A bumper weekend for Spain and Alonso

As Fernando Alonso rounded the final turn of the sinuous Valencia Circuit to grab victory, he compounded a bumper weekend for Spanish sport and anyone named Alonso. Fernando’s footballing namesake Xavi struck two past the hapless French to reach the Euro 2012 Semi-Finals. 

For F1’s Alonso, victory was particularly sweet. At the start of the season everyone had discounted Ferrari as also-rans after their new F2012’s disappointing performance in winter testing. The car was clearly difficult to drive, with Alonso and his beleagured teammate Felipe Massa seconds off the pace. 

But thanks to Alonso’s brilliance and the unpredictability of the new Pirelli tyres, the Spanish driver has been in the hunt from the start, hustling a recalcitrant car to the top as the main competitors faltered. 

His win in Malaysia, where he overcame rain, a lowly grid position and a charging Sergio Perez, was testament to his ruthless competitive spirit. Nowhere was this more apparent than on the streets of Valencia this weekend. 

Alonso salutes his adoring home fans

Starting eleventh, he catapulted to 8^th on the opening lap and quickly dispatched Hulkenberg and Maldonado. Slick pit-work by the Ferrari team allowed him to capitalise on the misfortunes of both Kimi Raikkonen and Kamui Kobayashi, who lost precious seconds as their teams blundered their tyre changes.

 Whilst Sebastian Vettel remained in the lead and continued to pump in quick laps with peerless consistency, Alonso was now in touch with the chasing duo of Lewis Hamilton and Romain Grosjean. A win still seemed unlikely. But suddenly the race was blown wide open. 

Backmarkers Vergne and Kovalainen clumsily collided, throwing debris onto the track. Out came the safety car andVettel’s 20-second lead was erased. Whilst Hamilton suffered pit-lane woes, both Vettel and Grosjean succumbed to alternator failures as their cars’ electronics faltered in the Mediterranean heat. 

Alonso claimed the lead and held on for his 29^th career victory. Fighting back tears on the podium amid the crowd’s deafening patriotic roar, Alonso, like Spain’s footballers, looks well-placed to claim another championship.

Hostile takeovers and sabre-rattling - Argentina’s aggressive nationalism takes the fight to Europe.

Radio Nacional, Spain’s main public radio station, is rarely a platform of anger or controversy. Like a political version of Gardener's Question Time, newsreaders deliver the headlines with subdued obedience and guests use political correctness as the first rule of thumb. But on the morning slot of 16th April, just  as Spain was waking up to its cereal and cafe con leche, the situation was a little different.

Trouble along the road for Repsol

Antonio Brufau, CEO of Spain’s main oil company Repsol, was in the studio after his company suffered a major shock from Argentina. The Buenos Aires government had seized control of  Argentina’s largest oil company YPF back from Repsol, taking the lion’s share of Repsol’s 57% stake in YPF. Brufau’s tone as he catalogued Argentina's “unjustifiable illegal act” belied a distilled rage towards Argentina’s government, particularly its president Cristina Fernandez de Kirschner. It was a welcome break from the monotony of Spanish morning radio, but epitomised the shock waves felt in Madrid after the news.

Repsol acquired YPF in 1999 and for the next 12 years poured money into the Argentinian operation, increasing its investment year-on-year. From its original 1999 investment of $1bn by 2011 this had almost tripled to $2.99bn (inflation-adjusted still well over a two-fold increase), with $3.5bn promised in 2012. In addition, the number of YPF employees almost doubled under Repsol's tenure.

For twelve years, the partnership seemed rosy enough, with Brufau and Argentinian minister in charge of energy policy Julio de Vido keeping strong relations. According to Spanish newspaper ElPais: “The Repsol president got on well with everyone he needed to: the businessmen, the influential journalists, the governers of the petrol-producing provinces”.

But suddenly, in December 2011, this all changed.

De Vido changed his tone, demanding that Brufau's company invest more in exploring and producing petrol, despite YPF finding shale oil deposits worth around $25bn in Argentina's Neuquén province last year. 2011 marked the first time in history that Argentina had to import energy from abroad, and the first port of call for criticism was Repsol, despite the company accounting for only 33% of Argentina's energy production. Brufau countered, citing that the existing oil deposits were nearing exhaustion and that it was impossible to install the infrastructure required for extracting the new finds so soon after their discovery.

