Month / October 2017

by Admin

Eurozone’s permanent austerity based on failed ideology

This is an excerpt from the economic discussion document launched by MEP Matt Carthy on October 27, entitled The Future of the Eurozone. Download the full document for a referenced version of Chapter One, below.

BACK IN 1929 when the Wall Street crash hit, the response of then-US President Herbert Hoover was to restrict government spending – an action now almost universally acknowledged as having turned the stock market crash into the Great Depression.

The free-market ideology underpinning Hoover’s austerity policies held that an economy with high unemployment could return to full employment through market forces alone. Instead of boosting public spending, the government should do the reverse. By cutting government spending and increasing taxes, the government deficit would be reduced, which would restore market “confidence”. This restoration of confidence would lead to increased private investment, and the market would adjust itself to return to full employment.

The confidence fairy

The confidence theory was demonstrated back in 1929 to be incredibly damaging and to achieve precisely the opposite effect of what it aimed to achieve. The actual effect of implementing austerity in a period of economic downturn was to cause a contraction in the economy, thus weakening the economy further, causing tax revenues and national income to fall, and the deficit to increase. The contractionary impact of austerity policies during a downturn was explained by John Maynard Keynes during the 1930s, and Keynesian models have proved to be a reliable predictor of growth (or lack thereof) in the wake of the 2007-2008 crisis.

Countless books, academic studies and articles have outlined how the programmes imposed by the Troika – the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) – on the Eurozone’s “peripheral” economies since 2008 have exacerbated the crisis. In the decades before the global financial crisis, these same policies had caused the exact same devastating contractionary effects when imposed under the guise of “structural adjustment programs” by the IMF across Africa, Asia and Latin America.

But while Keynesianism was experiencing an academic and policy revival internationally following the global financial crisis, Europeans somehow managed to cling to the confidence theory, which persisted in the decades beyond the Great Depression to this day. It is the dominant theory that has shaped both the structure of the Eurozone and European Union (EU), and the EU response to the global financial crisis of 2008.

In 2011 at the height of the Eurozone crisis, Nobel Prize-winning economist Paul Krugman memorably dismissed this theory as the “confidence fairy”. Two years later, commenting on the theory’s persistence in the face of overwhelming evidence to the contrary, he added: “European leaders seem determined to learn nothing, which makes this more than a tragedy; it’s an outrage.” Fellow Nobel Prize-winning economist Joseph Stiglitz has dubbed the free-market fundamentalists’ obsession with reducing deficits as “deficit fetishism”, pointing out that “no serious macroeconomic model, not even those employed by the most neoliberal central banks, embraces this theory in the models they use to predict GDP”.

Europe’s lost decade

It is common for scholars to refer to the results of the IMF structural adjustment programmes from the 1970s-1990s in Latin America, Asia and Africa as having caused these continents “a lost decade” or “lost decades”. Europe has lost a decade but there is a danger that it may lose several more – not only because of the policy responses to the crisis but because of the actual structure of the Eurozone. The results of the European response to the crisis are damning. Three patterns are obvious: the Eurozone countries have in general fared far worse in terms in terms of recovery than countries outside of the common currency; the recovery within the Eurozone has been sharply asymmetrical, with divergence between strong and weak countries increasing; and there has been a significant rise in inequality across Europe.

Growth in the US and Britain has been weak since the crisis but it has far outpaced the Eurozone recovery. It is difficult to even use the word “recovery” to describe the Eurozone experience – only last year did Eurozone GDP reach its pre-crisis level. In June 2016, the Eurozone unemployment rate was still in the double figures at 10.1 per cent; while the EU-28 had unemployment of 7.7 per cent. But the unemployment figures in several of the crisis countries remains double the Eurozone average – in Greece by 2017 the unemployment rate was 21.7 per cent while at the same time in Spain the jobless rate was 17.8 per cent. The figures are masked by the huge levels of emigration that the crisis countries experienced as well as the fact that number of hours worked per worker has declined across the Eurozone.

Stiglitz notes that youth unemployment persists at twice the level of overall unemployment. “The persistence of high unemployment among youth will have long-lasting effects – these young people will never achieve the incomes they would have if job prospects had been better upon graduation from school.”

While the Eurozone stagnated for a full decade following 2007, countries within the EU but outside the Eurozone had a GDP 8.1 per cent higher than in 2007 by 2015. The United States had a GDP almost 10 per cent higher in 2015 than in 2007. Over the same period, the Eurozone’s GDP grew by just 0.6 per cent.

When measuring living standards it is more accurate to examine GDP per capita than GDP overall, and while in the US GDP per capita increased by more than 3 per cent from 2007-2015, while over the same period in the Eurozone it actually declined by 1.8 per cent. As living standards have declined – devastatingly in crisis countries, and especially in Greece – income inequality has also risen drastically. In its Economic Forecast last autumn, the European Commission warned of a potential “vicious circle” as expectations of long-term low growth affect investment decisions, and that “the projected pace of GDP growth may not be sufficient to prevent the cyclical impact of the crisis from becoming permanent”.

The declining level of growth in the British economy since the Brexit vote means a “strong downward revision of euro area foreign demand”, while the “sizeable depreciation of sterling vis-à-vis the euro is expected to have an adverse direct impact on euro area exports to the UK”. Eurozone exports were forecast to decrease slightly this year and stagnate in 2018, while possible financial crashes in China or the US and the ongoing non-performing loan banking crisis in the Eurozone pose serious risks.

Despite these sober warnings, European leaders and the financial press have raucously celebrated the anemic growth in the Eurozone’s GDP in the first two quarters of this year, of 0.5 per cent and 0.6 per cent respectively – crucially, driven by a slow increase in domestic demand as opposed to export-led growth. But this celebration ignores the fact that in normal circumstances, these figures would be viewed as abysmal, and that global economic forces pose serious threats to this fragile recovery.

