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Post Peak Iberia

by Luis de Sousa Wed Jun 11th, 2008 at 09:14:40 AM EST

Updated 13-06-2008 at 19h00.

It all started in Spain, it quickly spread to Portugal and southern France. Lorry drivers are on the streets and on roads protesting against high fuel prices and bringing normal day life to a stand still.


Spanish lorry drivers blocking main access roads to Madrid.

Promoted by Migeru


Crossposted at The Oil Drum : Europe.


[Update IV : 13-06-2008 19h00]

Spotty shortages of fresh goods, petrol and diesel are still enduring. This morning the radio reported that the route connections between Algarve and Andalucía were still being blocked, disrupting fuel supplies to the former region. In Spain fresh goods are still a problem in some supermarkets, with picket lines now blockading access to central warehouses that supply retailers. It is likely that these products will see price hikes during the following days, as supply falls from normal levels.

Up to this fifth day of strike there have been more than 1000 protesters detained by the police and 600 others have been fined for ill driving practices. But on the overall order seems to have been restored and life appears to coming back to normal for the regular citizen.

With 800 thousand people deciding the fate of almost 500 million, the news on the hauliers strike are fading away into background noise. Strikers tiredness and lack of interest by the media will probably give the fatal blow to the protest, by Monday we'll know for sure.

Tonight Europe goes to bed with another institutional crisis in its hands. The big difference this time is that Peak Oil and the associated economic hardship won't wait.


[Update III : 12-06-2008 17h00]

Life is slowly coming back to normal in Spain. A deal was struck between government and representatives of the vast majority of hauliers during last nigh, granting several fiscal and social benefits to the industry, but leaving diesel taxes untouched. The hauliers' associations behind the blockade reunited today after lunch and rejected the government's proposals, vowing to continue protests (the main claim for a minimum service fare remains unattended). Check striker's demands and the government's offers [hat tip Migeru].

The police is on the roads, clearing blockaded routes and facing the picket lines all around the country; there have been insistent reports of arrests throughout the day. Escort is being provided by the police to hauliers that request so, protecting lorries from raging blockaders. There's an all round improvement in traffic. Today's reported actions have been mainly of slow marches that didn't had much impact on the returning normality.

Stores are getting shipments again, although still rationing some high demand fresh goods. Factories are slowly coming back to operation, even if partially, and fuel is reaching filling stations again.

For tomorrow the Spanish association of taxi drivers is calling for a national strike, claiming a fare hike of at least 3 euro cents per kilometre. Negotiations will take place still today to avoid the stoppage.


[Update II : 12-06-2008 08h30]

A few hours ago the Portuguese government yielded, striking a deal with protesting hauliers. While taxes on diesel remain in place, a package of measures was presented by the government that includes reduced toll fares and income tax exemptions, representing a substantial subsidy to the industry. Economic activities non dependent on Spanish trade routes should go back to normal in the next 48 hours.

Meanwhile in Spain a deal has been struck with some hauliers organizations, but not with those in action. Reports of violence are increasing, pierced tires, broken wind shields, cargoes destroyed; yesterday some lorries were set in fire during the night, resulting in serious burns on at least one driver asleep inside. The Spanish government is calling for “cogent” action by police forces against the picket lines.


Click for more pictures of the blockade in Spain.

There are several hundred lorries stranded in Spain, many of them Portuguese. Those holding fresh cargoes are running out of fuel to maintain their goods. Speaking to the media some of the drivers stranded considered leaving their lorries on the road and simply return home by other means.

Elsewhere, Irish fishermen are suspending the blockade to the ports of Cork and Waterford. Belgian drivers are planning action against high fuel prices for the 19th and 20th of the month, considering a blockade of Brussels [hat tip Migeru [editor's note, by Migeru] Elco B].


[Update I : 11-06-2008 21h00]

Lisbon ran out of diesel during the afternoon and petrol will run out still today. Milk, vegetables and fruit are becoming very scarce in stores.

Tow lorry operators have also paralysed south of the Tagus, impairing all on road assistance to motorists. Cars with engine problems are piling up on the road sides all across Alentejo and Algarve.

Farmers and fishermen were also in protest today in Spain, setting demonstrations in several cities of the country. TVE had some sad pictures to show today, with confrontations between the police and demonstrators resulting in numerous injured. At least Madrid is also feeling the same kind of shortages in supermarkets as in Lisbon; fresh meat is becoming an especially scarce product.


High oil prices are impairing one of the most important industries in Europe, road freight transport. Present diesel prices (of which about 60% are taxes) are eating the profit margins of lorry owners. Last Friday a strike started in Spain claiming for help from the government, with some 12 000 transport companies adhering.

During the weekend in Portugal lorry owners called a strike at a national meeting with the main intention of joining the announced actions by the Spanish unions. But at the same time the employed lorry driver's Union was (and still is) in negotiations with the Portuguese government. The Union called on its members to not go on strike so negotiations could continue. Feeling isolated the lorry owners transformed the strike into a blockade.

These owners are mainly small businessmen that operate with their own lorry, the big companies don't seem to be involved. Less than one fourth of the country's drivers are in the protest but the blockade is affecting most of them, the main connections to Spain have been blocked as have the major oil products storage facilities. The objective is clear: bringing the country to a halt.

In many blocking spots protesters are menacing to stone those who may try to break it. Old tyres have been set on fire at road junctions and border crossings.


A blockade picket in Portugal.

In Spain mobilization seems to be deeper, yesterday several access roads to Madrid were blocked. As here, main border routes are being blocked, accumulating lorries in a kind of no man's land. In some places where bolder drivers tried to break the blockade the protesters managed to halt lorries and dumped their cargo. There are news of roads blocked also in the northern side of the Pyrenees, with French protesters mobilizing at least as far as Bordeaux.

Yesterday things heated up between protesting drivers and those eager to deliver their cargoes. One protester was killed in Alcanena, Portugal when a driver tried to break a blockade at an important freight route. Hours later a similar situation happened in Granada, Spain when a van hit a blocking picket also killing one protester. A video digest of Tuesday's protests can be found at Euronews.

From a round on the media these are the main impacts to normal life:

  • Traffic jams are affecting visibly commuter traffic in Spain with Madrid, Barcelona and Valencia being hardest hit.

  • The National Guard has been escorting oil products convoys both to Madrid and Lisbon, densely populated areas that could rapidly dry out of fuel. This morning many filling stations in the northern suburbs of Lisbon had already ran out of diesel and 95 octane petrol.

  • Diesel especially is becoming scarce in many filling stations all across the Peninsula. The Algarve seems to be on of the most hit regions, to where many people travelled taking the chance of an extended weekend to spend a few days in the southern warm shores.

  • Many factories are closing operations for lack of supply of all varieties of goods. Car factories, an important sector in the Peninsula, are already paralysing, lacking parts to continue operations.

  • Fresh goods are disappearing from the supermarket shelves. Yesterday fresh fish was already impossible to find.

  • Milk will be unavailable in less than two days. Producers and storage facilities are dumping milk they can't send to the markets.

  • Poultry producers are running out of feedstock. A massive die off could take place if new supplies don't arrive in the next few days.