But his responses fell on deaf ears. From the placid relations of a few months previous, the Argentinian government turned into Repsol-YPF's main antagonist, criticising the company wherever possible, before finally announcing the expropriation on April 16^th. 

The sudden sea-change in relations, backed up by what Brufau termed Argentina's “campaign of harrassment, coercion and leaking of information”, pointed to a premeditated strike at Repsol's core. Argentina was doing everything in its power to devalue YPF's shares, allowing it to take control through expropriation when the share prices were at rock-bottom.  

 

Between January and early April it fell by over 40% on the NYSE, from $42 to $25.

Suddenly, as de Kirschner announced the takeover, Repsol's representatives were given minutes to pack their bags and clear their Buenos Aires offices. Thirty years after the Falklands invasion, Argentina was perpetrating another act of defiance against a former colonialist power. 


Naturally it was unrepentant. De Kirschner spoke of “taking back what is ours” and justifying the act as for the good of Argentina.

Legally, the grounds for expropriation are shaky at best. International law would only authorise the expropriation if it were in the public interest and if the shareholders (Repsol) received fair compensation. 

Neither of these seem likely at this stage. Even with control of YPF it is still unlikely whether Argentina can once more become energy self-reliant and eliminate the need for foreign energy imports. After all, Repsol-YPF only accounted for a third of its energy production and the infrastructure for new shale oil energy deposits is still years away from being installed.

More worryingly for Repsol is the problem of “fair” compensation. Argentina has sent mixed messages, saying that remuneration of the $9bn debt would be discussed in a government tribunal. But then de Kirchner deployed her populist tone declaring that her government would pay Repsol “zero pesos”. Spain and the EU responded, imposing sanctions on Argenina, boycotts and trade blocs, but It seems Argentina is determined to defy Europe once again.

YPF: part of Argentina's national conscience 

Kirchner's motives are not hard to fathom. YPF is a company engrained in Argentina's national psyche. When it was formed in 1922 it was the world's first state-run oil company. Its original logo – in the blue and white of the national flag – is testament to the patriotic pride it represents. Putting it back into the hands of the taxpayer – symbolically defying Repsol's supposed neo-colonialism – would always be hugely popular.

So it proved. Cheers of support in Argentina's national congress. Demonstrations on the streets of Buenos Aires. The wave of public approval recalled the celebrations after the 1982 Falklands invasion, albeit on a smaller scale. Defying former colonial powers – enflaming the residual bitterness towards them – is clearly a popular move amongst ordinary Argentinians, and one which Kirchner is apt to exploit.

The Falklands question is even more emotionally-charged and again Kirchner's jingoism has generated massive popular support. To mark the thirtieth anniversary of the conflict the Argentine government was once again in provocative mood, with Kirchner attacking Britain's “absurd” stance towards the islands and unveiling a statue of the islands with the Argentinian flag emblazoned across them.

De Kirchner in verbal combat

The latest furore came from an advert filmed secretly in Port Stanley, which showed an Argentinian athlete training for London 2012, accompanied by the tagline “to compete on English soil, we train on Argentinian soil”.

But Argentina's spurious sense of entitlement over the Falklands is just one of many flashpoints. This and the YPF affair tie in with a muscular anti-european sentiment appearing throughout Latin America. In Bolivia, Evo Morales seized control of the country's main power supplier, Transportadora de Electricidad, from Spanish company Red Electrica, even ordering his military to seize the local assets of the Spanish company. Brazil, the world's fifth-largest economy, refused to allow British warship HMS Clyde to dock in Rio de Janeiro, forcing it to divert to Chile.

Undoubtedly there is a sense of pride when the former colony – the traditional underdog – takes the fight back to its former oppressors.

But the South American Viceroyalties splintered into independent nations almost two hundred years ago. Like the rest of the world, Argentina and Latin America must move on from their obsession with the remnants of colonialism.

