Travelogue: Madrid, Toledo, Mérida, Elvas, Badajoz, Barcelona

I've just returned from my holiday in Spain (with a brief foray into Portugal). It was, as all my trips to Spain have always been, an absolute delight!

Day I:

I arrived in Madrid early Saturday morning, 14 October 2017. I went immediately to my hotel to squeeze in a nap ahead of the arrival of a friend who was coming down from London for the weekend. (It's a sad fact that I simply cannot sleep on planes, so I was exhausted.) Happily, the hotel had a room available that early. I managed to sleep until my friend arrived around midday, at which point we headed out to the Prado. This was to be an important pilgrimage for us both: I had not been to this, one of my favorite museums, in well over a decade; and for her it was a return to the place where, many years earlier, she had first become inspired to study art history and become a curator. And what a privilege for me to visit such a place with an expert! So after a quick stop for lunch, we entered that hallowed place that contains so many of my favorite artists, such as Goya, Velázquez, Rosales, Tintoretto,  Fortuny, and El Greco. The best rooms (in my humble opinion) are Goya's Black Room (from his later period) and the Velázquez rooms. Easily my two favorite pieces are Goya's Duelo a garrotazos and Fortuny's Malvas reales, the former for thematic reasons; the latter for sheer aesthetics.

The one thing I did find disturbing amidst all this beauty, however, is the clear roots of modern Western racism. In almost every depiction of Jesus, Mary, and Joseph, they are depicted as being distinctly European (which is of course absurd given when and where they lived), while all enemies of the family are usually painted with darker skin tones and decidedly more 'ethnic' features. Little wonder that to this day, Jesus is a Caucasian in the minds of most Western Christians. 

After the Prado, we spent some time decompressing after beauty-overload and then headed out to dinner at my all-time favorite restaurant anywhere: Restaurante Sobrino de Botín, or simply Botín. I first ate there in Spring of 1991 with my first ex, who grew up in Madrid. It has been open since 1725, and has witnessed an impressive portion of Spanish history. Goya worked there as a waiter before making it as a painter, for example. Hemingway ate there often (though if all claims are to be believed in Madrid, apparently he ate and slept pretty much everywhere). But unlike many places blessed with a long history and an excellent location, Botín doesn't rest on these laurels: it is legitimately some of the best Spanish cuisine to be had. But for all the delightful choices on the menu, for me there is only one thing to order: cochinillo asado, or suckling pig. Preceded by a plate of jamón ibérico, and paired with a bottle of Muga, it is the ideal meal for any lover of Spanish cuisine. We were even treated to entertainment when a local tuna stopped by!

Day II:

Sunday was our trip down to Toledo, a place I hadn't visited for many years.  As the weather was beautiful, I rented a convertible for the one-hour drive down, and was very glad I did! What a gorgeous day for it! The temperature was ideal, around 25C/77F, and there was abundant sunshine. My friend joked that if she could pick a day to die, it would be this and she'd go out like Isadora Duncan. (I'm happy to report she avoided this quick if gruesome death.) We spent the day exploring that ancient and wondrous town, stopping by the Alcázar, the cathedral, monastery, and many other amazing sites. I cannot recommend this town highly enough to visitors. Since my friend is a far better photographer than I, I am shamelessly appropriating her pictures from that day.

Day two ended with me dropping off my friend at the airport, as she had to be back at work Monday morning to wrap up her project in London.

Day III:

Day three during the day was just wandering Madrid. I toured the palace and its gardens, the modern (and frankly hideous and pointlessly derivative) modern cathedral, and the plazas, and just generally made every attempt to lose myself in the city. My interactions with the locals were a constant delight. I love the madrileño dialect of Spanish, so just listening to them is a pleasure in itself. But it's also about charm of the way they interact with one another, a sort of lighthearted brusqueness that hides a certain warm humor.

I won't get points for originality, but the fact is that evening three was identical to evening one, only with a different friend: a return to Botín! We had a lovely evening discussing current events in Spain. My friend, an entrepreneur, felt very strongly that the government itself is the worst enemy of the economy, especially give how difficult and expensive they make it for independent contractors to contract me and work for others. Regardless of how little you earn, just by being classified as one of these workers, you owe the central government a minimum monthly tax, a tax that may in fact surpass your income. Little wonder that such policies do nothing to encourage the very entrepreneurialism Spain claims to promote.