  • Fuel supplies were suspended at the Lisbon airport, but up to the moment no flights have been cancelled. Air line companies have been filling their aircrafts at other airports in Oporto and Funchal.
Today other states will join the protest. Irish fishermen are set to blockade Cork's port and Scottish lorry drivers will take the road from Glasgow to Edinburgh on a slow pace, disrupting traffic in Scotland's most transited highway.

How all these actions can impact oil production in Saudi or Russia is hard to envision. Governments will either capitulate and reduce taxes (something that up to now no one seems willing to do) or recur to force and send the guard and the police against the drivers. No option is pleasant, and none will bring the international oil market back into balance.

I can't help feeling that for road transport these are the last breaths of a dying industry.

Display:
Off to the front page with you!

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Wed Jun 11th, 2008 at 09:15:02 AM EST
One of the questions is, why should it be Spain and the UK where the hauliers should strike first, out of the whole EU27?

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Wed Jun 11th, 2008 at 09:37:17 AM EST
I don't know about Spain but in the UK the lorry drivers are the libertarian right wing who believe that all tax is an affront to their dignity that will be wasted by a bunch of left-wing loonies supporting black, gay, disabled, lesbian, whale theatre collectives.

So as far as they're concerned all that has to happen is for the greedy left wing government of gordon Brown to reduce tax on lorry fuel and everything will be fine. Trying to explain to a bunch of semi-literate Sun and Daily Mail reading morons that oil is going up in price cos it's running out and that getting rid of the tax will only delay price hikes by about 6 - 12 months is an exercise in futility.

If their prices are going up, the prices they charge will have to go up. If the price of fuel for fishing boats goes up, charge more for fish (or buy a sail boat). but screaming about the sky being blue is stupid.

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Wed Jun 11th, 2008 at 09:47:38 AM EST
[ Parent ]
Helen:
I don't know about Spain but in the UK the lorry drivers are the libertarian right wing who believe that all tax is an affront to their dignity that will be wasted by a bunch of left-wing loonies supporting black, gay, disabled, lesbian, whale theatre collectives.

And this is not an exaggeration. I overheard a couple talking about a headline last week and the end comment was something not unlike 'Of course if you were a black gay muslim you'd have no trouble getting unemployment benefits.'

This is not as rare as we'd like it to be.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Jun 11th, 2008 at 10:07:37 AM EST
[ Parent ]
I believe one of the problems is that they can't charge more, because they are not really independent.  The major food chains have such a death-grip upon the food distribution networks that fishermen, farmers, and haulers simply can't charge more for their goods, unless they organize collectively and stage a producers strike.

But railing against taxation is much easier.

by Zwackus on Wed Jun 11th, 2008 at 08:19:13 PM EST
[ Parent ]
Spain, Portugal, Southern France, Scotland, Ireland. It's the Celtic provinces rebelling against the Empire.

You might find me At The Edge Of Time.
by Luis de Sousa (luis[dot]a[dot]de[dot]sousa[at]gmail[dot]com) on Wed Jun 11th, 2008 at 11:06:58 AM EST
[ Parent ]
I thought the French celts were in Bretagne.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Wed Jun 11th, 2008 at 01:42:27 PM EST
[ Parent ]
Actually, the celts in Bretagne are ... British. Hence the name.

Un roi sans divertissement est un homme plein de misères
by linca (antonin POINT lucas AROBASE gmail.com) on Wed Jun 11th, 2008 at 07:05:52 PM EST
[ Parent ]
El Pais has a List of demands from the Spanish hauliers. They complain that self-eployed drivers are having to compete with large companies which charge below cost, and that they have been driving for months charging below cost. The Government, they say, has failed to offer a guarantee of a "minimum fare" to "prevent unfair competition".

Only 20% of drivers are on strike in Spain.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Migeru (migeru at eurotrib dot com) on Wed Jun 11th, 2008 at 09:57:22 AM EST
De Morgen: Economie - Belgische vrachtwagenchauffeurs plannen blokkade van Brussel 10/6/08 De Morgen: Economy - Belgian truck drivers plan blockade of Brussels 10/6/08
De Belgische transporteursunie UPTR wil volgende week actie voeren tegen de hoge brandstofprijzen. Een blokkade van Brussel is een reële optie. 'In elk geval is het de bedoeling met trucks naar de hoofdstad te komen', zegt secretaris-generaal Michaël Reul.The Belgian transporteursunie UPTR wants action next week against the high fuel prices.
A blockade of Brussels is a real option.
'In any case it is the intention to come to the capital with trucks , "says Secretary-General Michael Reul.

Their action is planned for 19 or 20 June.
This two days there is a European Top in Brussels.
Same days, Belgian farmers come to Brussels with their tractors to protest the low prices they get.

The struggle of man against tyranny is the struggle of memory against forgetting.(Kundera)

by Elco B (elcob at scarlet dot be) on Wed Jun 11th, 2008 at 10:01:19 AM EST
European Summit.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Wed Jun 11th, 2008 at 10:10:50 AM EST
[ Parent ]
This is probably the fastest way to get into the public consciousness that we have an oil problem, because it will show very quickly the vulnerability of our whole transport and logistics, and it will very quickly appear that the trucking system cannot be helped much, given that they dobn't pay that many taxes on oil, in fact (much less than cars).

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Wed Jun 11th, 2008 at 10:04:16 AM EST
Yes but when food stops appearing in shops, people will notice.

It's a media problem - if it's framed as governments stealing tax money, more subtle points about transport options and policy are going to be lost in the noise.

There's a four fuel delivery strike planned in the UK for Friday. Which is going to be - interesting.

Economically, if truckers really are losing money on haulage, I'm not sure that bankrupting them is an entirely good idea.

What we're seeing now is what happens when infrastructure demand reduction happens quickly when there's no other infrastructure option available to replace it.

Demand reduction is fine in theory, but bankruptcy and possible food riots aren't a good way to manage it.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Jun 11th, 2008 at 10:16:47 AM EST
[ Parent ]
Demand reduction is fine in theory, but bankruptcy and possible food riots aren't a good way to manage it.

Why would you want to manage it? I thought the prevailing wisdom here was that laissez-faire was the way to go?  

Don't like it? Buy a horse. Or a bike. Or magic trains out of your butt overnight. It's all your own fault anyway.

Welcome to the new European Libertarian Tribune.

by Colman (colman at eurotrib.com) on Wed Jun 11th, 2008 at 10:23:51 AM EST
[ Parent ]
Colman:
Welcome to the new European Libertarian Tribune.
Huh. I don't consider myself a libertarian but I do think by and large markets should be allowed to set prices. Compensatory measures should not distort prices.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Wed Jun 11th, 2008 at 10:30:46 AM EST
[ Parent ]
I assume you meant markets that operate within the rules the society decides are required to get the effects we want then.