Clearly, the issue is still a source of emotionally-charged popular discord. For Latin American leaders, exploiting it is a way to score cheap political points. But even if this attitude stymies trade with European partners, its political gains mean it is unlikely to disappear overnight. 

Sport and politics shouldn't mix – but sometimes they must.

The Bahrain Question - why F1 must take a stand

Shanghai International Circuit, fifty miles south of Shanghai. Its collection of soaring towers and vast stadium complex provide an impressive backdrop to the world's premier motorsport competition. For a few hours on Sunday, as Nico Rosberg's silver Mercedes lapped effortlessly to a long-overdue first victory, all appeared serene in the world of Formula One. But throughout the weekend off-track politics have cast a shadow over the sport's competitive side.

The Chinese circuit is among F1's most impressive venues, testament to the incredible wealth poured into the sport by emerging economies in recent years. But despite China's questionable human rights record, it is Bahrain, another economy whose riches have swelled the F1 coffers, which is attracting all the headlines. The Bahrain Grand Prix is due to run this weekend and despite the kingdom being gripped by mass uprising and demonstration against the totalitarian regime, the race is still going ahead.

Bahrain, particularly the capital Manama, has been in lockdown at various points for well over a year. Since the Arab Spring in early 2011 thousands of mostly Shi'ite protesters have taken to the streets, bidding for freedom and an end to the hereditary monarchy of the Sunni elite, the Al-Khalifa royal family.

Whilst last years' event was cancelled on safety grounds, this year organisers are pressing ahead as though all is normal. This is not the case. The regime has kept dissidents from taking control with violence and shocking reprisals. Stun grenades, tear gas, rubber bullets and even live ammunition have been used against protesters. At some points the authorities even resorted to the army's tanks and overseas mercenaries. Political opponents, such as Abdulkarim Ali Ahmed Fakhrawl, a newspaper editor, have been brutally tortured.

Naturally the FIA, F1's governing body, have wheeled out the predictable line that the sport and politics should not mix. But mix the two is exactly what the race's promoters have done. The promotional tagline “uniF1ed – a nation in celebration” paints a criminally distorted picture of the real situation, effectively using Formula 1 as a propaganda tool to wash over the discord.

In reality, the exact opposite is true.

Far from a unifying force, F1 has become a symbol of the oppression of the ruling class in Bahrain. Its benefits – colossal advertising revenues and contributions to the local economy – are mostly confined to the elite section of society which subjugates the rest. In effect, Formula One's presence is allowing the existing regime to solidify its position with the enormous financial windfall it provides.

It is hardly surprising that F1 – and its self-styled 'ringmaster', Bernie Ecclestone – have polarised the protesters' anger in recent weeks. Protesters have burned pictures of Ecclestone and banners and graffiti have all appeared carrying messages with a similar rallying call: “No Formula One over our blood”.

Disappointingly it seems that money speaks louder than morals. For Ecclestone and Formula One's parent company CVC Bahrain is an enormous cash-cow, bringing in £40 million in promotor's fees alone.

Formula One has the opportunity to strike a blow for the freedom of a repressed people. Calling off the race would make the position of a cruel regime even more untenable. Bahrain is a small nation of 1.6 million people and Formula One contributes significantly to its economy every year. Comparisons with other sporting events in other controversial regimes, such as the former Soviet Union, or present day China, are null and void. Jimmy Carter's decision to prevent U.S athletes from competing in the 1980 Olympics in the then-U.S.S.R. made negligible impact on the overall Soviet regime because in the event the politics played little part in the running of the event. Protests surrounding Beijing 2008 again had little effect.

The Bahraini government is using F1 as a PR mechanism, attempting to divert international eyes away from its contemptible treatment of its people. Meanwhile the FIA and F1 itself is playing a dangerous game of brinksmanship in the name of profit, tacitly supporting a brutal regime by holding the race. But, with the violence set to continue, will this short term profit cause long term damage to the sport?  

Now Sarkozy ruffles feathers in Madrid as the election battle hots up

Just like Manchester City after Mikel Arteta’s booming 87th minute strike yesterday, Nicolas Sarkozy is staring down the barrel of defeat. If the latest polls are to be believed, socialist rival Francois Hollande is pulling clear. Now Carla Bruni’s diminutive husband is trying to fight back. His latest tactic? Breaking his long-held solidarity with fellow EU nations by criticising Greece and, more contentiously, Spain.

