Monday, July 6, 2015

When will Germany realize it can't kick Greece out of the Euro?

It's funny how German has been acting all godfather-like, saying effectively, pity if your country got kicked out of the Euro. At some point the Germans will have to realize that this is in fact a totally empty threat that would require the Greeks to voluntarily leave.

Anything crazy the EU might want to do can't work since it would require unanimous consent, which Greece would obviously reject.

The main shit-hits-the-fan moment will come if the Greek government decides to take control of the Greek Central Bank. The Greek Central Bank (like all European central banks) is supposed to be "independent", and effectively be under the control of the European Central Bank.

However, as much as the ECB would like, Hungary has already shown that it can take control of their central bank when the president of Hungary sacked the board of the Hungarian Central Bank and replaced everyone with his own supporters. The ECB had a conniption and has spent the last 3 years sending strongly worded letters it Hungary, which has basically told the ECB to fuck off. Nothing has happened, and the economy of Hungary has done pretty well, and the move by the president to force all Swiss-franc mortgages to be re-denominated in local currency is fucking genius in hindsight.

The nuclear option for the Greek government at this point would be to replace the board of the Greek Central Bank and start printing Euros. The Greek government actually has a pretty strong case that the Greek government debt isn't really that much more unsustainable than any other of the highly indebted European countries, under even relatively unoptimistic growth assumptions, and that the ECB cutting off Greece is a violation of the duties of the ECB.

Germany is about to learn the hard way that once the veneer of civilization is removed, debt collection only works at the point of a gun. At the end of the day, people pay their taxes and debts they know that at some point, if you keep ignoring all the warnings, someone with a gun will come and take your stuff. If people realize that the worst they'll get is a strongly worded letter, it doesn't take a genius to figure out what will happen.

Monday, June 29, 2015

So much for a Greek-exit firewall

European stocks are set to drop about 2.5% this morning. With a total capitalization of about 11 trillion dollars, this represents a paper loss of about 275 billion dollars in the European stock market alone.

The biggest cost to the rest of Europe is going to be a break of faith in the European governance and leadership. The fact that they would actually let the entire economy of a member of the EU crash and burn over a relatively minor issue of economic philosophy (whether is better to cut a measly 1 billion in spending or raise taxes by the same amount) shows an amazing lack of responsibility and solidarity.

This will probably go down in history the world’s costliest game of chicken gone wrong…

Sunday, June 28, 2015

Reality of the Cuban Medical System

We have a relative living in Cuba who has recently become very ill, and we’ve been absolutely shocked at the care she has been getting. When Michael Moore praises the Cuban medical system, he really had no fucking clue as to the kind of care normal Cubans actually get.

Cuba has one health care system for foreigners and a very different one for Cuban citizens. Cuba has a “health export” industry for foreigners and diplomats, with a modern hospital that provides world class medical care at very low prices.

However, Cuban citizens (this includes even people who have gotten citizenship in other countries… the government will consider you Cuban if it says Havana for your place of birth) are absolutely banned from using these facilities (even if they had the money to pay).

The “hospital” our relative is in has a room for about 50 women, no running water (the relatives of patients need to bring buckets), no sheets (provided by relatives), and obviously no air conditioning since they only sometimes have electricity. There’s no detergent, so the relatives have to wash the sheets with salt.

Needless to say, she is doing very badly and it doesn’t look like there’s anything we can do to help.

Friday, June 26, 2015

Mono-lingual Catalan education in Catalonia

Here’s a good article summarizing why it sucks to be a student from a Spanish speaking family in Catalonia. Not only are the parents isolated from being involved in the school (100% of communications are in Catalan), but children are even being given bad grades for speaking Spanish on the playground. Adjusting for socio-economic status, kids from Spanish speaking family do significantly worse in school than their Catalan speaking peers.

Even for kids from Catalan families, their level of Spanish is so pathetically bad that they are basically unemployable anywhere else in Spain. Don’t even get me started on “oh but they learn Spanish from watching TV”.

Thursday, June 25, 2015

Foreign tax credit on your Spanish taxes

If you do your taxes using PADRE, you have to be careful about withheld taxes paid outside of Spain. For Spanish source income ONLY, you put the amount withheld next to the income and all is good.

For non-Spanish income, you don’t do this! Very bad if you do.

What you do instead, is pull out an Excel and calculate your total foreign income, and then the taxes you had withheld on this income. To make the calculation even more fun, you have to exclude any taxes on income that was exempt from Spanish taxes (eg the first 1500 of dividends).

The program gives you no help whatsoever in figuring this, and you put the result in box 583.

Tuesday, June 23, 2015

Bye bye Sant Cugat

So we decided to move another part of Spain. Fundamentally we realized that it made more sense for our kids to grow up closer to their family, and Barcelona was just too far away.

Regarding Catalan: thank God I didn’t make any effort to learn it. What waste of time for the kids though. Wish the kids had spent their time learning an actually useful language like German or Chinese.

Fundamentally, I don’t believe that a majority cultural group should have the right to force its culture and language on fellow citizens. Culture is something that should be voluntary and come from the people, not imposed by the government. What makes it even more ridiculous in Catalonia is that the canon of Catalan culture is basically a Romantic re-invention of a medieval culture that never really existed.

I’m happy I don’t need to waste any more energy with this whole stupidity, and don’t even get me started on independence.

Anyway, I look forward to getting my school communications in Spanish. Last year the principal gave the introduction speech in Catalan, despite claiming to be an international school. Apparently a bunch of Catalan parents thought it would be unbearable to listen to the speech in Spanish, and would rather have the international parents not understand a word.

I also look forward to a much lower cost of living. I’ll make sure to point out to all my Catalan friends that my autonomous region is most grateful for Catalonia's fiscal contribution.

Don’t get me wrong, I don’t feel bitter. We had a fun seven years. I just feel relieved that I won’t need to worry about this stuff anymore.

Tuesday, June 16, 2015

Cute dogs and easy good PR

Something that the Spanish government doesn’t seem to have learned is that saving dogs (especially cute fluffy ones) is excellent PR. It doesn’t cost much money and make people think that you are a caring politician. After the fiasco with Excalibur, you’d think they would have figured that one out.

By the way, in case you were wondering, this is how you do it.