Mrs Emini-Watch and I are back in Biarritz, France. With a brief stay in Spain on our way from Australia.
Apart from the odd shoe shopping trip to San Sebastian (just across the border from France) we’ve not been in Spain since December 2010.
So what has changed?
Well, here are some (random) impressions. We were at a wedding, a rather nice one, with people from Hong Kong, Singapore, Australia, Germany, UK, Scotland and the US. So these impressions are collected from our fellow wedding-goers.
BTW, if you’re thinking of a wow wedding location, put this place on your list. Cap Rocat (pictured left) is a former military fortress on the island of Mallorca turned into a luxury 22-room hotel.
1. The Europeans love the Euro
Breaking up the Euro will be virtually impossible. Everyone loves it. Nobody harks back to the good ol’ days of the Deutsch Mark or the Peseta or the Drachma. They are soooo in the distant past.
The Euro has one huge advantage: convenience.
No more changing money at the border. No more being left with a pocket full of (useless) change after a weekend trip to Vienna. No more mental arithmetic to figure out how much that coffee in Madrid cost compared to home.
And the Europeans with spare cash are travelling, more and more. EasyJet, AirBerlin, AirEuropa, etc. have made long weekend trips across Europe a reality. The economy might be down but the airports are far from empty.
2. The Germans and Russians are the only ones spending
This one is a real head trip. Back in 2000 the Germans were being berated by the rest of Europe for being slow to liberalise their labour market and financial sector. They seemed to miss out on the way up.
Well now we’re post-crisis and on the way down, the Germans are the ones with the cash to spend. The inflexible German labour markets have given German workers a sense of security – safe from unemployment and safe from wage cuts.
And a non-deregulated financial sector has stopped rampant mortgage growth and negative equity as house prices correct. Remember German home ownership is the lowest of all developed countries – half that of Ireland, Italy and Greece.
Mrs Emini-Watch and I first noticed the growth in Russian tourists in Egypt back in 2007. It’s kept on growing. Russia was hit by the financial crisis but there seems to be renewed confidence. The capitalist fire is just getting going in Russia – whereas you get the impression that in Spain it’s kind of gone out.
And now we’re in Biarritz, France, the locals are complaining about all the Russians around. A totally new phenomenon. They complain they’re rude – but they’re spending up big! Apparently the beautiful Hotel du Palais is fully booked with Russians. How the wheel turns.
3. The average German thinks Greece should go
That is, drop the Euro and go back to the Drachma. The Greeks just clearly play by a totally different set of rules – or ignore the rules entirely. After all, they sleep all afternoon and retire at 50. Why should the Germans work all day and retire at 65 – only to pick up the tab for Greece?
No, the Greeks have just gone too far.
But what about Italy and Spain and Portugal and France. The average German says “No, they’re OK. They’re like us. It’s the lazy Greeks who must go.”
Of course the differences in productivity rates and value-added industries across Europe is huge. It was just a matter of time before these imbalances stretched too far and broke – causing the Euro crisis. Greece was just the first to hit the wall.
Wait another 10 years and the others will follow. Even Italy and France. They just can’t compete with Germany. Unless of course you harmonize all the retirement ages, pension plans, social security benefits, working hours, etc. etc.
Won’t happen. Nah, Greece might go – but it won’t be the last.
4. The average Asian thinks the Spaniards are lazy
Our friends from frenetic Hong Kong and Singapore looked around Spain and said “Why are all the coffee shops full? Don’t these people have jobs to go to?”
Frankly, I was surprised they were surprised. This is Spain after all – the Spaniards have got their own (what shall we call it?) rhythm.
But it’s true. Mallorca was busy with tourists – and according to the locals one of only two places in Spain that has jobs and weathered the downturn. But the rest of Spain seemed very quiet.
No line to get into the Prado Museum. And I don’t mean just a little line – no line, straight up to the counter for tickets. No one on the freeways or at least very few cars and trucks. Everyone is using the non-toll roads instead. Things got a little busier in the industrial North, closer to France.
And the Indignados (just like OWS) have all but gone. Any university-educated, English-speaking Spaniard has left to find a job in London or Germany. What is left is a sense of malaise (and GDP down 20% from the 2008 peak, house prices down 30%, youth unemployment at 50% and mortgage delinquencies over 5%).
5. The average Englishman thinks they should butt out
Butt out in both senses. Exit the Eurozone and stop getting involved with the European problems.
Let’s face it, the Brits aren’t Europeans. And frankly, they’ve got their own problems to work through. And the average German thinks the English should butt out too – they’re not committed to Europe, so they should mind their own business.
Of course backing out won’t be easy. Politicians aren’t the rip-off-a-bandaid types. They’ll drag this one out. God knows why, you’ll never get a consensus. And I think it’ll take a real crisis to get any action.
Well enough recession or depression talk. We’re in the land of great coffee, real food and pretty surfboards.