Fairies and leprechauns

Predictably, these feeble shoots of growth are described as being the result of austerity policies by those who have claimed for the past 10 years that austerity will start to work any day now. A slightly recalibrated confidence theory has been proposed by a small number of economists associated with the neoliberal school of thought since the 2008 crisis – that of an “expansionary fiscal contraction”, with Harvard’s Alberto Alesina and Goldman Sachs’s Silvia Ardagna leading the charge with their joint paper in 2009. What they are actually recommending largely amounts to recovery through beggar-thy-neighbour competitive devaluations (or in the common currency, internal devaluation).

Stiglitz points out that these instances of economic recovery are actually cases where certain countries had “extraordinarily good luck” in that “just as they cut back on government spending, their neighbours started going through a boom, so increased exports to their neighbours more than filled the vacuum left by reduced government spending”. Several papers from the IMF itself have backed up this analysis.

This is largely what happened in the Irish economic recovery, which has become the EU’s poster child for austerity policies. The narrative goes that the Irish state followed the German model – it followed all of the EU rules and implemented the Troika’s structural reforms, slashed government spending to reduce the deficit, cut wages to increase competitiveness, and as a result restored market confidence, depressed domestic consumption and experienced a corresponding rise in exports.

The reality is more complex, and is based on a combination of growth in jobs in the indigenous sector, including the services sector, arising from favourable exchange rates for the Irish state; and on the illusory “growth” of GDP caused by the industrial-scale corporate tax avoidance strategies undertaken by US multinationals in the technology, pharmaceutical and aircraft-leasing sectors.

There has also been a certain level of export-led growth since 2009 but it has been hugely exaggerated and difficult to reliably quantify. But this export-led growth did not in any way fit into the German model and “expansionary austerity” narrative of an internal devaluation based on lowering wages and domestic demand. Rather than being based on manufactured exports with a competitive edge because of wage cuts, export growth took place among firms in high-wage service sectors such as technology and finance during a period in which wages in these sectors were going up.

Of course, last year’s ludicrous announcement that Irish GDP had grown by more than 26 per cent in 2015 raised an enormous red flag that all may not be what it seems in Ireland’s economic recovery. Krugman, coiner of the “confidence fairy” term, found another apt folkloric description for the occasion: “leprechaun economics”.

These figures were so detached from reality that they were cause for serious alarm but, incredibly, the Irish government welcomed them. According to the figures, per capita income apparently rose to 130,000 in 2015, and the state’s industrial base doubled in just one year. But the Net National Income grew by 6.5 per cent in 2015 while consumer spending rose by 4.5 per cent. These income and consumption figures are a far more accurate reflection of real economic activity and growth. Official GDP figures have a major and serious role to play in fiscal planning, spending and borrowing. They need to be credible and a measurement of real economic activity.

Most alarmingly, the figures reveal a glimpse at the level of dubious accountancy tricks being played by multinationals in Ireland during a period in which the Irish government claimed it was committed to playing its part in the global crackdown on tax avoidance. The Irish Central Statistics Office (CSO) identified relocations and inversions by multinational enterprises as the major contributing factors to the so-called growth. It seems as though there was a rush by multinationals to ‘turn Irish’ in 2015 in the context of global action on tax avoidance and tax havens, through inversions – where a multinational corporation changes tax domicile after it buys up a smaller Irish-registered company. The transfer of financial assets and intellectual property patents into Ireland does nothing to actually create jobs or contribute to growth in the real economy.

In response to the fantasy figures for 2015, the Central Bank of Ireland published a study stating that to measure growth or activity without the reality being skewed by the activities of multinationals, GNI* (Gross National Income, modified) should be used instead. GDP and Gross National Income differ as a result of the “net factor income from abroad” (eg, repatriated profits and dividends of multinationals). While GDP is a measurement of the income generated by the economy, GNI measures the income actually available to its residents. Irish GDP is more than 20 per cent greater than GNI, one of the largest differences among all economies globally (the two figures can usually be used interchangeably).

But even using GNI is not sufficient to get an accurate picture of real economic activity according to the CSO, which developed a measure of “modified gross national income” or GNI*. GNI* is Gross National Income “adjusted for retained earnings of re-domiciled firms and depreciation on foreign-owned domestic capital assets” – ie, modified to account for depreciation on intellectual property owned by technology and pharmaceutical firms. When GNI* is used to measure the Irish economic recovery, the picture is not so rosy. “The Irish economy is about a third smaller than expected. The country’s current account surplus is actually a deficit. And its debt level is at least a quarter higher than taxpayers have been led to believe,” the Financial Times reported on the first set of “de-globalised” data on the Irish economy in July this year.

For 2016, the value of the Irish economy according to its GDP was €275 billion, but according to its GNI* its value was €190 billion – a huge difference that indicates that not only is the Irish economy not nearly as strong as the official narrative portrays, but also that the Irish state may have facilitated multinationals in avoiding up to €85 billion in tax in one year alone. The CSO reported that in 2015, government debt was 79 per cent of GDP but 100 per cent of GNI*; and that while the state’s fiscal deficit was 1.9 per cent of GDP, it was 3.4 per cent of GNI*, well above the 3 per cent limit imposed by the EU’s fiscal rules.

There has also been growth in employment over the past three years in the Irish indigenous sector. For example, job growth took place in the agriculture and food sectors, and in accommodation and tourism. This growth was based on two related factors. The first was the depreciation of the euro against the dollar and sterling as a result of the crisis, and the second was the relatively higher economic growth in Britain and the US, the Irish state’s two largest trading partners. The (temporary) lower value of the euro was critical to the recovery experienced in the Irish indigenous sector. The relative growth in the US and Britain was also influenced by the fact that these two states are not constrained by the Fiscal Compact rules – borrowing in the US and Britain did not fall below 3 per cent since 2008.

