El Pais reports the arrival of the Brussels carpetbaggers in Madrid in advance of the transfer of up to €62bn of EU funds to save the Spanish banks. In a further ratings downgrade by Moody's the Spanish banks, including Santander, now hover at ratings just above junk status. The paper reports that the 'missions' in Madrid of the Commission, the ECB, Eurostat and the EBA are playing an increasing role in managing Spain's tax and budget, with a commensurate loss of sovereignty. The role of the EU institutions is likely to be made more explicit in advance of the financial transfer, timetabled for 9th July. The demands of the EU missions, says El Pais, to the Ministry of the Economy and the National Securities Market Commission (CNMV) are becoming increasingly frequent, including calls for changes in VAT and the production of six-monthly budget statements.
One of the most controversial requirements of the Berlaymont carpetbaggers is to reverse the autonomy enjoyed by Spain's Autonomous Communities, or regions. Running their own schools, healthcare, universities, welfare services, economic development and other services, the ACs are responsible for some 38% of public spending against a central government spend of just 18% (with local councils spending another 13% and the social security system the rest). The Commission has called for the dismantling of the autonomous offices (or 'embassies') maintained by each of the regions in Brussels and is pushing the Spanish government to establish more direct control over them, allowing the commission a direct role in their economic governance and in re-formulating Spain's tax system. Brussels wants the ACs to have the same obligation to follow the bailout conditions as Madrid.
With a right to self-government established by Spain's 1978 constitution, the ACs employ 50% of Spain's public servants, with a further 24% employed by city councils and provincial diputaciones.
This is the real meaning of 'closer fiscal union' - not only the re-writing of national budgets by Brussels, but the closing down of local autonomy in the subject territories of the Commission. Like everything to come out of the Berlaymont, it is profoundly anti-democratic and makes conflict and bloodshed in Europe more likely rather than less.