A lot to ponder

Sarkozy sounded a cautionary note to voters against the socialists' economic model, heaping blame on “seven years of socialist government” for Spain’s current problems. It was a direct stab at the tenure of prime minister Jose Luis Zapatero between 2004 and 2011, which met with a cold reception in Madrid even among the conservatives.

The socialist PSOE, formerly headed by Zapatero, immediately pointed to Sarkozy’s own credentials, highlighting France’s high public debt. The new conservative Finance Minister, Luis de Guindos, dismissed Sarkozy’s remarks as mere campaigning and branding the comparisons with Greece “unjust”.

Sarkozy may have a point. Spain’s economy is hardly in rude health – its national debt still sits above €15000 per capita. But singling out a fellow EU member as an object lesson in economic mismanagement is surely a step too far, particularly in the current climate. Never in its 54-year history has the EU needed to be more unified. With eurozone break-up still possible and the IMF reluctant to step in with bailout money, political infighting is the last thing Europe’s leaders should be doing.

With the elections now imminent and the final push for votes underway, it seems Sarkozy is feeling the pressure from Hollande. His PR team has been in overdrive during the last few weeks and Sarkozy has hit out at his socialist rival at every opportunity.

His most recent piece of rhetoric was a 34-page document simply titled “letter to the French People”, which tried to show solidarity with his people whilst asserting his presidential gravitas. It even began with a hand-written note extolling his brand of (nauseating) patriotism: “my dear compatriots, there is nothing more beautiful than love for one’s country.”

But his patriotism was more decorative garnish, masking the document’s true agenda with a layer of populist jingoism. The majority of the letter was devoted to criticising Hollande’s policies rather than offering anything new or constructive. But the reductive politics of sniping at rivals is classic Sarkozy.

His tactic of outlining his politics via letter is also nothing new. In his bid for re-election in 1987 the socialist President Francois Mitterrand drafted a similar document addressed to the French people with exactly the same name. His goal was to build an image of him as experienced and trustworthy, almost avuncular, positioning himself above the cheap political point-scoring of his rival Jacques Chirac.

But the glaring irony of Sarkozy’s tactics will not be lost on the socialists. The fact that he, the enemy of everything Mitterrand stood for, is now changing tack and trying to imitate the former president, will probably leave the socialist ranks tittering with laughter.

Spain's Catch-22 - Strikes and the 'Summer of Discontent'

Friday in Madrid, the morning after the strike. The paving slabs of the central plaza are covered in the papery mulch of discarded leaflets from last night's protest. Bins are still unemptied,  overflowing with red plastic flags bearing union logos. Buildings are pock-marked with anti-authoritarian slogans in black spray paint.

This was the sixth general strike in Spain's history and the first since 2002. Unions claim 900,000 took to the streets. Police put the numbers below 100,000. The real figure, - somewhere between six and seven hundred-thousand, is still enormous.

Spain is losing patience with her government. Although the rally passed without violence, the vehemence of the protesters and sheer weight of numbers present will worry Spanish authorities. Placards bearing “No hope, no jobs, no money” neatly encapsulate the country's problems. Banners with the message “total violence: let’s steal food and rob houses” carried impact but were meant more in jest than as a call to arms for widespread anarchy.

But this second mantra could become more real as the problems worsen. The simmering anger of the Madrid residents could be a portent of more animated protests as government cutbacks and reforms begin to bite harder.

Tellingly it was the younger generations who made their voices heard. Spain has approaching 50% youth unemployment and faces the prospect of a lost generation who will pass into middle age with little work experience. Young people, some only sixteen, led the anti-authoritarian charge, with chants and banners carrying unprintable messages directed at police, banks, and the newly-elected Prime Minister, Mariano Rajoy.

Rajoy's conservative Partido Populista is feverishly cutting back to reduce the national debt, - currently almost 9%. In 2011 the country fell 2.5% short of its reduction target and now the 5.3% proposed by the EU seems wildly optimistic. The PP has stepped up its efforts, with a so-called 'rationalisation' of the banking sector and new labour reforms.