But the specific circumstances of the Irish state’s trading patterns mean that this “recovery” cannot be transposed or replicated in other member states of the EU. It also poses significant risks, especially the risk of a significant fall in the value of sterling as a consequence of Brexit. A sharp depreciation of sterling against the euro – something we are already beginning to see – would likely jettison this recovery. Worrying signs of a technology bubble, a new Irish housing bubble and a massive shadow banking sector are all factors that may also influence this recovery. Crucially, the structure of the Eurozone itself, and the austerity ideology it has enshrined, make another economic slump inevitable.

The evidence shows that the Irish recovery happened in spite of, not because of, the EU austerity recipe – and it would have happened sooner, and with far less pain to the Irish people, had ideologically driven deficit fetishism been rejected.

A fiscal straitjacket

In 1992 the member states of the European Economic Community (EEC) signed up to the Maastricht Treaty, which laid the foundation for the common currency. The Maastricht Treaty enshrined the so-called convergence criteria – a set of rules members and potential members of the common currency were obliged to follow. To join the Economic and Monetary Union (EMU), states had to pledge to control inflation, and government debt and deficits, and commit to exchange rate stability and the convergence of interest rates. The blanket, one-size-fits-all fiscal rules in the criteria – that member states must keep public debt limited to 60 per cent of GDP and annual deficits to below 3 per cent of GDP – were proposed by Germany, based on its national Stability and Growth Pact.

The convergence criteria, as the term suggests, were aimed at achieving convergence among the diverse economies that were to form the Eurozone. The founders of the euro acknowledged the tendency for economic shocks to hit diverse economies asymmetrically in a monetary union. Without convergence, a common currency won’t work – for example, with diverse economies the interest rate set by the ECB for the entire Eurozone may impact positively on one country but negatively on another country with different economic characteristics. Without convergence, it would be difficult if not impossible to ensure full employment and current account (external) balance among different economies at the same time.

There are many spillover effects that one economy can have on another in a monetary union – for example trade imbalances and internal devaluations – but the only one that the Maastricht Treaty focused on was members’ fiscal policy. “Somehow they seemed to believe that, in the absence of excessive government deficits and debts, these disparities would miraculously not arise and there would be growth and stability throughout the Eurozone; somehow they believed that trade imbalances would not be a problem so long as there were not government imbalances,” Stiglitz comments.

Governments facing an economic downturn have three main ways they can aim to restore the economy to full employment: to stimulate exports by devaluing their currency; to stimulate private investment and consumption by lowering interest rates; or to use tax-and-spending policies – increase spending or lower taxes. Membership of the Eurozone automatically rules out using the first two mechanisms, and the fiscal rules largely remove the third option from governments.

(The confidence fairy is almost always accompanied by a fervent belief in “monetarism” among neoliberals – ie, that only monetary policy by an independent central bank should play any role in economic adjustment, and anything else would amount to dreaded government intervention in the economy.)

When a Eurozone member state experienced a downturn, its deficit would inevitably rise as a result of lower tax revenue and higher expenditure on social security. But when the convergence criteria kicked in, causing governments to cut spending or raise taxes, it would invariably worsen the downturn by dampening demand. Moreover, debt and deficits did not, and do not, cause economic crises. Ireland and Spain were running surpluses when they experienced a crisis, and both had low public debt.

The convergence criteria are purely ideological and economically unsound. But as the European Central Bank (ECB) was preparing to begin operating to control inflation and interest rates, Germany pushed for the adoption of an EU-wide Stability and Growth Pact in 1997, including non-Eurozone members, to enshrine the fiscal control aspects of Maastricht, and more generally to increase EU surveillance and control over member states’ national budgets.

The Stability and Growth Pact has been called a lot of names in its day – the “Stupidity Pact”, a “Suicide Pact”, the “Instability Pact”, and more. And it is deserving of each one. In 2002, then-President of the European Commission Romano Prodi told reporters the pact was “stupid”, while French Commissioner Pascal Lamy called it “crude and medieval”. In practice, the Stability and Growth Pact has proved to achieve the opposite effects it claims to aim for. Cuts to government spending have a contractionary effect and cause the economy to shrink; when the national income shrinks, spending on unemployment benefits have to rise, and the situation gets worse. This is exactly what happened in the aftermath of the recessions in Ireland, Spain, Greece and Portugal.

Early in the 2000s, both Germany and France repeatedly breached the fiscal rules. But they were not penalised, and were always provided with an extension to try to meet the targets. Almost all EU member states have breached the rules at some point – during the recession only Luxembourg did not go over the 3 per cent deficit target. Fiscal contraction will exacerbate unemployment, but it may eventually restore a current external account balance – when demand for imports becomes so low as a result of the recession that exports catch up.

University of London Professor George Irvin has described German Chancellor Angela Merkel’s insistence that government profligacy is at the root of the Eurozone crisis as betraying “near-total ignorance of how economies work”. “Budget balance for a national economy is fundamentally different from that of the household or the firm. Why? Because budgetary (or fiscal) balance is one of three interconnected savings balances for the national economy. The other two fundamental economic balances are the current external account balance… and the private sector savings-investment balance. If any one account is out of balance, an equal and opposite imbalance must exist for one or both of the remaining accounts,” he wrote.

But despite the vast evidence that the Stability and Growth Pact was counterproductive and unenforceable, Germany pushed for the fiscal rules to be tightened yet again in 2012 through the Fiscal Compact Treaty, which created the obligation for the convergence criteria targets to be inserted into the national law of the ratifying states.

The Fiscal Compact

In 2010, Germany proposed the reform of the Stability and Growth Pact to make it stricter, and “in return” pledged to support the creation of a Eurozone bailout fund that member states could draw upon if they were in dire straits – with strict fiscal conditions attached, of course. The reforms aimed at enforcing compliance of the Stability and Growth Pact known as the “Six-Pack” and “Two-Pack” of additional regulations and directives were adopted at EU level.