Compensatory measures always distort prices, don't they?

by Colman (colman at eurotrib.com) on Wed Jun 11th, 2008 at 10:35:58 AM EST
[ Parent ]
No, they don't. Subsidizing people moving out ot the sector doesn't distort the price. It yields to the pressure in a positive way.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Wed Jun 11th, 2008 at 10:41:02 AM EST
[ Parent ]
ASsuming that there's enough left in the sector to do the work required to keep things running in the short term.
by Colman (colman at eurotrib.com) on Wed Jun 11th, 2008 at 10:45:02 AM EST
[ Parent ]
If there isn't then there will be demand for some of those people not to leave the sector, and the price of their service will go up.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Wed Jun 11th, 2008 at 10:50:35 AM EST
[ Parent ]
Doesn't the subsidizing of the delivery mechanism (eg roads) distort the market effect?  
by paving on Wed Jun 11th, 2008 at 01:43:29 PM EST
[ Parent ]
To an extent, but roads are a key infrastructure.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Wed Jun 11th, 2008 at 01:56:31 PM EST
[ Parent ]
So markets don't distort prices of key infrastructure?
by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Jun 11th, 2008 at 02:41:52 PM EST
[ Parent ]
Key infrastructure shouldn't be left to markets.

Like Marek said above about education and health care.

I mean, come on, we're talking about roads here, without which you can't bike from A to B.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Migeru (migeru at eurotrib dot com) on Wed Jun 11th, 2008 at 02:47:17 PM EST
[ Parent ]
And if there's no other capacity on alternative modes of transport, trucking isn't key infrastructure?

This why I don't like 'markets should...' arguments. There's no clean definition of social necessity.

What markets really do is act as amplifiers of political positions. They're not designed to set prices rationally, they're designed to make some people rich and powerful and other people poor and irrelevant.

Is there anything at all which markets do which can't be done better in other ways?

by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Jun 11th, 2008 at 03:04:16 PM EST
[ Parent ]
Setting prices by fiat doesn't quite work either.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Wed Jun 11th, 2008 at 04:23:49 PM EST
[ Parent ]
That's all markets do anyway - they've just voodoo'd everyone into believing that the market price is somehow magically the right one, and government fiat prices are wrong by definition.

As Sassafras said, reality isn't quite that tidy.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Jun 11th, 2008 at 06:40:12 PM EST
[ Parent ]
ThatBritGuy:
And if there's no other capacity on alternative modes of transport, trucking isn't key infrastructure?
Now that's an idea: nationalising the hauliers.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Thu Jun 12th, 2008 at 05:58:59 AM EST
[ Parent ]
Don't see why not, as an emergency measure.
by Colman (colman at eurotrib.com) on Thu Jun 12th, 2008 at 06:04:00 AM EST
[ Parent ]
The problem is that Spain already nationalised coal mining 50 years ago, and then continued to sink subsidies into it and encouraging new people to take up jobs in the sector instead of winding it down. So I could see the same waste happening in this case.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Thu Jun 12th, 2008 at 06:25:46 AM EST
[ Parent ]
By nationalising something you do not take it out of the money economy
by nanne (zwaerdenmaecker@gmail.com) on Thu Jun 12th, 2008 at 08:32:57 AM EST
[ Parent ]
So what to do about this particular case?

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Thu Jun 12th, 2008 at 08:51:18 AM EST
[ Parent ]
What sassafras said - kind of. Social transfers and a plan to give those who become jobless training for new jobs. Starting or expanding government enterprises for the purpose or creating new employment (rail and rail construction being obvious candidates for expansion). In as far as it is needed: I am not sure how large the number of bankruptcies will be.

What should also be done is looking at how the transport infrastructure should be shaped for the future. I think it is plausible that we will see a scenario with much more rail transport, with the final leg being performed by relatively small electric trucks with a limited autonomous range (but also by for instance coopting tramways in cities).

Building big new highways (as Zapatero is doing) will mainly favour mule power...

by nanne (zwaerdenmaecker@gmail.com) on Thu Jun 12th, 2008 at 11:12:34 AM EST
[ Parent ]
powered b y slave galleys of pedalers...
by wu ming on Sat Jun 14th, 2008 at 03:52:16 AM EST
[ Parent ]
Or they'll be driven out by the monopolists who will be able to set their own prices once the independents have gone, and can always threaten to be 'structural' and therefore in dire need of a bailout if they run into problems.
by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Jun 11th, 2008 at 01:53:46 PM EST
[ Parent ]
Markets are a tool, they produce results more efficiently than government action. However, that assumes that the results are desirable and the negative externalities aren't too bad. That's the case here, it isn't always.  In situations where markets will create the wrong result, the government can change the incentives to change the results or step in to run things directly when no amount of rule changing will allow markets to create the right outcome e.g. health care or education.  One shouldn't fetishize markets in either direction.

The demand destruction of higher fuel prices is of the sort we want - changing transport, production, and consumption patterns in the direction of less use of a scarce resource and lower CO2 output. Spain and other wealthy countries are fortunate enough that the immediate pain of demand destruction is in the form of eating something else and spending a bit more for food and other items, rather than starvation. So as you say, help out the small number of people badly hit by the change, and otherwise step back and let things happen. This is really no different than, say, regulations banning logging in old-growth forests where a small group of people end up losing their livelihood and way of life, while the rest of society adapts.

by MarekNYC on Wed Jun 11th, 2008 at 11:19:14 AM EST
[ Parent ]
ThatBritGuy:
Economically, if truckers really are losing money on haulage, I'm not sure that bankrupting them is an entirely good idea.
In Spain it's the self-employed hauliers that are being bankrupted by large transportation companies accepting assignments under costs. In a price war, the side with the deepest pockets wins.

Peak Oil doesn't mean that there will be no road transport, but there will be less volume of it. Some drivers will go out of business or leave the business. It's probably unfortunate it's the self-employed drivers that lose out to large conglomerates.

The Spanish government has offered early retirement to hauliers from age 58, as well as other adaptation measures, in response to the strike.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Migeru (migeru at eurotrib dot com) on Wed Jun 11th, 2008 at 10:25:04 AM EST
[ Parent ]
have they offered relief to retiring owner-operators who likely would be forced to sell their rigs at a loss?

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Jun 11th, 2008 at 10:50:59 AM EST
[ Parent ]
Possibly under the "ICO loans" category below.

