European citizenship

Following the extensive discussion around new European countries resulting from secession, legal or illegal, that are already members states now I found it necessary to seek legal references exist on this controversial topic.

Well, in fact I don't believe it is controversial, since the Lisbon EU Treaty, clearly states what's the definition of the concept of European Union citizenship.

Article 20 (ex Article 17 TEC) provides in paragraph 1 that:

"It creates a citizenship of the Union. Shall be a citizen of the Union every person holding the nationality of a Member State. Citizenship of the Union shall be additional to national citizenship and shall not replace it."

So is being a citizen of a member country which European citizenship gives you and not the other. If you stop being a member state of the European citizenship is lost.

More wood, this is war¡¡

It not seems that the storm will abate in the coming days, quite the opposite.

The various factors that have converged in this May are too important to fade down the road without being lost some more feathers.

It is these moments when you most envy the Americans: polls every four years, a monetary policy that conforms to what the economy needs, not an economy that is set by definition, clarity of ideas, leadership, etc..

In contrast here in Europe continue to insist on the same recipes check despite not working, too much ego at stake and too Calvinist morality, too many elections and too many interests and the rating guys of "Insist and insist in the same way."

The only alternative is a federal Europe, but there is currently no politician with sufficient size to lead the necessary step forward.

How long we wait to decide who should decide? That clean up and clean out, everything else is quite simply a waste of time and money. If he had already done a couple of years, the only difference is that the bad times and we had taken us.

The wasted years

The markets may not go down well at the recent measures taken by the spanish executive, probably because they realize that they will not be much use, at least in the short term. It will not improve employment, will not improve the consumer, will not improve growth, will not improve the deficit (which makes sense since it is based on everything else). Budgets are fears that become applicable after the summer, so it has installed a sense of "another lost year".
It wasn't 2011, not 2012, it is doubtful that the 2013 and probably the start date of light recovery is 2014 or 2015. Overall, a waste decade for everyone. Those who have no work now, nor will in the coming years, so when the economy recovers it will be unrecoverable.
Whether you are young, because then it will be another cohort willing to take his place in the pyramid, and for the seniors, if they are now in an age when companies do not look at them, within 3 years and will flesh retirement 10 years although they are active. In economic terms this is called obsolescence, although the equipment to operate, companies prefer a new one, although it makes the same function have to look again, to be "cool", we like the Ipad, we started to the labour market and, at the same time, we are history .

The graph of the Ibex-35 does not inspire any hope, only the long-term support (7700) resist, if not, the fall can be historical. Anyway we are not alarmists, the trend is most likely the laterality until they clear up doubts.
We'll always have the option, if the Ibex 35 drops too low, that we can sell the whole countrie to China, and then he would be the way to be part of the EU, without meeting the convergence criteria and solve the problem of autonomic deficits: the Tibet's way.

The Ides of March

I am a little concerned, although it seems that no matter how bad the news that appears, and that the market remains above the supports, approaches spring, or whatever it is, the Ides of March. The oldest of the place have always attributed a character bass in late winter and early spring, will be it that alters blood. The truth is that I prefer to think as M. Twain and hope that this month is as good or bad as the others.

The Ibex, despite everything, is below the resistance line, an area that in recent months has been impossible to penetrate. The indicators are somewhat overbought so, barring any positive surprise, it not seems that there will be a break immediately.

The finding by Rajoy that is impossible that what is impossible, despite the tenacity Calvinist from Central Europe, and the unstoppable rise in unemployment; the measures taken are not going to give short-term results, especially for what it really reduces the unemployment is growth, and I fear it is the only one not expect. As the pendulum rule requires, in addition, ministers are now more than ash and give no joy to anyone.

Moreover, the evolution of certain commodities, especially oil, threatens to end to screw the little hope there, that the rest of Europe to grow and pull us.
Bad times for poetry.

Mediterranean axis and carnival

There should be a product of chance that one of the most budget ministers handled has been dropped by Barcelona during the week of Carnival.

Carnival is fun anticipating the period of Lent, dates on which Christians are taking a hard period of reflection and penance before the week of passion (Easter).