In 2012, an intergovernmental treaty – the Treaty on Stability, Coordination and Growth – was signed by all EU Member States with the exception of Britain and the Czech Republic. (When Croatia joined the EU in 2013, it declined to sign.) The Treaty, known as the Fiscal Compact, incorporated the Stability and Growth Pact, the Six-Pack and Two-Pack requirements, and more. Its central principle is that member states’ budgets must be in balance or in surplus, which the Treaty defines as not exceeding 3 per cent of GDP.

Critics of the Stability and Growth Pact had called on the EU to focus not on the general deficit but rather the structural deficit – what the deficit would be if the economy were at full employment. But instead of dropping the general deficit limit, the Fiscal Compact has adopted rules on both the general deficit and the structural deficit. The structural deficit limits are set by the Commission on a country-by-country basis and must not exceed 0.5 per cent of GDP for states with debt-to-GDP ratios of more than the 60 per cent limit, and must not exceed one per cent of GDP for states within the debt levels.

The “debt-brake” rule is the convergence criteria rule that government debt cannot exceed 60 per cent of GDP. The Fiscal Compact enshrines the rule that members in excess of this limit are obliged to reduce their debt level above 60 per cent at an average of at least 5 per cent per year. The structural deficit rule – called the “balanced budget rule” – must be incorporated into the national law of signatory states under the Fiscal Compact. An “automatic correction mechanism”, which is to be established at member state level and kicks in when “significant deviation” from the balanced budget rule is observed, must also be incorporated into national law.

Of all the member states who signed the intergovernmental treaty, only the Irish state put the Fiscal Compact to a referendum. The Fiscal Compact Treaty was adopted by just over 60 per cent of the voting electorate, with around 50 per cent turnout. The Fine Gael/Labour government’s decision to hold a referendum was not based on a belief in the right of the Irish people to have their say on their economic future, but rather their desire to go one step beyond simply incorporating the permanent austerity rules into legislation, and to insert them into the Constitution – despite the fact that the government’s Fiscal Advisory Council recommended the legislation option. Fine Gael, Fianna Fáil and Labour representatives urged the people to vote yes, dangling the carrot of access to the new bailout fund. The vote in favour was hailed by the government as an endorsement of its austerity policies.

The reality is that the Irish electorate was blackmailed into voting in favour of a proposal that endorsed a damaging austerity framework based on free-market fundamentalism as a result of the threat of crisis funds being withheld in future, and by the promise of the debt burden being relieved through the direct recapitalisation of the failed Irish banks by the future European Stability Mechanism. And after the approval of the Fiscal Compact Treaty and the constitutionalisation of austerity in Ireland, the Fine Gael-led government quietly dropped its call for the EU to recapitalise the Irish banks. Unbelievably, by 2015, the same Irish government representatives who had urged voters to approve the Fiscal Compact Treaty were pleading with EU authorities for more flexibility for Ireland’s implementation of the rules.

Irvin points out that Germany’s debt-brake cannot be good for other Eurozone countries, or even possible, for three reasons – that Germany’s exports to the Eurozone are by definition another member state’s imports; that there is insufficient global demand to sustain all Eurozone economies becoming net exporters like Germany; and that the public debt-brake completely ignores the problem of private debt, especially in the over-leveraged banking sector.

In a scathing critique of the Fiscal Compact, Francesco Saraceno and Gustavo Piga highlight that “no other country in the world has ever considered [such a rule], and with good reason” and say that the adoption of the Fiscal Compact has been “untimely, unfortunate and unequivocally wrong”. “Its uniquely negative effects, as the experience of Italy clearly shows, lie in the perverse features whereby, even if a government is allowed to renege year after year on the promised path toward a balanced budget, it is still required, every year, to recommit to a medium term (3-4 years) adjustment toward that balance. In so doing, business expectations are negatively affected, private investment plans are postponed, and stagnation becomes a permanent feature of the economy,” they write.

Return fiscal powers to member states

There have been repeated efforts, led by Germany, to exercise control over the budgets of member states. For several decades now, France’s demand for a European monetary union was always met with the German response that it must be accompanied by fiscal union, or German-led surveillance and control over national budgets. The same argument continues today, based on the same flawed ideology.

There have been several important proposals to reform the Fiscal Compact – for example, to focus only on the structural deficit; or to exclude capital investment from the rules. But while these proposals may loosen the straitjacket a little, it would be better to just take it off. As part of the Fiscal Compact treaty, the Council is required to adopt a formal decision on the Fiscal Compact by 1 January 2018 on whether or not to insert it into the EU Treaty. Saraceno and Piga argue: “If a number of important countries were to veto that move, this could set in motion a profound rethink of the appropriate fiscal policy infrastructure supporting the euro zone in future, one consistent with recent developments in macroeconomics.”

The Fiscal Compact has already been proven to be unworkable. The European Council voted last year to adopt the Commission’s recommendation to impose no fines for excessive deficits on Spain and Portugal in a clearly politically motivated decision. The austerity lie is losing its power, with even the IMF and the Commission questioning its benefits after a decade of stagnation. Barry Eichengreen and Charles Wyplosz argue that the attempt to centralise fiscal policy at the EU level is “doomed” and should be abandoned. In a paper on minimum conditions for the survival of the Eurozone, they write: “The fiction that fiscal policy can be centralised should be abandoned, and the Eurozone should acknowledge that, having forsaken national monetary policies, national control of fiscal policy is all the more important for stabilisation.”

by Admin

Witnessing the Catalan referendum firsthand

Below is an account of the visit by an international parliamentary delegation of 33 elected representatives and a number of their advisors to Catalonia, hosted by DiploCat, during the Catalan referendum. While the delegation programme lasted for several days, this account covers only Sunday October 1, polling day. This is not a political analysis of the Catalan referendum but my personal account of what we witnessed.