"No estamos aquí por gusto" · ELPAÍS.com"We're not here for sport" - El Pais.com
LO QUE OFRECE EL GOBIERNOWHAT THE GOVERNMENT OFFERS
- El Gobierno, tras una semana de negociaciones con el Comité Nacional de Transporte de Mercancías, presentó ayer un documento con 51 medidas económicas, fiscales y sociales.- The Government, after a week-long negotiation with the National Committe of Freight, yesterday presented a document with 51 economic, fiscal and social measure.
- Incluye la aprobación de un proyecto de ley sobre el contrato de transporte terrestre. Incluirá la actualización automática del precio pactado en contrato en función de la evolución del precio del gasóleo y fijará la indemnización por paralización de vehículo a la espera de carga.- It includes the approval of a draft law on land transport contracts. It will include an automatic updating of the agreed price as a function of the evolution of the price of diesel and it will fix a compensation for holding a vehicle waiting to load.
- Ampliación de las ayudas al abandono de la actividad para mayores de 58 años, para la formación profesional y créditos ICO.- Expansion of the aid to abandon the activity for those older than 58, for vocational training and loans from the ICO [Official Credit Institute]
- Aplazamiento de las cuotas a la Seguridad Social hasta 18 meses y la agilización de la devolución del IVA.- POstpoment of the payment of dues to Social Security for up to 18 months and speeding up of VAT reimbursement.
- Reducción de las cuotas por accidente y enfermedad laboral a la Seguridad Social de hasta un 4%.- Up to 4% reduction of the payments tfor Social Security coverage of work-related accidents and sickness.
- Reducción del impuesto de actividades económicas (un 50%) y del impuesto de seguros del transporte.- Reduction of the corporate tax (50%) and the tax on transportation insurance.
- Estudiarán dejar de restar puntos del carné por aparcar en el carril-bus.- [Th epossibility of] not taking off points from the driving license for parking on a bus lane will be studied.
- Se comprometen a defender el gasóleo profesional en la Unión Europea.- Commitment to advocating a "professional diesel" at the EU.
- Se elaborará un plan específico (controlado por la Comisión Nacional de la Competencia) para detectar las prácticas de competencia desleal.- A specific plan withh be elaborated (under control of the National Committee for Competition) to detect unfair competition practices.
- El 80% de los representantes de los transportistas (que no apoyaban la huelga, encabezados por CETM) han aceptado las medidas.- 80% of the representatives of hauliers (those not supporting the strike, led by the CETM) has accepted these measures.


When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Wed Jun 11th, 2008 at 11:05:33 AM EST
[ Parent ]
If they really want to reduce capacity some sort of publicly financed buy-out of redundant capital goods could be a relatively inexpensive way to do this.  The rigs are likely to be a drug on the market just now, and owner/operators with new rigs could be deep under water.  Just because they are a bunch of right wing libertarians doesn't make it right to force them into bankruptcy or the loss of most of their assets.  Does Zapetero's socialism count for anything?

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Jun 11th, 2008 at 02:00:36 PM EST
[ Parent ]
I don't think the Spanish drivers are right-wing libertarians as Helen describes the British ones, but I could be wrong.

Zapatero might be a Socialist but he doesn't know much about economics: he's a lawyer by training.

In fact, looking at this list of measures it seems that they use the same kinds of tools that were deployed to deal with the slump in the construction industry and the popping of the property bubble: delayed tax collection, accelerated tax reimbursements, and in the current case tax cuts on everything except fuel, and ICO loans. Is Zapatero's economic team a one-trick pony, or is the Spanish state limited in its options?

Note the bit about the creation of a separate "professional diesel" fuel category (presumably for tax purposes). This is a key demand of the truckers which ZP is punting to the EU. I suspect Spain cannot introduce a new category with a different tax rate unilaterally without running afoul of the EU's rules on "illegal state support".

I'm a little unsure what you mean by some sort of publicly financed buy-out of redundant capital goods could be a relatively inexpensive way to do this.  The rigs are likely to be a drug on the market just now: what can the State do with a bunch of new rigs?

There was a recent comment by kcurie on some sort of report on freight and rail transport in Spain...

The spanish comission of infraestructure gathered yesterday and we no know the plans for the spanish train network. given the high price oil one would guess it should be first page.. je jeejj keep dreaming. Still, this is why it is so important: oil price moves to food price inflation if food transport is made using roads.
Maybe this is a good time for me to have a look at it so I can speak to whether the Spanish government "really wants to reduce capacity".

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Wed Jun 11th, 2008 at 02:21:10 PM EST
[ Parent ]

what can the State do with a bunch of new rigs?

Give them to the Spanish Army?  Sell them abroad?  Compensate the owners for a portion of their losses? I have no idea who would be hurt most if an owner-operator walked away from his loan and sent the keys to the holder of the loan. If it were large corporations that needed bailing out I'm sure the solution would be much more obvious.  I have no idea how many owner-operators might respond.  In the US this would fly in the face of usual practice which is to cover the losses of the big boys, who don't really need it and where the aid won't really accomplish the objective--capacity reduction.  It is, perhaps, a whimsical idea to try to help small businessmen through a painful transition.  I just wondered if in Spain it might actually be possible and even helpful.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Jun 11th, 2008 at 05:29:40 PM EST
[ Parent ]
I don't have a hotline to ZP's economic team, but the idea is interesting.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Wed Jun 11th, 2008 at 05:52:58 PM EST
[ Parent ]
I'm not sure buying the rigs would be the answer. It could be interesting to offer some form of cannily disguised aid to the independents to drive down the prices of the majors and undermine their monopoly, but that seems to be illegal under EU rules.

Nationalising an independent sector would be a neat trick. I'm not sure it's been attempted before. It's probably illegal too, but it's still a fun idea.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Jun 11th, 2008 at 06:56:42 PM EST
[ Parent ]
Ah, the EU rules to the rescue! Plus ca change, plus ce le meme chose!

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Jun 11th, 2008 at 09:43:19 PM EST
[ Parent ]
Now you know what those to the left of the Social Democrats vote against EU treaties even though they are internationalist.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Thu Jun 12th, 2008 at 05:55:25 AM EST
[ Parent ]
under EU rules. subsidies that distort competition are.

If you nationalise the whole industry, you would simply have to ensure that the domestic industry is not treated better than foreign (European) trucking companies.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Thu Jun 12th, 2008 at 11:10:08 AM EST
[ Parent ]
Sorry to interrupt this absurd discussion of how markets work, but they miss the point.  The volume of trucks on the road reflects the amount of goods that need to move around (unless you actually believe that some truck traffic is due to proud owners who want to drive around to show off their beautiful trucks.)

Demand for truck transport is about as inelastic as possible.  If you bankrupt independent truckers, someone else will have to fill those routes.  There won't be less truck traffic.  Unless...

An alternative scheme for moving goods around is built.  This requires new forms of infrastructure.  This does not happen overnight.  And there is certainly NO historical reason to believe the marketeers will build it.

And now I return you to your wonderful debate on how markets respond.  Have fun, gentlemen.

"Remember the I35W bridge--who needs terrorists when there are Republicans"

by techno (reply@elegant-technology.com) on Wed Jun 11th, 2008 at 02:47:05 PM EST
[ Parent ]
Actually, supply shortages didn't take place because 20% of the drivers decided to strike, but because they blocked the roads.

So there might well be a 25% oversupply of drivers right now.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Migeru (migeru at eurotrib dot com) on Wed Jun 11th, 2008 at 02:49:03 PM EST
[ Parent ]
Demand for truck transport is about as inelastic as possible.  If you bankrupt independent truckers, someone else will have to fill those routes.

