit back by criticising the Gibraltar government for making an artificial reef to protect fish stocks.

Under the seas surrounding the Falkland Islands are oil and gas deposits.  In the waters around Gibraltar it’s fish stocks.  So there are economic reasons.  But what really irks Spain is that unlike the cold and windy Falkland Islands Gibraltar is a sunny vacation paradise.  And you don’t need a boat or a plane to get there from Spain.  All you have to do is drive there.  And cross an active runway.  Yes, the road through Gibraltar actually crosses an active runway.  Why, you may ask, doesn’t the road go around the runway?  Well, the thing is, Gibraltar is so narrow that one end of the runway ends at the waters of the Atlantic Ocean.  While the other ends at the water of the Mediterranean Sea.

Gibraltar is an outpost of Britishness at the mouth of the Mediterranean, and has been for 300 years.

The 2.3 square miles land mass, dominated by the 1,300-foot limestone Rock of Gibraltar, is one of the last remaining parts of the empire…

The 30,000 inhabitants of the British Overseas Territory cling to their UK roots.

Sterling currency, red post boxes, familiar British shops and banks and the use of the English language are all legacies of the Rock’s long association with Britain…

The results of several referendums in Gibraltar over the years, the most recent in 2002, have been overwhelmingly in favour of remaining linked to Britain.

So it’s only a small sliver of land.  And the people who live there are British.  And want to remain British.  As it is in the Falklands.  Referendum after referendum is always the same.  These British people want to remain British.  It makes one wonder what would happen to them if Spain and Argentina got their way.  Would they deport them?  Segregate them?  Or simply make them stop being British?

So how did it come to this?  How did a tip of Spain become British?

Captured from the Moors by the Spanish in 1462, Gibraltar was captured in turn by the Royal Navy in 1704.

Nine years later it was officially handed over to Britain in the Treaty of Utrecht, and it has remained in British hands ever since.

It is this treaty which is at the heart of Spain’s claim to the land.

The Rock was ceded to Britain “to be held and enjoyed absolutely, with all manner of right for ever, without any exception or impediment whatsoever”.

But successive Spanish governments have argued that this is an anachronism and that Spain’s territorial integrity justifies the return of Gibraltar to Spanish control.

Critics of Spain’s attitude towards Gibraltar have pointed out that it has its own city enclaves, Ceuta and Melilla, on the north African coast, bordering Morocco.

Despite repeated demands by Morocco that the cities should be returned to its territory, Spain refuses to do so.

Interestingly, the Spanish took the land from someone else.  The Moors.  So the British didn’t do anything the Spanish didn’t do.  They got the land by military conquest.  Then made it permanent by treaty.  A treaty they say now is silly to maintain.  Because Gibraltar is attached to the Spanish mainland and logically belongs to them.  While they themselves are holding on to lands that by their logic belong to Morocco.

The Spanish Empire once stretched throughout the world.  But it was overtaken by the British Empire.  Whose representative government and capitalism vaulted the British into the number one world power.  While the Spanish Empire declined the British Empire only grew stronger.  France, too, lost bits of her empire to the British.  Which is why the French aided the Americans in the American Revolutionary War.  And why the Spanish joined that conflict by allying themselves with the French against the British.  Neither of them cared about helping the Americans.  They went to war against the British when they were preoccupied with the Americans to reclaim their lost pieces of empire.  And hoped to limit the Americans’ expansion into North America by the treaty that would end the war.  A treaty that would undo the Treaty of Utrecht.  And allow further expansion of France and Spain into North America.

How far back do you go to right past wrongs?  Should Spain return their land to the Moors?  Should they take back Mexico and return it to the Aztecs?  Do you go back to the first wrong?  Which would be difficult without a historical record going back to the first wrong.  So do you go back just far enough?  And if so who determines how far that is?

No.  You can’t do this.  All you can do is honor the treaties you have now.  Treaties that were signed willingly by all parties concerned.  Yes, some parties were negotiating from a position of weakness.  But that’s war.  In hindsight Napoleon would much rather have signed a treaty before losing at Waterloo.  Just as Hitler would have, in hindsight, preferred to sign peace treaties with all combatants before his invasion of the Soviet Union.  But when you wage war and lose you have little choice but to negotiate from a position of weakness.  And because the British bested the Spanish in battle Gibraltar belongs to Britain.  Just as the Spanish would be holding on to Cornwall in England if the roles were reversed.