I left my hotel at 7am on Sunday morning to meet up with the international parliamentary group and our DiploCat hosts. It was still completely dark and pouring rain but I knew thousands of people would have been gathered outside polling stations since 5am to defend them from police attempts to shut them down, which had been rumoured the day before to be scheduled to begin at 5am or 6am.

The international visitors were scheduled to leave in 10 small groups from a central meeting point at 7.30am. I was in a group with Sinn Féin Senator Trevor O’Clochartaigh, Swedish Green MEP Bodil Valero, Welsh member of the Westminster Parliament for Plaid Cymru, Hywel Williams, and Magni Arge, a member of the Faroe Islands and Danish Parliaments for the left pro-independence Republic party. We spent the day with our helpful DiploCat host, a young woman called Irina.

The official plan was to visit three or four polling stations in Barcelona and the surrounding towns; meet the mayor of Solsona for lunch at 1pm; then return to Barcelona by 4pm.

Sarrià-Sant Gervasi

Our first stop was a polling station at a school (Col·legi Orlandai) in the Barcelona suburb of Sarrià-Sant Gervasi, close to Gràcia, where two of the international groups, or around 10 observers altogether, arrived at 8am. It was bright by then and the rain stopped temporarily. Hundreds of people were gathered outside the school, whose entrance gates were closed. They cheered when we arrived, seeing our ‘international observer’ lanyards.

Approaching the first school at Sant Gervasi

Approaching the polling station at Sarrià-Sant Gervasi

Two uniformed members of the Mossos d’Esquadra, the Catalan autonomous police, stood at the edge of the crowd and observed.

We started to speak to some of the voters gathered, sometimes in English and sometimes having the conversation translated by Irina or by Bodil from Sweden, who has fluent Catalan. They said the Mossos had earlier informed them they had been instructed to prevent voting, but that they did not intend to, in the interests of protecting public order and public safety.

Trevor suggested we speak to the officers. I hesitated for a second, not being a big fan of police, having both experienced and witnessed police violence at peaceful public gatherings and rallies on several occasions. But we went over to introduce ourselves. Both were polite and friendly, and chatted comfortably with us in English. One of them, finding out Trevor and I were Irish, told us he had lived in Dublin for close to a year. I asked if it was okay if I took a photo of them speaking to Trevor and they replied, “Of course it is”.

mossos-talking-to-trevor.jpg

Sinn Féin Senator Trevor O’Clochartaigh chats with the two Mossos officers at Sarrià-Sant Gervasi

Some of the assembled voters told us the majority of the crowd had been there since 5am, and that the school was one of those that had been occupied since Friday afternoon. The parents of the kids who attended the school had slept inside the school building on the Friday and Saturday nights. There were three or four young women half-asleep on thin mattresses just outside the building, under the shelter of an overhanging roof. People carefully stepped over them, as did we.

Just then, at around 8.15am or so, the parents began to exit the school building into the waiting crowd, carrying their mattresses and sleeping bags, to cheers and applause.

Internet shut down

Some of the organisers then invited us to come inside the school, and we squeezed through the voters to walk through the gate. The front rooms were set up with desks for ballot papers and ballot boxes, and around a dozen volunteers were working intently on computers and laptops. Voting was due to begin at 9am but their electronic electoral system was down and the entire internet seemed to be down too.

I tried to get online on my phone when inside the school and couldn’t – sometimes my phone would say  ‘No service’ but even when it didn’t, I was still unable to use the internet. I couldn’t get online for hours that morning. It was the same for the other visitors, though some of them seemed to be able to get online for two or three minutes at a time. Outside, one of the organisers called on the voters to all switch their phones onto airplane mode in the vain hope that it was a capacity overload problem, a request everyone quickly and willingly cooperated with.

Someone told us the polling station staff were attempting to get online by using a Belgian proxy; it didn’t work though. We heard through text messages that not only the electronic voting system was down, as was expected, but the entire internet was down at a number of other voting stations too. “Do you think it’s the Spanish government that’s responsible?” I asked one of the frazzled volunteers. She looked at me as though I were a moron and said, “Of course it is.” We both had to laugh.

The voters outside were patient and cooperative, occasionally breaking into chants of “Votarem! Votarem!” (“We will vote!). We could see each other through the gates; organisers outside communicated constantly with those inside, and passed phones, coffees and mini-pastries through to the volunteers. Bodil did an interview with a Swedish journalist holding a recorder through one of the gaps in the gate.

waiting-in-the-rain.jpg

Voters wait in the rain

When it rained, the voters shared large umbrellas through the crowd. At one stage an organiser was lifted on top of someone’s shoulders to call on the voters to clear a path for the elderly, people with special needs and people who had to go to work that day to be able to come up to the front and vote first. Two older women were brought into the school building so they could sit down; an elderly, frail man refused the offer of coming inside and continued to stand outside at the front of the queue using his umbrella to help support himself.

It was at that point that texts began to come through saying there had been attacks by riot police on other polling stations in Barcelona, including some that were close-by.

Shortly before 9am, the two Mossos officers entered the school building, with voters clearing a path for them. They asked the volunteers to assemble so they could speak to them all together. The international visitors hung back but within hearing distance, and Irina and Bodil translated for us.

The Mossos informed the workers that the National Police was attempting to close several polling stations in Barcelona. They repeated what they had told us and the voters earlier; that they had been instructed to prevent the vote from proceeding, but that they were not going to, as their intention was to act in the interests of preserving peace, public safety and public order. They added that if the Spanish police arrived, they would not be able to intervene, but that they would try to act as mediators between the Spanish police and organisers.

Mossos talk to organisers inside

The Mossos officers talk to polling station workers

One of the Mossos then approached the seated older women, crouching down to ask if they were feeling okay, and offered them water. Then they left through the gates, to applause.