Day IV:

For day four, I rented a convertible (from Sixt, a mistake I will never make again, I promise!) and set out to fulfill two travel goals: see Mérida and cross the border into Portugal. I took my time traversing Castilla-LaMancha and Extremadura, stopping for a while in the medieval town of Oropesa, which had caught my eye from the road. A walled city with an impressive old castle (which is now a parador), it was a quaint stopover and is well worth a couple of hours of your time if you find yourself passing through. 

I finally arrived in Mérida after sundown. My hotel was the Ilunion Mérida Palace, right on the main plaza. After exploring some of the sites by night, I decided just to eat and turn in. As it was a weeknight and off season, the restaurant I chose near my hotel was mostly empty, despite it being the hour at which many locals would normally be eating (though well after the hour at which many tourists would be). I had a charming and kind Chilean waiter who chatted with me for a bit while I had what must have already been my fifth or sixth (but far from last!) plate of jamón ibérico of the trip. It was an excellent way to wind down a long day of travel!

Day V 

I awoke early to find that I would need an umbrella! It was pouring down rain as I went out for my coffee in the plaza. Fortunately, I was able to purchase an umbrella quite nearby and go about my sightseeing. I had come principally for the Roman ruins, of which Mérida has an impressive array, not least of which is the longest bridge the Romans ever built (800 meters, or half a mile). The city, whose name is a corruption of Emerita Augusta, referring to the Roman veterans of Augustus's army who were permitted to settle it in 25 BCE, is a history-lover's paradise. The bridge, theater/temple, and amphitheater are in amazing states of preservation (and restoration). One truly gets an impression of what daily life must have been like here. Equally impressive is the Moorish fortress (Alcazaba) by the river. It was built on the ruins of earlier Roman structures. All in all, I would say there are few places that provide a better sense of the many disparate influences throughout Spanish history, from Roman to Visigothic to Moorish to Christian.

                            Entrance where gladiators emerged to fight for their lives and for the amusement of the residents of the town.

                                                                                   Where state and religion meet to enforce Roman values.

                                         Well-preserved/restored Roman tiles/mosaics.

                                 Architectural wonder. The Roman Empire's longest bridge at 800m/0.5miles.

The clouds parted in the late morning, and by early afternoon I was on my way to Elvas, Portugal. As I flew over the border without hitting the breaks (never mind producing a passport or exchanging currency), I was reminded of the truly inspiring political achievement that we take for granted these days: the European Union. Everyone takes digs at its institutions, and some are even seeking its demise. But stop and reflect that on a continent where bullets and bombs were whizzing across contested borders as recently as two generations ago, borders separating mortal enemies whose conflicts spanned centuries, one can now drive non-stop and quite peacefully from the southern tip of Iberia to the icy north of Scandinavia. It is nothing short of an accomplishment for the ages. 

                                         Now entering another country without stopping, defying millennia of tribalism 

Upon arriving in Elvas, my immediate objective was food, as I had had nothing but coffee that morning. I wandered the town square near where I parked, slowly making my way to the castle. After a bit of aimless but happy meandering, I came upon a restaurant whose specialty seemed to be 'bread soup.' Apparently this does not mean soup made of bread, but rather a hearty, thick soup with cut-up sausages into which one adds thin pieces of bread before consuming. It made for a surprisingly filling meal, and the Portuguese red wine was delightful. But what pleased me most was the hand-made bags in which bread slices were served. I asked the waiter about them, and he gave me the name of the local artisan who made them. After lunch, I made a beeline to her shop and bought two. Apparently the patchworks on them were not random: each patch represented a city or region in Portugal.

                                                    Portuguese bread bag from Elvas

After lunch and my trip to to the local artisan's shop, I wandered the two and enjoyed the beautiful castle, a local church (Sé Catedral Nossa Senhora d’Assunção), and the charming town square. There, I was delighted to witness a large group of local kids sitting near me at the café. Instead of sitting around starting at their phones, they were singing songs together and laughing. It quite a nice change!