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Debt Crises in Ireland, Greece, Portugal and now Spain may Prove too much for the Euro to Survive

Posted by PITHOCRATES - June 3rd, 2012

Week in Review

The woods are lovely, dark and deep.  But I have promises to keep.  And miles to go before I sleep.  And miles to go before I sleep.  Lines from a poem by Robert Frost.  For some reason this came to me as I read about the never-ending crisis that is the sovereign debt crisis in Europe.  And the Eurozone.  For the Euro is lost in those dark and lovely woods.  Woods that are so deep that it will never find its way out.  And the only kind of sleep the Euro is going to get is the kind you don’t wake up from (see Britons face £5bn bill to help out Spanish as fears grow that Madrid will have to ask IMF for €300billion bailout by Hugo Duncan And James Salmon posted 6/1/2012 on the Daily Mail).

British taxpayers could be forced to stump up another £5billion to rescue Spain as the crisis in the eurozone spirals out of control.

Fears are mounting that Madrid will have to ask for an emergency bailout of up to £300billion as it struggles to prop up its basket-case banks.

A third of that money could come from the International Monetary Fund – including around £5billion from the UK, even though Britain is not in the eurozone.

UK taxpayers have already coughed up £12.5billion to rescue debt-ridden Greece, Ireland and Portugal…

But growing doubts over how the Spanish government will finance the £15billion needed to rescue Bankia, one of its biggest lenders, have raised fears that it will follow Ireland, Greece and Portugal in requiring a bailout from Europe and the IMF.

This week US investment bank JP Morgan warned a joint rescue of Spain could cost around £300billion.

The Spanish banking system has been crippled by nearly £150billion in toxic property loans.

At the heart of the sovereign debt crisis in Europe is debt.  They have way too much of it.  So much that the odds are not good that they will ever be able to repay it.  Which makes people very reluctant to loan them any more money.  It’s like loaning a friend money who already owes you a lot of money.  Do you loan him more money?  It just may help him turn his life around.  Start anew with a new job.  Earning enough money to support himself and pay you back.  That’s one possibility.  Then there’s the possibility he may just blow the money on booze, drugs and women.  You know he’s just going to spend whatever else you loan him.  And not pay any of it back.  So it would be rather foolish to loan him more money.

This is the decision facing the people who could attempt to bail out those in the Eurozone.  They’ve already loaned them a lot of money.  So these in-trouble countries can sustain the government spending their current tax revenue can’t support.  But the deal was to cut back that spending so they can live on what their tax revenue CAN support.  But there’s only one problem.  The people of these countries reject calls for them to live within their means.  And have had enough of austerity.  And that’s a big problem.  Because if they don’t live within their means they will perpetuate the sovereign debt crisis.  As they will always need to borrow more money to pay for the things that their tax revenue can’t afford.  Until the day this house of cards collapses.  And the longer it goes on the more money people will lose in bad loans to these in-trouble countries.

The central problem in this crisis are bad loans.  Caused by the easy credit policies of central banks to loan money to anyone so they can buy a house.  All this easy credit caused housing booms in countries all around the world.  And housing bubbles.  Then the bubbles burst.  Leaving countries with debt crises as toxic mortgages weakened banking systems everywhere.  And still Keynesian economists are urging central banks to repeat this reckless lending behavior again to stimulate economies.  And to bail out the Eurozone.  The problem is that the central banks have so destroyed their economies no one is borrowing money.  Or spending money.  Because no one thinks the worst has passed.  And businesses and private citizens have learned the lesson from the great debt crisis we’re going through everywhere.  Too much debt is a bad thing.  And are refusing to take on new debt.  And using what income they have to pay down existing debt.  Contrary to all Keynesian doctrine.  For they want reckless and irresponsible spending.  Because they believe only spending is good.

Politicians and central bankers said the situation in the eurozone was unsustainable and drastic action was needed to prevent the ‘disintegration’ of the single currency.

They spoke out as European leaders scrambled to stop the financial crisis in Spain spiralling out of control and infecting other countries such as Italy…

Mario Draghi, president of the European Central Bank, said the eurozone was unsustainable in its current form.

In his sharpest criticism yet of eurozone leaders’ handling of the crisis, he said the European Central Bank could not ‘fill the vacuum’ left by governments in terms of economic growth or structural reforms.

So, no, more easy credit isn’t the solution.  Countries must live within their means.  Which means adopting austerity measures.  And find ways to achieve real economic growth.  Not the kind that leads to bubbles.  Or sovereign debt crises.  And the best way to generate real economic growth is with tax cuts.  Cutting spending as needed so they spend only what their tax revenue can afford.  They must stop running deficits.  And stop borrowing money.  (Good advice for the United States as well).  As the private sector economy picks up because of a more business-friendly tax structure they will create jobs.  So all of those government workers who lost their jobs in the public sector can get new jobs in the private sector.  Whose salaries and benefits will not have to be paid for by more government borrowing.  If they adopt pro-growth policies like this the international community may still be able to help them.  And save the Euro.  But will they?  With all of that public opinion against any more austerity?  Don’t know.  Probably not. 