The first votes

The volunteers resumed working to resolve the internet problem. I remarked to one of them that the voters assembled outside were incredibly patient, waiting for hours in the rain; no-one was acting annoyed or frustrated at the fact that the polling station was still closed at 10.30, an hour and a half after it was scheduled to open. “They have been waiting their whole lives to vote,” she said. “They don’t mind waiting a little longer.” But anxiety about the possibility of a police attack was growing.

The polling station workers thought that if they had computers with older technology they may be able to connect to a wifi system – so people outside ran home to bring in two or three old laptops and an old PC, which they passed through the gates. At around 10.40am a cheer went up inside the building and we all started clapping – it had worked! They were connected.

One man inside excitedly ran to inform the others, through the gate, that they were connected to the internet and voting was about to begin. “I’m going to be the first to vote!” he yelled excitedly, to laughter. The two elderly women and a handful of others inside took up their ballot papers and voted.

Elderly woman casts her vote

One of the women who came inside to sit down casts her vote

Then the gates opened and the first round of people walked through. Everyone was cheering and applauding jubilantly – the voters outside, the workers inside, us international visitors.

 

The faces of those who came through were still calm and resolute but some became tearful after they voted. It was a really moving moment, and it’s hard to accurately put it in words. The best way I can describe it to say there was an overwhelming sense of dignity about both the moment and the people.

As the voting got underway, our DiploCat hosts organised the two groups to start moving to our next location; we had been scheduled to leave shortly after 9am but had decided to stay until the station opened. The voters lined up outside the school cheered us and said “Thank you!” in English as we left.

At Manresa

We started driving to Manresa, an industrial province of around 75,000 people in the centre of Catalonia, about 45 minutes outside of Barcelona. We had already seen a small number of videos on Twitter of police seizing ballot boxes and beating voters with batons in the brief moments where anyone could connect to the internet in the polling station at Sarrià-Sant Gervasi.

Now we spent the journey uploading our own photos, footage and observations from the morning onto social media, and passing around phones between the seats so we could all view the latest footage of the police attacks – gasping, murmuring “Oh my god,” and exclaiming “Jesus Christ!” as the snippets of film from the other polling stations showed increasingly brutal violence and rubber bullets being fired into defenceless and panicking crowds. It was not just the National Police we saw in the footage anymore but also the Guardia Civil. Hywel was uploading live videos in Welsh to Twitter, describing our visit.

When we arrived in Manresa centre around 11.30am we stopped for a coffee for a few minutes and stood at the bar with our eyes glued to the TV which was, of course, broadcasting the footage from the polling stations. The building in the square were adorned with colourful flags saying “Sí!” and “Democràcia!”, like in Barcelona, and it had stopped raining entirely. Then we walked to a polling station, a school, where the people queuing outside again cheered as we approached. There were still large crowds waiting to vote as we entered at around noon, and spoke to the polling station workers. The National Police had not arrived at the station; the queues were orderly and  the mood bright. Two Mossos stood outside.

Voters queue in Manresa

Voters queue up outside one of the polling stations in Manresa

One of the polling station volunteers offered to walk us around to the second voting station open in Manresa centre, which was nearby, and we agreed. During the walk the volunteer said worriedly to our DiploCat guide, Irina, that the route we were taking to the second site wouldn’t show us the best side of Manresa; Irina translated her concerns while laughing kindly. Relaxing, the local volunteer then joked that we were walking down “Las Ramblas” of Manresa.

This station, too, was busy, but calm and orderly, having received no visit from the National Police or Guardia Civil. Each polling station had a ‘president’ – a coordinator or presiding officer. Many of the volunteers were wearing stickers that identified them as both activists of the ANC (National Assembly of Catalonia) and also of ERC (Republican Left of Catalonia). I spoke to the president at this site in English for some time about how the day had unfolded, and he outlined the same difficulties with their voting system and internet access that we had experienced early in the morning.

I asked him if he was a member of any political party as I was curious as to whether the volunteers were all affiliated to political parties or whether there were also unaffiliated community members and activists. Almost apologetically, he said he wasn’t a political activist, but worked in IT – and that his mother, an ANC activist, had called him the night before to say they needed people with technological expertise as they anticipated hacking attacks. “So here I am,” he smiled.

Baby on shoulders Manresa

Voters wait their turn to enter the polling station in Manresa

As we left, the crowd queuing outside applauded and started chanting “Thank you! Thank you!”. By this stage we had asked Irina to teach us how to say “Good luck” in Catalan, so we replied “Bona sort!” as we left. I grinned to hear a man in the queue describe us as “briagdistas internacionales” as we walked past; he and his friends laughed and waved goodbye.

Waiting in dread at Sant Joan de Vilatorrada

Irina told us there were fears of a nearby polling station being attacked so we drove to another school at Sant Joan de Vilatorrada, just a few minutes from Manresa centre. The atmosphere was different here, subdued. People queued outside, but quietly. There was no cheering.

Inside, the volunteers told us that the polling station had been attacked violently by the Spanish police that morning, before it had even opened. Witnesses told us that the National Police had used a battering ram to enter, and smashed a man’s finger in the door four times, crushing the bone and severing the tendons. They took the ballot papers, boxes and began attacking the voters outside.

A teenage girl explained to us that her and some other voters had run up to the two Mossos present and asked them to do something; they said they couldn’t intervene but called their superior officer who arrived and had a heated argument with his counterpart in the National Police, after which the Spanish police withdrew. The injured man had left hours earlier to get medical attention so we couldn’t speak to him.

On the lookout for police at Sant Joan

Voters wait anxiously following rumours the police were planning to return to the school they had attacked that morning

The organisers and locals were anxiously expecting the National Police to return – they had received encrypted WhatsApp messages from organisers and activists at nearby stations and on nearby roads who reported they had seen around 60 Spanish police officers in the area. The locals knew they didn’t have the numbers to resist another entry attempt by police. We walked up to a perimeter fence that voters and activists had gathered by, all of us peering through warily. An enormous cheer went up as a number of uniformed firefighters walked up the hill together to the school.