Church, exterior

Church, interior

Random street scene in Elvas

                                                    A lovely example of Portuguese tile

As the day ended, I headed back to Spain. I found a hotel in the frankly unremarkable city of Badajoz. My hotel had a casino, where I did my roughly once-a-decade bit of gambling (and losing). Not a wasted evening, though: I chatted with several interesting locals who worked there and gained more insights into the quiet desperation young Spaniards seem to feel with respect to their economic prospects. I met several young people who were all well trained in skilled disciplines, but who found themselves working nights at a small-town hotel casino due to lack of opportunity in Spain's chronically high-unemployment economy.

Badajoz Center

Badajoz center

Badajoz Alcazaba

                                                                   Badajoz Center 

                                                Badajoz Center                                                                     


Day VI

Day six was a slow, peaceful day of traveling back to Madrid through beautiful central Spain. I took my time, as I didn't have to meet my friend for our evening out until 8:00. This was to be a very special evening for me, a return to a place I had not visited in many years: that magical temple of flamenco called the Corral de la Morería. With the possible exception of Café de Chinitas, no place in Madrid (and arguably Spain) can claim to be the true home of flamenco. If you go, you absolutely must reserve online well in advance. Corral is both dinner and the performance, and the food is excellent, so be prepared to eat well. The wine list is impressive, too. But of course the dance is the attraction. Corral has always boasted among the best flamenco dancers, and tonight was no exception. My friend and I were entranced by the performance. As a special treat, the artistic director came onto the stage afterwards to welcome a visiting reporter from the New York Times and to talk about the soul of flamenco. She then treated us to her own dance, proving beyond doubt that flamenco has no age limit. 

                         Guests are permitted to take short videos at the very beginning of the performance.

Day VII:

Day seven was my quick trip up to Barcelona. I lived in Barcelona from 1998-1999, and had not visited since 2012. I hadn't originally intended to make this side trip, but the thought of being in Spain and not seeing old friends (and visiting my favorite Barcelona restaurant) seemed unthinkable. So I got a ticket on the puente aéreo and flew up to have drinks with a dear old friend in town, then have dinner at Tragaluz with another one. I have known them both since 1998. Neither friend is someone with whom I regularly speak these days, but no matter how many years go by, I always have an old sense of warmth when I do get to connect. As my trip was a bit rushed, I didn't get much in the way of pictures, though this look on my friend's face when she bit into dessert perfectly captured my feeling about our dinner.

What I found most interesting about my side trip to Barcelona were the discussions about the independence movement. As it happened, the very next day, the central government was set to take over Catalonia per Article 155 of the constitution. This isn't intended to be a blog entry on politics, so I will just say that what struck me most about all the conversations I had on the topic throughout my stay in Spain, is how differently Catalans v other Spaniards approached the topic. In Madrid, even those relatively sympathetic to the cause felt that Catalan leaders were manipulating the people of Catalonia for their own selfish ends and that the region would not otherwise be seeking independence at this time. And the more conservative voices repeatedly attacked Catalan claims of historical bases for being an independent nation. But Catalans with whom I spoke never mentioned their love of local leadership, and no one seemed to care about any historical claims to back up their arguments. It came down to just one thing: they were sick and tired of the corruption, incompetence, heavy-handedness, and arrogance of the central government in general, but in particular since Rajoy's rise to power.

Day VIII:

After getting back to Madrid, I made another trip to the Prado, because, well, the Prado. You could go there every day for a lifetime and still be overwhelmed by everything it has to offer. After spending a few hours there, I met up with yet another old friend, someone I have known since 1991. As luck has it, she now lives directly across the street from the Prado, so logistics were easy!

And for my final event in Madrid, I saved the best for last: I managed to get tickets to see Carmen at the Teatro Real. My companion and I met up for a quick dinner right next door to the theater. The performance, for which we managed to get box seats, was beyond amazing. The Paris Opera put it on, with the local symphony playing the score. The setting was modern. Every detail of the performance was beyond criticism. Afterwards, my companion and I had the wonderful opportunity to get a guided backstage tour of the whole theater, which was built in the early 19th century and restored in the 1980s and 1990s. When seated inside the theater, one doesn't get any sense of just how vast the overall building is. There are many stories of offices, dressing rooms, tailors shops, a wig design and creation room, cafeterias, rehearsal rooms for musicians and dancers. It goes on and on and on. We toured for over an hour and still probably saw only a small part. 