No it isn't for three reasons. First of all the truck haulage costs represent part of the final consumer cost, and they vary by good - certain ones will go up more, others less because of things like distance, compactness and weight. Consumers will respond to differential price changes by favoring those goods which cost less in the same general category. So will producers by shifting production location - just as they do with labour costs. Secondly, unless the rails are running at full capacity you can always shift to rail transport for everything except the final stage. The truckers themselves will respond with different patterns (idling less, being more careful about routes, decreasing the amount of non-full loads).

by MarekNYC on Wed Jun 11th, 2008 at 03:01:46 PM EST
[ Parent ]
In addition The volume of trucks on the road reflects the amount of goods that need to move around is not exact either. The volume of trucks on the road depends not only on the amount of goods but on the distance driven and how often thing need to be driven. Changes in logistics (such as moving away from Just-In-time so that more money is spent on warehousing and less on moving) can reduce the amount of ton-miles driven per year. Also, maybe some of the goods we think we need we merely want and can do without. In this crisis the Spanish government cared about fuel, staple foods and supplies for the automotive industry, not about all freight.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Wed Jun 11th, 2008 at 03:07:10 PM EST
[ Parent ]
MarekNYC:
Secondly, unless the rails are running at full capacity

Bingo. I don't know what the situation is in Spain, but rail freight in the UK has very little spare capacity.

Rather than believing in a market utopia, which is the best of all possible worlds and everything balances out in the end, it's more likely that stuff will stop appearing in shops, and when it does appear it will be less affordable.

This will be called 'markets providing lower prices and increased consumer choice', and therefore everyone will be happy.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Jun 11th, 2008 at 03:11:26 PM EST
[ Parent ]
Rather than believing in a market utopia, which is the best of all possible worlds and everything balances out in the end, it's more likely that stuff will stop appearing in shops, and when it does appear it will be less affordable.

 Those goods which require more oil to produce and get to the consumer will see an increase in their price relative to those that require less. In the short term that will shift consumption patterns, in the medium term it will shift production patterns, and in the long term it will shift infrastructure investment patterns. All good things.

That's not believing in a market utopia, but that we do live in a world where costs affect consumption and production decisions. If you don't believe they do, I suggest you wander over to all those thriving British textile factories.

by MarekNYC on Wed Jun 11th, 2008 at 03:20:28 PM EST
[ Parent ]
MarekNYC:
we do live in a world where costs affect consumption and production decisions.

No, we live in a world where politics decides costs and patterns of consuumption and production on the basis of short term returns.

If those textiles are now going to become too expensive to import from China and India again, would it have been smarter to keep prices higher, but industry and distribution sustainable and local, or to throw away the old industries so that a tiny minority could benefit by making an easy buck?

I realise it's not easy to think outside of the ideology, but the first step is realising that is just an ideology, and all of the supposed explanations it offers aren't inevitable, definitive, complete, or even particularly useful.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Jun 11th, 2008 at 06:48:53 PM EST
[ Parent ]
yo, techno, how was this and the other comment deserving of a '2'?
by MarekNYC on Wed Jun 11th, 2008 at 07:28:07 PM EST
[ Parent ]
The great problem of the spanish government is the lack of train infraestructure to compete witht the big conglomerates of trucks.

Right now, we see a concentration process...plus a libertarain strike of the "autonomos"

they want a minimum price plus no tax for oil.

I am afraid the governemnt has to stand by his offer and move on....and probably use the police to save the big boys.

they'd better have those trains ready soon in any case.

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Wed Jun 11th, 2008 at 03:39:41 PM EST
[ Parent ]
... problem. People creating massive inconvenience for consumers are hard to create and maintain sympathy for, and easy to demonise ... just ask strikers with a legitimate grievance that have been successfully demonised over the years.

Well, these are people who are already getting a partial free ride asking for a total free ride just because large sections of their industry are in the process of going obsolete.

"This demonstrates how critical it is to create an integrated EU freight rail system that is able to deliver essential food and material across the European Union, so that we can no longer be held to ransom by truckers demanding a free ride, leaving everyone else in society to pay the bill for the damage they cause to the road, the air, and all the rest".


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Wed Jun 11th, 2008 at 10:29:58 AM EST
[ Parent ]
[... problem. People creating massive inconvenience for consumers are hard to create and maintain sympathy for, and easy to demonise ... just ask strikers with a legitimate grievance that have been successfully demonised over the years.] Ravenna

So true... People already started complaining. What´s "funny" is that they´re complaining that´s there´s lack of certainn products in supermarkets that, so far, are lacking because people got crazy and alarmed and bought too much. For example, people buying cooking oil and conserves...

"If you don't want a man unhappy politically, don't give him two sides to a question to worry him; give him one. Better yet, give him none." (Fahrenheit 451)

by pereulok on Wed Jun 11th, 2008 at 11:35:05 AM EST
[ Parent ]
There's a four fuel delivery strike planned in the UK for Friday. Which is going to be - interesting.

After their experience in 2001, I don't think the Govt are going to allow the strike to cause massive disruption.  I recall hearing (no cite, sorry) that they were only a day or two from sending the army in the break the blockades.  

Funny how they don't seem to have learned that much, though, isn't it.  <sigh>

by jamesg on Wed Jun 11th, 2008 at 10:30:23 AM EST
[ Parent ]
It's not just a media problem, it is also a political problem. No one - aside of a few bloggers and environmentalists - has framed the issue as one of sustainability. Our politicians are just happily joining the blame game with their harping on speculators and their calls on OPEC to increase supply. But instead of blaming these people for not doing more to cut back on our oil habit, the people and the media are calling for lower oil taxes. A sign of vast ignorance, or denial.
by nanne (zwaerdenmaecker@gmail.com) on Wed Jun 11th, 2008 at 11:46:53 AM EST
[ Parent ]

What we're seeing now is what happens when infrastructure demand reduction happens quickly when there's no other infrastructure option available to replace it.

Demand reduction is fine in theory, but bankruptcy and possible food riots aren't a good way to manage it.

Sigh... You'll get no disagreement from me there. I've been saying for a while now that we had to plan for the transition or it would be imposed on us in the most painful way. Seems we're getting there, unfortunately.

I'm not sure what can be done in the short term, but we should get cracking on those infrastructure plans with a bit more urgency whatever else is done.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Wed Jun 11th, 2008 at 06:03:46 PM EST
[ Parent ]
Rubalcaba garantiza el suministro de productos básicos y la circulación en las carreteras · ELPAÍS.com[Spain's Interior Minister] Rubalcaba guarantees basic supplies and roads open to traffic.
El ministro de Interior, Alfredo Pérez-Rubalcaba, ha asegurado hoy que las Fuerzas y Cuerpos de Seguridad del Estado actuarán "con contundencia y firmeza" y "dentro de la ley" para garantizar la libre circulación en las carreteras y la distribución de los principales productos básicos cuando se cumplen tres días del inicio de la huelga de transportistas autónomos contra el alza del gasóleo. Ante los múltiples problemas de tráfico y la amenaza de desabastecimiento en los puntos de venta al público, Rubalcaba ha destacado que ya no hay ninguna carretera cortada, aunque todavía se dan algunas incidencias.The Minister of the Interior, Alfredo Perez Rubalcaba, gave assurances today that the State's security forces will act "firmly and bluntly" and "within the law" to guarantee the free use of roads and the distribution of the main basic products on the third day of the strike by self-employed drivers against the rise in the price of diesel. Facing multiple traffic problems and a threat of lack of supplies to retail sales points, Rubalcaba has highlighted that there are no roads blocked any longer, though there are still some incidents.
El ministro ha hecho balance del operativo especial que su departamento ha puesto en marcha desde el lunes para garantizar el orden público y la distribución de los productos esenciales. Entre ellos, ha citado los combustibles, el material médico, los alimentos de primera necesidad y el apoyo a algunos sectores industriales, como el de la automoción, que se ha visto obligado a parar su producción en toda España.The minister gave a balance of the special operation that his department has set in motion since Monday to guarantee public order and the distribution of essential products. Among them, he mentioned fuels, medical supplies, staple foods and the support to certain industrial sectors such as automobiles, which has been forced to halt production in all of Spain.
En este sentido, Rubalcaba, tras recordar que los piquetes que han condicionado el tráfico desde el inicio de la huelga son "ilegales", ha informado que han sido detenidos 51 camioneros en toda España por alteración del orden público o resistencia a la autoridad. De ellos, los últimas 31 arrestos han tenido lugar en la A-1 durante el desalojo del piquete que mantenía bloqueado los accesos a Madrid por la carretera de Burgos.In that sense, Rublacaba, after recalling that the pickets which have altered traffic since the start of the strike are "illegal", has reported the arrest of 51 lorry drivers across Spain for disturbing the public order or resisting the authorities. Of them, the last 31 have taken place on the A1 during the removal of the picket which kept the access to Madrid along the road from Burgos blocked.