The latest reforms are the main source of anger for Spanish workers and the reason for strike. The crux of the proposals is the reduced compensation package available to workers after being fired – which makes it easier for companies to lay them off and so reduce overheads. In effect, jobs in an already shaky market are now even more transient.

The proposal also increases the levy on jobs for large and medium-sized companies, to help increase government revenue.

Rajoy and his cabinet have set out their austerity plan using the UK's as a model – though taking it further with more severe public investment cutbacks. But while Cameron's austerity measures (and the Bank of England's periodic injections of capital via Quantative Easing) are slowly and painfully clawing the UK out of debt, Spain is a different case entirely.

Whereas the UK’s national debt sits near 3% with the economy slightly growing (0.8% in 2011), Spain is still mired in deep recession. For a population already at breaking point with tax hikes and cutbacks, the idea of further squeezing seems impossible. Rajoy’s government seems fixated on meeting the EU’s unrealistic targets at all costs – even that of his people’s welfare. On Thursday the rhetoric of the unions was damning – branding the EU and Angela Merkel “tyrannical” for insisting that Spain meet its outlandish targets, whilst castigating Rajoy as “spineless” for submitting to their demands.

In reality he has little choice. The government has a near-irreconcilable balancing act between the demands of the EU and its own people. PSOE, the socialist party in favour of the strikes, suggests suspending the cutbacks for a few years to stimulate job creation. But this would only prolong the pain, leaving Spain swamped in debt for years to come and extending the repercussions for the eurozone, whose bailout strategy depends on Spain returning to the black.

For Spain there is no magic formula. It is likely to be several years before its debts are paid and the road to recovery is littered with obstacles. The remedy – higher taxes, more cuts and perhaps even more drastic reforms – will likely make Mariano Rajoy's PP politically toxic and usher in the return of the socialists. The regions of Asturias and Murcia have already rejected the PP in local elections.

Short term public outcry could make the next few months Spain's 'summer of discontent'. The air of unease on Thursday was almost palpable. Mounted police paced towards the crowds of striking workers. Beret-clad police officers stood uneasily in front armoured riot vans next to the city hall.

In the event there was no need for heavy-handed tactics to keep civil order. But the situation could become more heated if the government turns the screw further. Rajoy's next move will be decisive in keeping his people in check. 

Magic Alonso, abject Massa and Ferrari's Sepang dilemma.

“Look there! Massa in the gravel! Massa in the gravel! There he is, the Brazilian’s terrible weekend continues,” piped out Antonio Lobato, lead commentator for antena3, Spain’s new F1 broadcaster.

But it was the other Ferrari beached in the gravel.

For several seconds there was a pause of near disbelief as the realisation dawned on Lobato and co-commentator Marc Gene: the red, yellow and blue helmet inside the car belonged to Fernando Alonso.

“El Nano” or “Magic” Alonso, two of Lobato’s favourite epithets for the Ferrari driver, bely Alonso’s near-mythical status in Spain.

His elementary driving error at turn one, where his Ferrari speared off track after he clipped the grass under braking, rendered the commentators speechless. Only Karthikeyan landing his woeful HRT on pole would have provoked more of a shock.

But error or no error, Ferrari are in turmoil. Their new F2012 is less prancing horse, more wounded thoroughbred. Its underlying flaws, already evident from testing, were if anything more pronounced in Melbourne.

Throughout free practice both drivers grappled with unpredictable handling. The mix of entry understeer followed by exit oversteer and lairy slides as the cars struggled for traction, may have produced spectacular slow-mo, but the car’s deficiencies were plain to see, particularly in the hands of Massa, who finished with a hapless spin at turn 9.

On Sunday Alonso atoned for his qualifying misdemeanour, driving a dogged race to fifth and restoring some pride to the Scuderia. But the result owed more to circumstance and Alonso's talent.

Benefiting from a slice of luck at the start as he jinked inside the carnage at turn one, he extracted every ounce of performance from the recalcitrant car. To the delight of the Spanish commentators, his race pace was consistent and respectable, though hardly nibbling at the heels of the McLarens or Red Bulls.