Firefighters talking to us by Bodil

The firefighters who outlined the situation to us. Photo by Bodil Valero.

We spoke to the firefighters and others for around an hour, waiting for the police to arrive, but they never did. One firefighter in particular spoke to us at length, describing his view of the general situation. “I’m not very political,” he said. “But we just want to vote. It’s simple.”

Then we heard through WhatsApp messages that the Guardia Civil had attacked another polling station just a five-minute walk away. The firefighters sprinted off down the road as a handful of teenage boys sprinted off another way, obviously knowing a short-cut. Irina said we should think carefully about whether we wanted to try to catch up with the police, but we all quickly agreed we did.

‘I had my hands up’

Our driver zipped us around to the school that was under attack and we arrived to scenes of lines of around 20 Guardia Civil officers jostling voters who had their arms raised. Several Mossos and firefighters formed a line of their own in between the voters and the Guardia Civil.

The people were peaceful but angrily chanting, “No passaran!”, “Catalunya! Catalunya!”. After a tense and angry standoff of around 15 minutes, the police backed off and left.

We were on the street, and couldn’t see the school building through the crowd, so I misunderstood the situation we had walked into. I thought the Guardia Civil had arrived, realised they were heavily outnumbered, and decided to leave. But that’s not what happened – we had got there too late.

They had already smashed down the glass doors of the polling station, seized the ballot boxes and beat a 70-year-old man over the head with a baton – just because he was in the process of voting. As the Guardia Civil left, he was sitting outside being cared for by other voters.

(Below is footage from @QuicoSalles on Twitter of what happened in the moments before we arrived.)

We had all been separated, but the same teenage girl who had spoken to us at the previous school had come running up to find one of the international observers – my Sinn Féin colleague Trevor – who went and spoke to and filmed the injured man. He had had his head split by the baton. “I had my hands up,” he said. “I was voting, I had my hands up.”

We jumped back in the car based on more WhatsApp messages and tried to get to the next site we believed was going to being targeted before the police did, around five minutes away. People were gathered outside anxiously and some were clearly in shock, having arrived from the same polling station we had just come from.

I spoke in English to a teenage boy wearing a Nirvana T-shirt and told him we had just come from the school. White-faced and shaking, he said he had been inside the polling station with his grandfather when the Guardia Civil had burst in and started hitting people with batons. Every few words he would almost choke, finding it hard to speak. “I need to go home,” he said after telling us what he saw.

The firefighter who we had earlier befriended at the first school we had visited in Sant Joan de Vilatorrada came up to us and told us that the organisers had just shut the polling station voluntarily in order to try to prevent an attack. They wanted to protect people from violence and also protect the ballots they had from being seized. It was around 3.30pm. He told us of their standoff with the Guardia Civil and said that like us, the firefighters had arrived too late to do anything to prevent the attack.

“But the fact that you guys and the Mossos got there stopped them from beating the voters on the street after they had taken the ballots,” Magni, the Faroese visitor, said.

The firefighter wasn’t going to be consoled. “Now they are laughing at us,” he said, meaning it both literally – the Guardia Civil had taunted and laughed at them during the stand-off – and figuratively, as in, they had left with people’s votes. He said the words with such a sense of powerlessness and humiliation that, for me, it was the lowest point of all that we observed that day.

As people began to disperse after the closure of the polling station we got back in the car; one of the volunteers had suggested we could drive to the local Spanish police station to see it, perhaps to try to speak with some of the officers. A number of roads were closed, though, so we couldn’t get there.

We saw one of the empty roads closed off by Guardia Civil vehicles and Hywel wanted to go and speak to them and take photos. I told the others that our phones might be confiscated if we tried to take photos because of the (2015) Spanish gag law that, among many other restrictions, banned taking photos of police officers. We all left our phones in the car and walked down to around eight officers who were blocking the road with large vehicles. Bodil translated our questions for them and their responses. She asked why the road was blocked; they replied that it was because someone had been taking photos of the police, which was illegal.

“Because of the gag law,” Bodil replied, provoking protest at the phrase. They said they were “just doing their job”, but then moved one of their vehicles to clear the blockade of the road. We weren’t going that way anyway, so, to the confusion of the Guardia Civil, drove off in the opposite direction.

At Solsona

We had been due to have lunch with the mayor of the town of Solsona at 1pm and were now at least three hours late. Irina insisted that we had to eat something, so we set off further inland to Solsona, another 45 minutes or so away, though I think it’s safe to say all of us had lost our appetites. Back in the car we took turns charging our phones, and passed around the phones in use to see the latest images and footage of attacks at the polling stations. Hywel delightedly informed us that his press officer told him he was trending on Twitter in Wales due to the updates and images he had been sharing all day, which lifted our spirits a little.

festival atmosphere

Voters gather outside in tents and with music playing at Solsona

We arrived at the main polling station in Solsona, a town of around 9,000 people in the province of Lleida, at close to 5pm. The mayor, David Rodríguez, and others came out to welcome us. As well as being the mayor of Solsona, David is also a member of the Catalan Parliament for the ERC, the Republican Left of Catalonia. The polling station was striking for how well organised it was.

Two massive tractors formed the main part of a barricade at the entrance of the centre, and another tractor blocked off a smaller way in on the footpath. You could still enter, but only on foot. There were very large crowds of people gathered on a grassy area outside of the building in a sort of festival atmosphere with some music and tents, and several firefighters, who got an enthusiastic round of applause every time they waked from one place to another.

Tractor barricades

Tractors forming barricades at Solsona

The polling station itself was a large gymnasium-style building. The volunteers inside were on edge and were expecting police to arrive shortly. They were preparing to shut down the station and hide the ballot boxes at the first sign of a raid.