The looming entrance

After hours and empty

      Just outside the royal family's box, a portrait of of the theater's late royal patron (and grand-daughter of Queen Victoria)

And that was the wonderful finale to another very memorable trip to Iberia! The next morning, I flew back to the U.S. In the cab ride to the airport, I had to listen to a talk show on which a rabidly nationalistic Spaniard railed against the Catalans and their "ingratitude." It left me wondering what kind of Spain I would return to upon my next visit. But in whatever form she takes, Spain will always feel like a second home to me.

What the European Debt Crisis ISN’T: A Contrarian View

The conventional wisdom of late is that the debt crisis in Europe is a result of profligacy and poor public policy leading to out-of-control public debt, which in turn causes higher interest rates, which in turn choke growth. The sentiment here in the U.S. seems to be that such results are the natural outcome of overly-liberal policies of public spending on social programs, pensions, etc. I'm interested in examining these assumptions and seeing if they are truly valid. Having done so, the result is a contrarian view, one that seeks to cast the European debt crisis in a new light.

The roots of the European Debt Crisis arguably go back decades, all the way back to the beginnings of post-war European economic growth, social program planning and pan-European integration. The crisis itself, however, began in February of 2010, when Greece’s struggle to put its financial affairs first gained widespread public exposure when their government announced drastic measures to increase revenue and cut spending. Since then, the crisis has spread to other countries and now threatens the very foundations of the European Union and the very existence of its common currency.

Given the vast size of the economy of the Eurozone and the large number (17) of different sovereign countries in it, any attempt to analyze the entire scope of the crisis as it impacts all the relevant countries, would stretch to a (lengthy) book, so I'll limit the scope to eight players: Greece (since it is there that the crisis originally flared up), Spain and Portugal (typical representatives of other developing, heavily-indebted Western European Eurozone economies), France and Germany (because these are the pillars of the Eurozone and the prime movers behind European unity since World War II), as well as Italy, Netherlands and Belgium (representing wealthier Western economies). This selection gives us a good cross-section of the Western European politico-economic scene.

I will use this cross-section of the European Union (EU) to examine the nature and consequences of the debt crisis, taking the contrarian view that far from being a crisis caused by public spending, it is in fact a crisis of perception and of overly-conservative, anti-Keynesian government policies.

A note re terminology: in the context of this analysis, I'll often refer to ‘poor’ and ‘rich’/’wealthy’ countries. It must be stressed that these are relative terms appropriate only to the European context. For example, Greece may be ‘poor’ by Western European standards, but by global standards, it is in fact quite wealthy.

What the Debt Crisis ISN’T

The general sense one gets from observers of the debt crisis is that unmanageable sovereign debt is primarily a problem stemming from poorer countries in the zone and often associated with excessive government largesse (which in turn is associated with left-wing governing parties who favor higher social spending). The talking heads and pundits in the media also make much of the 100% threshold: a country that owes more than it produces in Gross Domestic Product (GDP) in a given year must be a country beyond hope. (One wonders why one calendar year is somehow such a magical figure? Why not debt v two years of GDP? Or six months? From a quantitative point of view, this ratio is arbitrary.) However, my analysis of these eight countries’ debt and political situations from 1995 to present reveals a very different picture. First let us look at debt as a percentage of GDP for the eight countries:


Fig. 1: Debt as % of GDP, 1995-2010

Of the three countries consistently above the group’s 16-year average, one was (relatively) poor Greece, but the other two were Italy and the Belgium, two wealthy countries with strong, advanced economies. And of the three with the lowest debt levels vis-à-vis GDP, we find two are poorer (Spain and Portugal) and only one is a wealthy country (Netherlands).

Perhaps it is a question of political ideology then? Are tax-and-spend leftist parties running up wild debts? Again, reality is quite different from expectations. If we examine these countries’ debt as percentage of GDP in years when they were ruled by left-leaning parties v years when they were ruled by right-leaning parties, a startlingly consistent picture arises:


Fig. 2: Debt as percentage of GDP in selected countries under Left v Right governments

In every single case (albeit by an extremely slim one in Portugal), the average percentage of debt was higher on average under right-leaning governments than under left-leaning ones. For the group over the 16-year period, the gap was 8.2 percentage points.