When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Wed Jun 11th, 2008 at 10:21:45 AM EST
I was hoping for some analysis, since I'm confused. In a normal free market system if your costs of production go up you raise your price.

If the fishermen or truckers are not getting enough money from their catches or services then why don't they work on the end of the lever where they have control? I don't understand the idea for government intervention. It appears that demands are a jumble of tax elimination and fuel subsidies or rebates. This spreads the costs to the consumers anyway, just indirectly through higher taxes elsewhere or lower services.

There was a similar story today about several US airlines rolling back fare increases because they couldn't get them to "stick". This implies that other carriers are able to still make a profit at the lower fare structure, or that they can carry a loss long enough to drive the weaker firms out of business.

If there are constraints on cost increases I hope someone will explain what they are.

Policies not Politics
---- Daily Landscape

by rdf (robert.feinman@gmail.com) on Wed Jun 11th, 2008 at 10:36:12 AM EST
I'm guessing here, but I expect that the price of haulage is largely dictated by a small number of powerful supermarkets in the same way that prices paid to farmers are.

Larger firms trying to drive out the independents is also quite possible.

by Colman (colman at eurotrib.com) on Wed Jun 11th, 2008 at 10:39:20 AM EST
[ Parent ]
At least in the Spanish case, the hauliers on strike are self-employed and make up 20% of the total. They claim that there has been a price war for months now, and that the large transportation companies are charging below cost and driving them out of business. One of their key demands is a government regulation of road transport fees to prevent charging below cost.

At least that's what I gather from the El Pais stories I have quoted in other comments.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Migeru (migeru at eurotrib dot com) on Wed Jun 11th, 2008 at 10:39:49 AM EST
[ Parent ]
In general competing firms can't raise prices unilaterally because they'll lose business.  So the game is that it's a waiting game till the least-efficient go bust.  Their competitors then buy them or pick up their business, and only then can they raise their prices.  
by jamesg on Wed Jun 11th, 2008 at 10:40:59 AM EST
[ Parent ]
These are classic examples of Perfect Concurrency Markets. The small business owners operate on virtual zero profit, in normal conditions the income is just enough to cover costs.

The recent fuel price increases are a signal that the market will have to shrink. The small companies are the ones with less room to deal with it and are the first to go down.

You might find me At The Edge Of Time.

by Luis de Sousa (luis[dot]a[dot]de[dot]sousa[at]gmail[dot]com) on Wed Jun 11th, 2008 at 11:11:02 AM EST
[ Parent ]
In a normal free market system if your costs of production go up you raise your price.

That assumes a stable ratio between demand and supply and wholly variable costs.  In other words, it assumes that the seller of services can choose to sit on his/her hands and do nothing/lose nothing rather than operate at a loss.

Real life isn't quite so tidy.  The lease payments on the rigs have to be made whether you work that week or not.   So you can't afford to turn down any work that pays more than the cost of the diesel, because £5 towards the repayments is better than £0.

(In fact, you possibly can't afford to turn down work that pays less than the cost of the diesel, because you want to be at the front of the transport manager's mind when the market, you hope, picks up.)

And the supply/demand ratio isn't stable.  There's an oversupply of drivers, which is only going to get worse as the cost of fuel forces supermarkets to take a look at their food miles, and that's also driving the price paid to the hauliers down.

I feel incredibly sorry for them.  Many of these drivers will have the financing for their rigs secured on their houses.  We do need a lot less trucks on the roads, but that's going to be made up of an awful lot of personal tragedies.

To me, it's a situation analagous to the fishing industry.  The independent hauliers have capital sunk into a business that just isn't viable any more, is in all our interests to reduce, and they deserve a fair subsidy to get out of it.

by Sassafras on Wed Jun 11th, 2008 at 01:03:30 PM EST
[ Parent ]
To me, it's a situation analagous to the fishing industry.  The independent hauliers have capital sunk into a business that just isn't viable any more, is in all our interests to reduce, and they deserve a fair subsidy to get out of it.
You're so right.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Wed Jun 11th, 2008 at 01:32:33 PM EST
[ Parent ]
A fair subsidy to get out of it, but not to continue in it (by subsidizing costs in some way). I am afraid that government intervention will be in the direction of maintaining the activity and not phasing it out.

We are choosing the path of most (long term) pain...

by t-------------- on Thu Jun 12th, 2008 at 10:42:07 AM EST
[ Parent ]
rdf:
In a normal free market system if your costs of production go up you raise your price.

There's no such thing as a normal free market system.

It's like pre-Copernican astronomy - the planets move in circles, but there are epicycles which predict the real orbit. Even so - the planets really move in circles, and the rest is just details.

Only - not.

Economics won't start to make sense until there's a realisation that markets are seriously fucking stupid herd psychology at the best of times, and outright Marie Antoinette special pleading at worst.

Expecting them to be rational, predictive or sane - never mind socially literate - is like trying to have an argument with a drunken moose.

The very idea of markets should be a philosophical embarrassment along the lines of Phlogiston, Lysenkoism and really bad boy bands.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Jun 11th, 2008 at 02:56:13 PM EST
[ Parent ]
We shouldn't be laughing about such a terrible topic, but you have a way with words and metaphors, TBG.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Wed Jun 11th, 2008 at 06:05:24 PM EST
[ Parent ]
Lots of conjecture on what is behind the strikes, but not much in the way of solid evidence.

When people are outraged and fixate on the wrong cause for their anger the results are seldom good. In the most extreme cases we see genocide when an ethnic group is blamed for the ills of society.

In less extreme cases we see symbolic actions (such as rounding up law-abiding, employed, but "illegal" immigrants in the US and then suffering from labor shortages) which do more harm than good.

If civil unrest gets bad enough and force doesn't work (it hasn't been tried yet, but military escorts of essential commodities to cities seems a likely next step) then governments will throw some money at the protesters, or at least promise to do so.

