The major economic news in Spain in the last ten years or so has been the privatization of former government monopolies like Iberia and Telefonica and Repsol and the like, and corporate takeovers involving both Spanish and foreign companies. The breakup of the telecoms and air traffic and tobacco and utilities monopolies increased competition drastically. I remember back when you had to call Telefonica two months in advance and pay two hundred bucks to get a phone connection, and when it was four hundred bucks to fly to London--one-way. Trust me, things are much better now, though there are still plenty of state-owned companies that need to be sold off.

As the Financial Times article we ran said, this is the first time ever that Spanish companies have been big players in Europe. There are also big hairy takeover deals going on within Spain, though, with the biggest one Gas Natural's takeover bid for Endesa, which is going to go through. These are both big utilities, but it doesn't seem to me that any sort of monopoly greater than what we have now would result from the takeover. We've spilled a lot of kilobytes over this one here at the Spain Herald. Basically, Madrid interests oppose the takeover, because Gas Natural is headquartered in Barcelona and a whole bunch of jobs--and tax revenues--would be moved if the takeover went through. Barcelona interests, of course, favor the deal.

Fairly or unfairly, in Barcelona the PP and the PSOE are both seen as representing Madrid interests as against those of Barcelona and Catalonia. In this case, the PSOE favors the deal, while the PP opposes it. This adds to the anathema in which the PP is held in Catalonia. They really hate them. Even people who know nothing about politics (which is actually more than two-thirds of the population, as it is in most places) know they despise the PP above all else except maybe for the Real Madrid soccer team.

Another aspect of the greater Madrid-Catalonia conflict is the savings bank war. Spain has two giant savings banks, Barcelona's La Caixa and Madrid's Caja Madrid, along with about a hundred or so smaller regional savings banks. Savings banks here are as political as everything else, since they're technically non-profit institutions run by an elected board of directors. You see where the politics come in. Anyway, both savings giants own massive amount of stock in a lot of different companies, and La Caixa owns a large--though not majority--slice of Gas Natural. This merely adds to the bad feeling in Madrid about the takeover of Endesa.

The other international takeover on the way is Mittal Steel's bid for Arcelor, the European steel company, which is a result of the merger of steel manufacturers in several countries, including Spain, France, Belgium, and Luxembourg. The Europeans don't like this one little bit, as steel is still considered a basic industry, and there have been very few foreign takeovers of huge industrial corporations in Europe. The Europeans are just going to have to get used to it, and learn that you can't have free trade and protect your own industries at the same time.

Positive suggestions by former PM Aznar: Expand NATO to include such countries as Australia, Japan, and Israel, and set up some sort of European-North American free trade agreement. Aznar likes to talk about trans-Atlantic this and trans-Atlantic that. This is what you do when you're a retired politician, go around making speeches. Beats working for a living.