I spoke to one of the volunteers, a young man, at length about their high level of organisation. “We don’t think they will be able to get in,” he said. “We think the doors and walls are strong enough to keep them out, none are made from glass. The only way they could get in is if they use vehicles to smash through the walls.” He paused, realising the absurdity of it, and shook his head, saying, “It’s so strange to talk like this, of vehicles smashing through walls. It’s like a war.”

Trevor with David

Trevor O’Clochartaigh with Solsona Mayor and ERC MP in the Catalan Parliament, David Rodríguez

He explained to me that they believed there were enough hiding places in the building that they could temporarily hide the ballot boxes if the police managed to enter. They had taken the step of stuffing two ballot boxes with empty envelopes and “hiding” them in an easy-to-find spot.

I laughed at the ingenuity. Everywhere we had visited, people were dealing with the problems they faced collectively, with great creativity and even with humour.

David asked us to come and have lunch at a Japanese restaurant, a couple of minutes’ walk away. We were reluctant to leave as people were expecting the arrival of the Guardia Civil, but he assured us we would all return immediately if we heard any reports of their arrival.

He introduced us to the owner of the restaurant, who greeted us warmly and told us he had moved from Japan to Solsona 27 years ago. Then for 30 rather surreal minutes we ate sushi and talked across the table, finishing with more coffee. The owner’s son, around seven years old  and playing outside in an FC Barcelona jersey, kept running up to the window to wave excitedly at us. We grinned and waved back.

David led us back in to the polling station and on the way back I spoke to a young woman who was shortly due to sit examinations to become a judge. She thought there was a good chance that her role in assisting the local referendum process would destroy her chances of becoming a judge, and said that one of her fellow students was too scared to even vote for the same reason. “But it’s worth it,” she said. Having done countless all-nighters for law exams myself I was left in awe.

David told us the organisers were still on stand-by to shut down the polling station. One of our group remarked to him that it must be a difficult decision – to close the polling station early before everyone had had the chance to vote.

“No,” he replied firmly. “There is no question. Our responsibility is to protect these people from violence. If we have to close the voting station early, even if the votes are stolen, the people here will be safe.”

We were scheduled to meet with the rest of the international delegation at 8.30pm to prepare a joint statement about the conditions in which the referendum was held, and both Magni and Bodil needed to get back to Barcelona to do media interviews before that time, so we began the drive back. Irina asked the rest of us if we wanted to take a break or visit another voting site, and Trevor suggested we go to the Josep-Maria Jujol school in central Barcelona – which both of us had visited during the occupation the day earlier. Trevor had also visited it at around 6am that morning and wanted to see how they had survived the day.

Back in Barcelona

There was a huge number of people gathered outside the school, possibly a couple of thousand, and they cheered loudly when we entered. “Gracias, bona sort!” we called back. It was around 7.30pm and they had been undisturbed all day – in my view, because they had the numbers required to deter any police intervention. Excitement was rising that they would manage to make it to 8pm, the end of voting time, without a police attack. Two Mossos walked around the entrance and they too were cheered.

A political scientist who taught at one of the Barcelona universities was the president of the polling station and showed us how they had been dealing with the technological problems in order to ensure the highest electoral standards were maintained.

At Jujol

The polling station president (centre) and other volunteers  speak to the international guests at Escola Josep-Maria Jujol

“We had people changing our IP addresses every 30 minutes to try to stay ahead of the hackers,” he explained. “If the system was down at any particular moment, we would mark people off on the paper electoral roll but put an asterix next to their name. Then when it was up and running again we would enter their names into the electronic system. So there may have been periods of up to 20 minutes at most where the system was down, but it would be virtually impossible for a person to vote twice at different polling stations in that time due to the queues.”

Inside the polling station I ran into a number of Basque friends who were visiting Barcelona in a show of solidarity. I joked darkly to them that they must have felt the same way right then as Irish republicans did when the DUP formed a coalition with the British Conservatives earlier this year – for a brief moment the world’s media attention shone a light on problems and outrageous behaviour that we struggle constantly to draw attention to. Of course this was on an even bigger scale. They laughed in grim agreement.

The author Liz Castro was also at the school, and interviewed Trevol, Hywel and I about what we had observed as we waited for 8pm. She tried to broadcast it live on Twitter’s Periscope feature, but the internet was too patchy, so she filmed it to upload later instead. At about 7.59pm a rumour spread through the building that the police were coming to seize the ballot boxes, causing a brief moment of panic. A minute later we were assured by the tense polling station president that the rumour was false.

Celebrating keeping the polling station open

At 8pm, a huge cry of celebration went up in the crowd outside and they began to sing the Catalan national anthem. They had made it to 8pm without an attack. The school gates were closed as they sang the final bars. (You can watch my video of this here.)

Inside, photographers and media camera crews filmed the two young electoral officers who began the official count of the ballots.

Officials start the count

Electoral officers begin the count at Escola Josep-Maria Jujol

I asked the volunteers if they had heard of any plans for mobilisations in Barcelona that evening, saying we had heard that there would be demonstrations in several cities in the Spanish state against police brutality.

“I’m not a political activist,” the polling station president replied, “so I can’t tell you about the mobilisations outside. My role, and one I take very seriously, is to facilitate the vote of the people here today and to defend those votes. But I can say that as a political scientist, the mobilisation of Catalan society is something that is fascinating to see and something that will not disappear overnight. Of course we can’t keep up this level of mobilisation constantly,” he said as other exhausted volunteers gathered around him nodded in agreement, “but this movement is not going anywhere.”

As we left to get to our meeting with the rest of the international delegation, we walked out behind the electoral workers. The people who had defended the polling station all day – and all weekend in fact, for many – again applauded us. You guys are the ones who deserve the applause, we kept saying as we shook their hands. I don’t think I’ve ever made such an understatement in my life.

@emmaclancy123