The carnival comes probably from pagan festivals like the feast of Dionysus Greek or Roman the Bacchanalia. A festival in other words.

Well, in this healthy environment, we had the visit of Mrs. Pastor, who before the cluster of accidents in the suburban rail network in Barcelona, ​​has come with its cornucopia before "Mardi gras" and has offered, bountiful, plenty of investment (on paper) to unclog the delays endemic to the rail network in Catalonia. Among others also came to reaffirm the government's interest in promoting the Mediterranean axis, the structure of vital importance not only for Spain but throughout Europe, as it would bind using a communication channel, high-capacity North Africa through Morocco to northern Europe.

So far nothing abnormal, the problem has jumped at once that the minister has removed the mask to say, pleased himself, that central government support as a priority the construction of railway infrastructure, but instead of using the natural step of the Mediterranean, which also includes the most important Spanish ports from the point of view of commercial activity, Valencia, Tarragona and Barcelona, ​​would support a priority axis passing through Madrid and then through the Pyrenees. The crossing of the Pyrenees would be done through a tunnel of new construction of over 40 km long and budgeted (now) at over 6,000 million euros.

The problem is not, as the minister said that in other parts of Spain are also entitled to be a priority, because that experience and have lived with the AVE that we have mistaken for the Metro. This is rationally make the investment needed to boost the country and be competitive. Pass the train through the center of Spain is not an efficient decision and Brussels, reject it last year.

All you get with this nonsense is that large projects will always stop to have clear ideas and entertain least try to please everyone. At the end is always a question of leadership, as in previous years, you are missing a lot right now.

Ratings

Europe during the Middle Ages lived the scourge of the Inquisition, were times of religious persecution in which to prove that there wasn't demoniac was a difficult undertaking, since it had to survive the "judgments of God," torture by the which could only be saved by divine intervention, as it was physically impossible to save.

Something similar happens to us today, countries can not escape the inquisition courts organized by the rating agencies.

Just today, the governor of the Bank of France, also is a member of the ECB, has once again questioned the objectivity of the above agencies to the new threats that have been announced with great fanfare. Threats, curiously, raged just before the EU Summit and after the covenants laid down by them.

They are responsible for continually sabotage any progress, however minimal, putting everything into question. It also states that agencies have a bias because they "forget" that the UK is probably worse than their European counterparts former (the UK are not Europe).

This afternoon, S & P has also lowered the rating to 10 Spanish financial institutions, including CaixaBank, Sabadell and Popular.

Not content with the reduction has already warned that in the next four weeks can drive them to downgrade again.
What has changed in 4 weeks? Why does this leak? What do they know or do not know?

The following table represents the historical probability of default depending on the rating assigned.

As you can see is corporate and municipal bonds. The level of "investment grade" is lost below BBB.

The rating is assigned to CaixaBank A to S & P assigned a default rate of 3%.

Importantly, in the worst cases, the default rate for speculative assets, junk bonds, is 42.35%. Less than half, so not quite understand the panic generated by any redevelopment except that the problem is that nothing seems to add up.

Cumulative Historic Default Rates (in percent)

Rating categories	Moody's		S&P
	Municipal	Corporate	Municipal	Corporate
Aaa/AAA	0.00	0.52	0.00	0.60
Aa/AA	0.06	0.52	0.00	1.50
A/A	0.03	1.29	0.23	2.91
Baa/BBB	0.13	4.64	0.32	10.29
Ba/BB	2.65	19.12	1.74	29.93
B/B	11.86	43.34	8.48	53.72
Caa-C/CCC-C	16.58	69.18	44.81	69.19
Investment Grade	0.07	2.09	0.20	4.14
Non-Invest Grade	4.29	31.37	7.37	42.35
All	0.10	9.70	0.29	12.98

 One last fact, these are the probabilities of the bonds issued by municipal entities and corporate that have historically had actually default experiences. In the case of countries, should we assign the same probability or is even smaller?

In Spain we are talking (AA-) of a lower default probability of 1.50%. Does it explain the spread is likely to be paid in relation to German bonds?.