It seems that most of the reasons posted for the protests point to small producers being in competition with big quasi-monopolies. Breaking up the monopolies would take too long and be doubtful anyway, putting in minimum prices for some services or commodities might be a short-term way to get the protesters back to work, but the bottom line still seems to be too many marginal producers with too little organizational power.

During the farm crisis of the 1870's in the US the railroads and grain mills put a squeeze on the growers. The result was the rise of the Populist movement and an attempt at political action aimed at breaking up the "trusts". It failed, but the ideas were now part of the public discourse and the effort succeeded under Teddy Roosevelt 35 years later. I don't think the truckers and fishermen are prepared to wait.

It would be wise if they formed some sort of political action group now to represent their interests. Since EU countries have more than the two parties of the US they might even be able to get some political power in the short term.

They seem to know the symptoms of the disease, but not the cause. A lack of what used to be called "political consciousness".

Policies not Politics
---- Daily Landscape

by rdf (robert.feinman@gmail.com) on Wed Jun 11th, 2008 at 04:30:44 PM EST
[ Parent ]
No evidence? Knock yourself out. We've said nothing to contradict the following.

"No estamos aquí por gusto" · ELPAÍS.com"We're not her for sport" - ElPais.com
LO QUE PIDE EL SECTOR EN HUELGAWHAT THE SECTOR ON STRIKE DEMANDS
- Las principales asociaciones empresariales que han convocado la huelga (Fenadismer y Confedetrans, representantes del 20% del sector) aseguran que no quieren "ayudas puntuales, sino medidas para que el sector pueda enfrentarse a la crisis".- The main business associations behind the strike (Fenadismer and Confedetrans, representing 20% of the sector) claim that they don't want "momentary measures, but measures for the sector to confront the crisis"
- Tarifa mínima. Las principales asociaciones convocantes aseguran que llevan meses trabajando por debajo de los costes. Piden que se establezca una tarifa mínima que obligue a todos a trabajar por un precio mínimo, y evitar así competencia desleal.- Minimal fee. The main associations [behind the strike] claim that they have been working below cost for months. They demand the establishment of a minimal fee requiring everyone to work of a minimal price and thus prevent unfair competition.
- Gasóleo profesional. Exigen un "verdadero gasóleo profesional", es decir, con impuestos reducidos, como el del transporte marítimo o aéreo.- Professional diesel. They demand a "true professional diese", that is, with reduced taxation like sea or air freight.
- Revisión de tarifas. Que sea obligatorio por Ley revisar las tarifas según las subidas del precio del petróleo.- Revision of fees. Legally mandated revision of fees to match oil price increases.
- Eliminación del céntimo sanitario. Que las comunidades autónomas que aplican este gravamen por litro de gasolina (de hasta 2,4 céntimos por litro) lo supriman. Se paga en la Comunidad de Madrid, Comunidad Valenciana, Cataluña, Asturias, Galicia y Castilla-La Mancha. Su recaudación se utiliza para financiar la sanidad.- Abolishing the "health care cent". That regional governments which apply this tax on fuel (up to €0.024 per litre) suppress it. It is paid in the Regions of Madrid, Valencia, Catalonia, Asturias and Galicia and Castilla-La Mancha. The revenue is used to fund health care.
- Medidas de reestructuración. Un paquete de medidas sociales, económicas y fiscales que "beneficien a autónomos y pymes del sector ante la actual situación de crisis económica".- Restructuring measures. A package of social, economic and fiscal measures "benefitting the self-employed and SMEs in the sector facing the current economic crisis"
- Los convocantes de la huelga consideran que las medidas presentadas por el Gobierno siguen sin garantizar que no se trabaje por debajo de costes.- The organizers of the strike believe that the measures presented by the Government still don't guarantee that there won't be work below costs.


When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Wed Jun 11th, 2008 at 04:45:20 PM EST
[ Parent ]
I take back my remark about lack of political consciousness. Now what they need is to figure out how to get their goals implemented in a hostile environment.

The canonical example of ineffective(?) action seems to be 1968 (1848?). Have activists learned anything since then? They certainly haven't in the US.

I don't want to sound like a social Darwinist, but subsidizing marginal producers is not a viable long-term strategy. It won't be effective and may even violate EU policies. If the real cause of price constraint is monopoly power then that's where the focus should be.

Of course when the cost of fish and transported food go up the riots will just shift to the supermarkets! (wink.)


Policies not Politics
---- Daily Landscape

by rdf (robert.feinman@gmail.com) on Wed Jun 11th, 2008 at 05:08:05 PM EST
[ Parent ]
Now we're getting somewhere
subsidizing marginal producers is not a viable long-term strategy. It won't be effective
I did some research in 2004 about the failure of Spain's subsidies to coal mining and ship building. I should dig them up. That research convinced me that any money spent on direct subsidies is best spent on helping people switch to other areas of economic activity.
and may even violate EU policies.
I have posted in another comment a translation of a summary of the Spanish government's policy proposal. The truckers' demand for a "true professional diesel" (with different taxation) has been met by a promise to "push it at the EU", presumably (my best guess here) because it violates EU rules on State aid. If I remember correctly, there was some proposal by Sarkozy recently to eliminate VAT from fuel or something like that and it had to be done at EU level
If the real cause of price constraint is monopoly power then that's where the focus should be.
When the British hauliers protested last week it was pointed out that the reason they couldn't charge more was that supermarkets were using their monopsony power to squeeze the truckers' margins. In Spain it does appear as if a few companies representing 80% of the drivers are using their oligopoly position to squeeze the independent drivers. Definitely in both cases there's a case for the competition authorities to look into the matter. The Spanish government has promised to do that (see the same comment I referred to above).
Of course when the cost of fish and transported food go up the riots will just shift to the supermarkets! (wink.)
Nobody's disputing that things are going to get more expensive. Now the question is how to help people on low incomes who may get squeezed out of buying food.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Wed Jun 11th, 2008 at 05:20:19 PM EST
[ Parent ]
I think this problem has also arisen in the U.S. where small haulers (typically owner-operated) work in a different environment than large ones.

For example, large shippers can arrange it so that trucks never move when empty, but independents can't. Large shippers negotiate extended contracts with their customers and include fuel surcharges that average out temporary fuel cost changes. Large shippers can buy fuel in larger quantities and get a lower (comparative) price...

by asdf on Wed Jun 11th, 2008 at 04:52:03 PM EST
[ Parent ]
I went to the supermarket after lunch. Milk, fruit and beer(!) are the goods in greater lacking.

The were no pears and I took one of the last bunches of bananas. Apples were close to over as so pineapples. There wasn't a single fruit variety selling for less than 1.5 €/kilo, usually my price top.

Alcohol free beverages were also lacking, bottled water, gasified juices, etc, all in lower quantities than usual; but it was in the beer section that the shortage was more visible with just a single 6 pack available for some varieties. No diary milk to see also.

There was some fresh fish, but only the bigger grades. Friday Lisbon celebrates Saint Anthony's day, when sardines are a traditional dish. It seems this year there won't be any.

Bread and bakery in general were still plentiful.

At 5 o´clock Portugal plays against the Czech. Will there be enough beer for the event? I better get one asap.