It’s unlikely that the Euro will ever find its way out of the woods.  For these woods are scary, dark and deep. 

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Court orders Spanish Doctor to pay Child Care after Botched Abortion allows Baby to be Born

Posted by PITHOCRATES - May 26th, 2012

Week in Review

An interesting court case in Spain places the responsibility of a child not on the parents who conceived the child.  But on the doctor who failed to abort the child.  Odd.  For in the birth of that child the doctor is only an accessory after the fact of coitus (see Spanish doctor ordered to pay for upkeep of child after failed abortion by Giles Tremlett posted 5/25/2012 on The Guardian).

A Spanish doctor has been ordered to pay for the upkeep of a child after a failed abortion operation meant the boy’s mother was obliged to see her pregnancy through to the end…

The boy was born in October 2010, six months after his mother had gone for an abortion at the city’s Emece clinic. The operation had been performed when the mother was almost seven weeks pregnant. The doctor told her two weeks later that a scan proved she was no longer pregnant…

She did not return to the clinic for three months, and only after becoming convinced she must have become pregnant by mistake once more.

A fresh scan revealed, however, that this was the same pregnancy. She was already into her sixth month and past the 22-week limit for abortions in Spain. “I sought advice and was told that it would be a crime to abort at that stage,” she said.

The woman, who had hidden her pregnancy from her family out of fear at their reaction, was forced to confront her parents with the news. She and the child now live with them. Despite the fact that a suction technique had been used to try to remove the embryo, the boy was born healthy.

The mother sued the doctor for damages, with the court awarding her €150,000 (£120,000). It also decided the doctor and his insurer should pay maintenance of €978 a month for 25 years, or a further €293,000.

“I am living off my parents now, and it shouldn’t be like that,” the mother said…

“I am OK now, because I have had to accept things. There is no other option. I’m happy with my son,” she said. “When I have to explain all this to him, I’ll try to make sure that he feels OK about it. It was back then that he was not wanted, not now.”

I have one question.  Where’s the father?  Why isn’t he paying child support for his child?  I can understand the penalty for the botched abortion but child support?  The doctor didn’t make that baby.  He only failed to abort it.

Okay to abort within 22 weeks.  But a crime to abort after 22 weeks.  Okay at 5 months.  But not at 6 months.  Makes you scratch your head and think about the argument over when life begins.  At conception?  Or after 22 weeks.  Sounds rather arbitrary, 22 weeks.  Especially when you can hear a heartbeat at 8 weeks.

You hear some people joke about not being a planned baby.  About being an accident.  I imagine if one thinks about that too much it could make one question one’s purpose in life.  And question how much of an unwanted burden one was on one’s parents.  But surviving an abortion?  I don’t think that’s something a person should ever learn.  What possible good could come from that?  If mother and child bond and grow up loving each other why take a chance on ruining that?  It’s bad enough the mother has to live with this memory.  The child doesn’t.  In time perhaps the mother will feel it unnecessary to explain this unpleasant fact about his prenatal life.

But once again, where’s the father?

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Spain is Taking Center Stage in the Eurozone Crisis

Posted by PITHOCRATES - May 5th, 2012

Week in Review

To be a generous welfare state requires one of two things.  Either a population making babies like bunnies.  To keep the base of the pyramid of the welfare state expanding greater than the top.  Or a booming economy that showers money onto the treasury.  If you have neither than you better have good credit (see Spanish borrowing costs to jump at auction, bank buying eyed by Paul Day posted 5/3/2012 on Reuters).

Spain has jumped to the forefront of the euro zone debt crisis due to concern over its public deficit and shrinking economy and pressure is growing for a plan to recapitalize its banks, which are burdened with bad debts from a property market crash…

Spanish banks, virtually cut out of wholesale debt markets after losing billions since a decade-long property bubble burst in 2008, snapped up cash the European Central Bank pumped into the euro zone banking system in December and February, in operations totaling more than a trillion euros.

Recent data from the Bank of Spain suggests that they used a portion of the ECB’s ultra-cheap three-year money to buy up high-yielding sovereign debt.

According to the central bank, Spanish lenders held just over 13 percent of domestic debt in November 2011, but that total soared to almost 30 percent by March. Non-residents held almost 56 percent of all Spanish debt in November, but by March, that proportion had fallen to 38.8 percent.

Spain has neither a population boom nor an economic boom.  Nor is her credit looking all that good.  Which does not bode well for the Eurozone. 

