OXFORD: European Reunion, Madrid–Trinity Dinner

Trinity College Dinner, Madrid, April 26, 2013. Real Gran Pena Club. L to R:
Andrew Moore, reunion organizer. Andrew Hamilton, Vice Chancellor of
Oxford. Sir Ivor Roberts, President of Trinity. Alice Tepper Marlin. Sir
Roger Fry, founder of many schools in Spain. Photo by JT Marlin.

MADRID, April 27 - Alice and I are attending the European Reunion of the Oxford University Society. 

Trinity College sponsored a dinner for its alumni yesterday, with its President presiding. Other colleges that did not have their own dinners were invited to Trinity's. 

So Paul Lewis, long-time New York Times correspondent, attended the dinner -  with his global-finance columnist wife Vivian - even though he is a Balliol man. Balliol has other things on its mind - its 750th birthday party.

The dinner was held at the Real Gran Pena Club. The club building is a fine example of traditional Spanish magnificence. One of the lectures this weekend was on the Spanish Golden Era, which was viewed as both a time of artistic exflorescence and a period of decline, as an opulent mentality grew up alongside the flow of silver from Spain's Latin American colonies. The Gran Pena is the club of both the Royalist fan club and the Loyalists. As it was explained to me:

The Loyalists would have been Royalists, if the person next in line for the throne wasn't such a darn lefty. 

This was in practical terms extremely important because the Loyalists included Spain's  military leaders, who supported Francisco Franco against the Republicans in 1936 because the growing influence of Moscow (Stalin) terrified the Spanish establishment. 

Franco and the army prevailed after a tragic three-year civil war encapsulated in Picasso's 1937 painting "Guernica" about the bombing of a rebellious Basque village by German and Italian planes, acting they said at the request of their ally Spain.

After its civil war was over -  according to my history sherpas - Spain effectively became neutral country that was a haven for people escaping from Vichy France. Franco played both sides and eventually went to the Allies. He did the same thing after the war, buying support from the left and the right - corrupting the rich with tax havens and corrupting workers (in the view of my sherpa) with workplace benefits.

He died in a hospital bed in 1975 and was described to me as dying "in his bed" because he successfully made concessions to both labor and business.

Private conversations at the Reunion suggest that Europeans view that today's problems in Spain are the result of (1) the long-time easy life in Spain created by the country's control of mineral resources overseas, exemplified by the previously mentioned centuries-long stream of silver to Seville, and (2) the Easy Street culture that Franco helped create in the process of maintaining control.

To make peace with workers, Franco's postwar Spain instituted generous policies that allow workers to build up a seniority that prevents employers from firing or laying them off without onerous penalties. Comment by a Brit who has worked in Spain for years:

Business owners burdened with a bigger payroll than their revenues can support may find it easier to shut down an entire facility than lay off a single employee.

These concessions, of course, have been made in different degrees all over Europe, as a conscious choice has been made in Europe to trade quality of working life for some loss in economic growth. But elsewhere in Europe concessions were made in a more democratic environment, with more business input.

In Spain, Franco matched the concession to workers with loopholes to facilitate non-payment of taxes by companies and executives. These loopholes go beyond the business tax concessions demanded by lobbyists in Washington. They amount to institutionalized corruption. Another memorable comment of the day:

Japan has political and civil service corruption as well. But usually when the politicians are corrupt, the civil service exposes them, and when the civil service is corrupt, the politicians expose them. In Spain both sides are in on it.

After Franco died, the progressive King Juan Carlos I took over and soon became one of Europe's most popular monarchs. His reputation, however, has necessarily been seriously tarnished by Spanish unemployment's reaching a new peak of 27.2 percent in the first quarter of 2013. 

Among Spaniards younger than 25, unemployment is reported as rising to 57.2 percent. But a Spanish friend said this was an exaggeration because the official figures include students as unemployed people. I don't know enough about the Spanish labor figures to comment on this. 

The country meanwhile is gripped with an unusual level of self-doubt. The estimated proportion of the Spanish economy that is "off the books" is 30 percent. The so-called "black economy" and fear of bank failures are cited as the reason for the Spanish people hoarding 500-euro notes, with more of them in Spain relative to population than any other country. 

Some Spaniards are becoming self-critical, blaming their economic problems on their  cultural traditions. The fear is that the European Union may end up wrecked on the rocks of Europe's finest treasures - its glorious history and the many cultures created by this history. 

The biggest shock for some people at the gathering of mostly European Oxford graduates was that Lord Patten, Oxford's Chancellor and a long-time supporter of the European Union, expressed public doubts about the future of the euro and the EU. As one person asked me rhetorically:

What is left of the EU without the euro? What is left of the euro without the EU?