You might find me At The Edge Of Time.

by Luis de Sousa (luis[dot]a[dot]de[dot]sousa[at]gmail[dot]com) on Wed Jun 11th, 2008 at 11:27:02 AM EST
There wasn't a single fruit variety selling for less than 1.5 €/kilo, usually my price top.  

That would lead to a rather limited diet for me courtesy of what NYC commercial rents do to prices. Actually that's not quite true, market power matters as well, which explains why supermarkets in poor neighbourhoods offer poorer quality produce at higher prices than the higher rent affluent areas.

by MarekNYC on Wed Jun 11th, 2008 at 03:06:14 PM EST
[ Parent ]
Also aviation suffers from high fuel prices.
Carriers are desperate and looking everywhere for relief.

I found this today:
Aviation Week : Crandall Calls For Re-Regulation

Decrying the "sad state" of U.S. commercial aviation, former American Chairman and CEO Robert Crandall yesterday declared three decades of deregulation a failure and said that treating airlines like a regulated utility must be a part of a broad solution to their current financial crisis.

"We have failed to confront the reality that unfettered competition just doesn't work very well in certain industries, as aptly demonstrated by our airline experience and by the adverse outcomes associated with various state efforts to deregulate electricity rates," Crandall told aviation and financial industry professionals gathered at the Wings Club in New York City.

"It's time to acknowledge that airlines look and are more like utilities than ordinary businesses."




The struggle of man against tyranny is the struggle of memory against forgetting.(Kundera)
by Elco B (elcob at scarlet dot be) on Wed Jun 11th, 2008 at 11:55:08 AM EST
Yeah, but we don't even treat our regulated utilities (power, telephone...) like regulated utilities.
by asdf on Wed Jun 11th, 2008 at 04:44:34 PM EST
[ Parent ]
This might be an unusually stupid question but I will ask it anyway.

Has anyone realized that the Rio Tejo is one of the largest highways in the country?

True, water-borne shipping requires its own fuel, but what is preventing Portugal in particular from developing an ad hoc river transport network even if to just get raw meat and other foodstuffs into town?

I ask partly because I live in Monterey, California, just blocks from the oldest port in the state. Every time I pass it I realize that for most of our 240 year history that was how trade was conducted - by water. We need to rebuild our rail network as well, but it seems that water transport could be a viable method of moving goods, even if it cannot replace trucks or rail freight.

Something to think about, if nothing else...

And the world will live as one

by Montereyan (robert at calitics dot com) on Wed Jun 11th, 2008 at 07:04:22 PM EST
The Tagus is only navicable up to the Portugal/Spain border. Spain has some canals, but not many.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Thu Jun 12th, 2008 at 02:31:44 AM EST
[ Parent ]
rdf said it, then retracted it, but in my judgement, it's true:

this is a problem of (lack of) political consciousness.

a ruling class that does not care, an apathetic voter turnout, and corporate controlled mass media keeping the public muddled and mired in trivia.

then what happens is people get too lazy to look deeply and deliberately at the forces that govern them, and that fact is turned into profit for the few..

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Thu Jun 12th, 2008 at 02:59:53 AM EST
He was attributing the lack of political consciousness to the drivers.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Thu Jun 12th, 2008 at 06:03:38 AM EST
[ Parent ]
yup, i got that.

p'raps i should have said 'geological consciousness'.

what i think rdf meant by 'political consciousness' was that they don't see the lines of power that run through societies, and therefore have delusional expectations.

i might have completely misinterpreted the phrase though...

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Thu Jun 12th, 2008 at 03:16:13 PM EST
[ Parent ]
Your "Update II" doesn't square with what the Government is saying. Might it be a disinformation campaign to make people believe supplies are coming so they don't engage in more panic buying?

Normalidad en las carreteras y 71 camioneros detenidos en el cuarto día de paros · ELPAÍS.comNormality on the roads and 71 arrested truckers on the fourth day of stoppages - ElPais.com
Las carreteras españoles están "compleamente limpias" y sólo presentan "el tapón normal de un día normal de tráfico", ha asegurado hoy el ministro del Interior, Pérez Rubalcaba. Así, el cuarto día de huelga de los transportistas por la subida del gasóleo ha amanecido con los accesos a las grandes ciudades y los puestos fronterizos abiertos y sin bloqueos mientras la cifra de detenidos por desórdenes por las movilizaciones desde el lunes asciende ya a 71.Spanish roads are "completely clean" and only present "the normal clogging on a day with normal traffic", the Interior Minister Perez Rubalcaba assured today. Thus, the fourth day of strikes by the hauliers on the rise of diesel prices has dawned with the access routes to the main cities and the border posts open and without blockades as the figure of those arrested on charges of disruption for the actions taken since Monday rose to 71 already.
Además de la ausencia de "problemas reseñables" en las carreteras españolas a las 08:00 horas de hoy, Interior ha destacado que el número de escoltas que las fuerzas de seguridad han tenido que realizar a camiones para garantizar el funcionamiento de los servicios públicos y el abastecimiento de los mercados es ya de 6.025.In addition to the absence of "remarkable problems" on the Spanish roads at 8am today, the Interior Ministry has highlighted that the number of escorts that the security forces have had to provide to lorries to guarantee the functioning of public services and the supply to markets is already 6025.
Asimismo, Rubalcaba ha reiterado en declaraciones a la Cadena Ser que el 82% de los transportistas que no secundan los paros tendrán una escolta para garantizar que pueden llevar a cabo su trabajo. "Los piquetes no pueden imponer sus tesis al resto de profesionales que no apoyan las movilizaciones", ha asegurado Rubalcaba.Likewise, Rubalcaba has repeated in statements to [radio station] Cadena Ser that the 82% of hauliers not following the stoppages will have an escort to guarantee that they can carry out their work. "Pickets cannot impose their theses to the rest of the professionals who don't support the action", asserted Rubalcaba.

Again, it appears that the shortages are a result of the blockades and not of lack of transport capacity. Does this mean that there is 20 to 25 overcapacity in Spain's road transport sector?

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Migeru (migeru at eurotrib dot com) on Thu Jun 12th, 2008 at 06:18:35 AM EST
This morning the radio had some interviews with stranded drivers in Spain reporting a very tense environment. More lorries were burnt tonight.

The most recent news pieces in the Spanish press are reporting a new day of fight:

Transporte Mundial:

"These associations [that have not accepted the deal with the government] have not called off the strike and the conflicts on the roads continue."

But is seems that traffic is running better today than yesterday. Anyway keeps us informed on it, if you see the situation changing markedly.

You might find me At The Edge Of Time.

by Luis de Sousa (luis[dot]a[dot]de[dot]sousa[at]gmail[dot]com) on Thu Jun 12th, 2008 at 07:14:25 AM EST
[ Parent ]
That's what I don't know. Is the Minister of the Interior telling people it's over when it's not, to prevent panic buying?

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Thu Jun 12th, 2008 at 07:21:29 AM EST
[ Parent ]
20 to 25 overcapacity

I mean 20 to 25 per cent.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Migeru (migeru at eurotrib dot com) on Thu Jun 12th, 2008 at 07:22:35 AM EST
[ Parent ]


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