Regardless of who ran up the debt and the characteristics of countries that have done so, does high debt by itself lead to ruin? Obviously not. Let’s take that arbitrary 100% threshold and look at countries that have such high levels of debt. In the 2000s, before the debt crisis, the three ‘worst’ debt countries noted above (Italy, Greece and Belgium) had GDP growth of on average 1.48%, practically indistinguishable from that of the ‘best’ (Portugal, Netherlands, Spain) at 1.44%.

What about the impact of high public debt on interest rates? It is often argued that the very high level of public debt in several European countries has been the culprit for higher interest rates, which in turn put a chokehold on growth. But as Henri Sterdyniak argued in his presentation to the Franco-German Conference in May of 2010, this is not a tenable argument, given that the higher levels of public investment (and thus debt) merely offset lower borrowing by the private sector, leading to no net increase in debt. In his view, it is thus “ridiculous to pretend that high public debt will bring high interest rates.”

So if these high levels of public debt are not caused by out-of-control left-wing spending binges in poorer countries, they are not choking growth, not leading (directly) to higher interest rates, then what exactly is the crisis about? In my view, it is a crisis of governments being driven to panicked and ill-advised policy shifts by markets that insist on austerity and restraint at exactly the time that traditional Keynesian economic policy tells us we should be doing the exact opposite. This alternative viewpoint is not unique: analysts such as Sterdyniak take the same position.

As evidence to support this thesis, look just outside the Eurozone at the United Kingdom. Following their election victory in 2010, the new Conservative government implemented severe austerity measures to get government spending and debt under control. The impact on the economy has been noticeable: in the four quarters prior to austerity measures taking effect (Q4 of 2009 through Q3 of 2010), UK economic growth lagged Eurozone growth by less than 1/3 of a percentage point. In the subsequent four quarters (Q4 2010 through Q3 2011), that spread more than doubled to .75 percentage points of growth. Applying Okun’s rule of thumb and given the size of the UK labor force, this translates into thousands of more unemployed British workers, which in turn only reduces the tax base even more, while increasing the strain on already curtailed public services, thus reinforcing a vicious cycle with very real human costs.

Unringing the Bell: European Integration Too Advanced for Retreat

Regardless of the causes and consequences, the question must be asked: can Europe simply turn back? The knock-on effect of the crisis from one country to the next is a result of these countries being bound together by a single currency, so could the Eurozone simply go back to the pre-2000 world and restore their national currencies, freeing up each country to pursue its own fiscal policies independently? In a word, no.

First of all, the euro is not the only thing – or even necessarily the most important thing – binding the 17 countries of the Eurozone (not to mention the 27 of the wider EU) together. Economic integration began long before currency integration, and it has advanced too far to be unraveled without serious consequences. One stark example of this is the debt itself: it is spread around Europe in a complex web of interdependence such that, for example, French investors have USD 365 billion worth of exposure to Italian debt; Germany USD 117 billion in Spanish debt; and Spain USD 325 billion worth of UK debt. So no country can afford to see any other country go under without serious consequences for its own economy.

Economic interdependence aside, there is also just the sheer legal and financial complexity that would accompany any attempt to turn back the clock. Consider the billions (if not trillions) of euros worth of personal/consumer debts, contracts, purchase orders and other agreements currently in effect and denominated in euros. Now imagine these 17 countries reverting back to their respective francs, marks, pesetas, etc., and trying to revalue these old currencies in light of new realities and then adjusting terms, payments and contracts accordingly. The resulting lawsuits alone would be a nightmare.

So it is unlikely that Europe can go back. But how can it move forward when the Eurozone members have such varying levels of debt, creditworthiness, local policy and sometimes conflicting needs? There is a growing consensus among Eurozone leaders that the status quo will not hold. In December, European leaders met at a summit whose aim was nothing less than the salvation of the euro through ever-tighter integration and stricter rules. By the end of the week, the road map was clear: for better or worse, there was no going back.

Conclusion

I've sought to look at the European Debt Crisis in a new light. The resulting analysis has shown that the crisis is quite different in nature than the ‘talking heads’ have portrayed it, both with respect to cause and impact. I've also shown that the reaction to the crisis in the form of austerity measures, may in fact have proven counter-productive. Finally, I've shown that for all the perils of integration, the Eurozone countries cannot go backwards: a way forward must be found.