Too many countries look to the housing market as the panacea for all that ills an economy.  Keep money cheap to borrow.  To encourage people to borrow.  So they can borrow.  And buy overvalued houses.  This is the kind of government Keynesian tinkering that never ends well.  And there are so many examples in history you’d think we’d have learned this lesson by now.  Japan, Ireland, Spain and the United States.  And now even China is growing a little housing bubble of their own.  Bubbles are not good.  They are artificial economic growth.  And they always pop.  Just ask our good friends in Japan, Ireland, Spain and the United States.

And when those bubbles pop recessions set in.  To correct all of those overvalued prices.  There’s deflation.  Old debt that becomes impossible to repay.  So banks fail.  Just because government Keynesians had to tinker.  Playing with interest rates.  To keep them below what the market would have them.  It was good on the upside.  Great new government spending and benefits.  Which have to go away on the downside.  Because there isn’t the robust economic activity to pay for it.  Even the interest on the debt becomes difficult to pay.  And because all of this is in play no one wants to buy their sovereign debt anymore.  Which raises the interest they must pay on new debt to retire old debt.  And the vicious cycle just continues.

Trying to fix the debt problem is looking at a system and not the disease.  The disease is the welfare state.  And until they cut that spending the debt problem will never go away.

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Faced with Unpleasant Austerity Spain follows Greece’s Lead and Riots in the Streets

Posted by PITHOCRATES - March 31st, 2012

Week in Review

The Eurozone is suffering the consequences of their social democracies.  Their cradle-to-the-grave welfare state.  And huge governments full of government jobs.  Paying nice salaries and benefits.  Greece is on the brink of bankruptcy because of their out of control spending.  And when they try to rein in that spending the people take to the streets in violent protest.  Making it very hard for the government to take back some of the free stuff they’ve been giving out to buy their votes.  And making it ever harder to avoid bankruptcy.  Now it’s Spain’s turn (see Spain Unions On Strike Over Austerity Plans by Robert Nisbet posted 3/30/2012 on Sky News).

Scores of Spanish workers have been arrested after protesting on a day of anger over a swingeing austerity drive and changes to labour laws…

In scenes reminiscent of anti-austerity demonstrations in Greece, tens of thousands held protest marches in Madrid and other cities…

There is widespread anger at moves by Prime Minister Mariano Rajoy’s conservative government – which is not yet 100 days old – to slash Spain’s debt and boost the economy.

Spain’s biggest unions called the 24-hour strike over labour reforms which make it cheaper and easier for companies to lay people off and cut wages without consultation.

The government claims they are needed to tackle the 22.85% jobless rate, which is predicted to rise to almost 24.3% this year…

The government is under pressure to reduce its budget deficit, which last year ballooned to 8.51% of all the goods and services produced by Spain.

The European Union says this must be reduced to 5.3% this year and 3% in 2013 but economists warn that growth in Spain is so sluggish and debt so high, it will be a tough deadline to meet.

There is good reason for nervousness in the Eurozone. Unlike Greece and Portugal, Spain is deemed too big to bail and British banks are also heavily exposed to Spanish debt.

With unemployment running at 50% among young Spaniards and, as a member of the Eurozone, no monetary levers to pull, the government in Madrid says it has little choice but to wield the axe once again.

Peak unemployment in the U.S. during the Great Depression was about 25%.  So Spain is enduring Great Depression unemployment.  That’s bad.  What’s worse is that those who can be the most violent in their discontent, the young, suffer from 50% unemployment.  Filling them with discontent.  And a lot of free time on their hands.  Never a good combination.

If Spain has a high budget deficit it can only mean one of two things.  Either their government is spending too much.  Or their economy cannot generate sufficient tax revenue from their tax structure.  Either taxes aren’t high enough.  Or taxes are too high and they dampen economic activity thus reducing tax revenue.  With those high unemployment numbers, though, the smart money is on ‘they’re spending too much’.  Both the government.  And the employers.  Where the unions are holding the cost of labor (wages and benefits) so high that it’s too costly to hire more employees.  Whereas if the market set wages and benefits these costs would come down to reflect that large surplus of labor out there.  And the people who want jobs could get jobs.

The problem with these social democracies is that they are anti-business.  They favor the public sector over the private sector.  But you can’t keep beating up on the private sector.  Because they pay the taxes that fund the public sector.  A lot of that unemployment no doubt are government workers they let go to meet their Eurozone requirements.  And there are probably a lot more to follow.  If they reduce the cost of labor in the private sector the private sector will be able to absorb these people.  And as the private sector grows and becomes more productive more people will be paying taxes.  And they will be able to bring down those massive budget deficits. 

But if they don’t bring down labor costs or cut government spending, hello Greece.  Which they are currently experiencing in the streets of Spain.  Which, incidentally, is the path the U.S. is currently on.

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