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As I said in my previous post, Spain and Europe have many  structural problems, but the chaos into the Corporate State is  so acute that demands its own chapter in the books of History, and its  own solutions.

I have not been the only one to realize. Back in 2010 the previous Spanish socialist government agreed with the regions to reduce (a mere 24,9%) the complexity (I must add, The Complexity didn´t mean The Budget. They  realized that their minions where out of their control and wanted to concentrate and simplify) of the regional branch of what I have called “The Spanish Corporate State”, by 2012.

This is a link to the latest progress-report, with the situation at April-01 2012, unfortunately not in english.


The real progress has been of a 5.9%, as you can see in the figures of the third page of the report.   But can you see this image, from page 5 of the report, with data in groups of three?

They represent (from left to right) the number of “entities”, the  initial state in 2010, the forecast for 2012, and the real situation in 2012.   But the main thing is what they ARE.   (1) “private” companies state-controlled but not considered public-enterprises (http://wp.me/p2KoGX-3);  (2) “Consorcios”, agreements between 2 or more public administrations to manage something in common – perhaps in the USA this would mean economies of scale, here it means extra bureaucracy, extra budget, and a cozy place for the ruling party with no place for the rest;  (3) “private” charities and alike, state controlled;  (4) state companies, branches of the state that act as companies; and last and less, real state-bureaucracy.  So, of all the entities, only a fraction of the smaller group COULD be part of what I consider The Democratic Administration. And these are only the official data…

What does it mean? I suggested a big list of reforms to Mr Mariano Rajoy last year but, who would be affected by them if most of the real State is out of the general laws? So, the first step is to clean up our institutional mess, and we have to  start recognizing that the main social-security debtor, rules-breaker (http://wp.me/p2KoGX-z), illegal  contractor in Spain, is the very State. Once you recognize this, dissolve the  facade entities, add its debt to the public debt, its liabilities, its  personnel and, of course, prosecute as much big-wigs as you can,  you might perhaps begin to REALLY reform the public sector.

The path has been marked by a recent (September 2012 ) sentence of a lower court in Andalusia. Its weird, to “legalize” a illegal situation to get rid of it, but it really is the only -legal- way I have found and with our regulatory framework and the modifications I propose, it really has very “elegant” consequences that I will explain in another post.


BAIL-OUT SECOND CONDITION. REFORM THE POLITICAL PARTIES AND UNIONS FUNDING SCHEMES.  You only need to know that the Corporate State receives its blood via direct transfers from the budget and via subsidies “in exchange of services given to the State”, like training courses for employed and unemployed, foreign relations, legal assistance to people in need, etc… In another post I will tell you in five paragraphs “The ERE scandal”. 1.000 million euros that “ops” were devoted by the Andalusian government to a social need: To pay the (illegal) early retirement of e.g., trade union´s personnel in its 40s.

BAIL-OUT THIRD CONDITION: SIMPLIFY REGULATION ON PENSIONS AND UNEMPLOYMENT “BENEFITS”, PUBLIC HEALTH AND EDUCATION. Again, I will not add now on this although its a really controversial issue, but If we want mobility and civil rights, the social security scheme has to be a mere state-guaranteed alternative to the private sector in saving and services, not a “benefit” that is beg by citizens and given by politicians. We need price, not only for financial sustainability, but to recover our status. To remember the public sector managers that we are the ones that pay, the bosses, not the servants.

BAIL-OUT FOURTH CONDITION: REFORM THE PUBLIC ADMINISTRATION. (http://wp.me/p2KoGX-17) Focused in going from a XIX century one to, at least, a 1950S one, with a real Planning Programing Budgeting System. The general administration expenditure is around a 20% of the regional public sector while the rest is Health and Education, and (at State level) pensions anf unemployment benefits.  For the ones that say, “a mere 20%, who cares” I would add… who in hell do you believe that the contracts and working conditions of that 80% are forged?

As this is my playground, I will give a biT more detail here, but not much. RighT now there is a system of exams to become “funcionario”. If the exam is not rigged (in local entities is common, and into the Parliament as well. Neither in regions nor into the central government The Judiciary has it´s own problems) it is usually horribly difficult and guarantees that no merely “connected” person will pass. But once you are in, the control measures are scarce, random, and basically (Although no everywhere) absurd.

What I suggest is to turn upside down the state of things. Right now the Spanish administration is an Orwellian nightmare for citizens, and a anarchic paradise for some public sector workers, and specially for politicians. It should be just the opposite. I asked for open cameras at out workplaces, emails published, phone calls recorded and published… a transparency we lack. Perhaps we have no means for a proper control, but we have millions of unemployed people with time to connect to internet. The public TV channels (dozens) should be closed and re-opened as mean to increase transparency. A new, two rounds selection process would be establish, and (nuclear), public job descriptions and handbooks would be available (First, they ought be written).

I have realized that I should go on for a week for the situation and proposals to be fully understood by a foreigner. I will not make this post so long. I will have to devote at least an extra post to each bail-out-condition, but before the end, I want to emphasize something:

I am an insider in the public sector. Am I asking for financial measures? Deficit or debt targets? Incomes increases? No. Because that all are nonsenses if they are not pieces of a plan. Monetary policy has transformed the economic policy in a joke.

As with the IMF interventions in Latin America in the 1980s,  what we need is a meaningful project. Something that asks why it failed and what can we do. Which is the past and which the future will be.  This would allow the People, that is the main character in this play, to adapt, I tried to tell Mr Rajoy: We need a new model, with less money but, perhaps, with a better life standar. This is the bail-out that I am waiting for, the one I would ask for.