It could have been much worse. Melbourne, largely bereft of high-speed directional changes, places a premium on braking and mechanical grip, helping to mask the Ferrari's aerodynamic flaws.

The high-speed sweepers of Sepang next weekend could reveal the extent of Ferrari's problem far more clearly. A driver can only transcend the car to a certain point – even for someone of Alonso's calibre if the basic aerodynamic grip is missing on an aero-focused circuit it's impossible to be truly competitive, at least in the dry.

If Ferrari will struggle in Sepang, one wonders how Felipe Massa will cope.

In Australia Massa looked out of his depth in an F1 car and unable to remotely challenge his teammate all weekend. He was still over second away from Alonso’s Q2 time, even after the spin. In the race, whilst Alonso was holding off Pastor Maldonado’s faster Williams for fifth, Massa was languishing outside of the points, at one stage battling Petrov’s Caterham and lapping, fuel-corrected, at least half a second slower than his team-mate most laps.

What has happened to the Massa that took the fight to Kimi Raikkonen three years ago?

Massa has never been the same driver since his accident. Did he lose a few tenths after his horrific injury? Is being the team's clear number two an insurmountable mental hammerblow? It's impossible to know. But more Melbourne-style performances and the impressive Sergio Perez will doubtless be lining up to take his place.

Lobato and Gene may have mistaken Alonso's beached Ferrari for Massa's. But given the pair's current form, it was utterly understandable. 

More questions than answers? Conclusions from Free Practice at Albert Park

For anyone expecting the season’s first F1 practice session to leave us much the wiser of the current form book, they were sorely disappointed. 

Melbourne’s typical bright autumnal sunshine was replaced by a selection of cloud and intermittent rain, hardly optimum conditions for F1 cars to stretch their legs and push the limits of performance.

None of the teams showed its real hand today. 

Mercedes and Michael Schumacher topped the timesheets, with the German 7-time world champion proclaiming himself happy with his runs. 

Red Bull looked muted – from the onboard footage Vettel was clearly leaving performance to spare. 

From its body language the car was not squirming around on the limit of adhesion even on the low grip of a moist track. Through the final turn, the fast right-hander where drivers deftly

feed in the power as the corner opens out, there was no hint of him ‘chasing’ the throttle or correcting rear-end slide.

Why should he? It wasn’t worth the risk. The cost of slamming the car into the wall, as Karun Chandhok did last year, would have far outweighed any benefit the team could have gained – the use of any data collected from running on a damp track is dubious at best.

Many other teams followed a similarly low-risk procedure. McLaren looked strong and clearly had performance to spare, whilst Force India underlined their solid testing pace with confident-looking laps from both di Resta and Hulkenberg. 

Their car looked planted and the drivers seemed comfortable from the off, a positive sign for Sunday, where in a race which so often produces surprise results predictability is valuable.

Ferrari's radical pull-rod derived F12 looked a handful in the hands of both Alonso and Massa, the Spaniard suffering several mid-corner wobbles whilst the Brazilian ham-fistedly beaching the car into the gravel after a careless spin at turn 9. 

The car looked visibly less planted than the McLaren or Red Bull, or even the Mercedes. 

Much paddock talk has been devoted to the Mercedes' new wing-stalling DRS enhancer but until its effectiveness can be measured more empirically it's difficult to quantify how valuable it is in reducing lap time.

HRT and its principal Luis Perez Sala looked sheepish after sessions to forget. Not only was the car slow, but unreliable – Narain Karthikeyan stopped on track in free practice 1 and De La Rosa completed a single installation lap. Karthikeyan eventually lapped 13 seconds slower than Schumacher. 

There should be more to come from the team – one hopes Karthikeyan was erring on the side of caution – but for many paddock insiders it will be a long shot if the team even qualifies. Apparently more personnel from Sky are present at Albert Park than from the entire HRT team, which says something about priorities. 

It's premature to ring a team's death knell after two inconclusive sessions but HRT could become a Mastercard-Lola type fracas (the short-lived 1997 team that arrived in Australia 13 seconds off the pace). But with the experience of Pedro de la Rosa the team should begin to make strides. They will certainly need to.

Lotus and 2007 world champion Kimi Raikkonen were also muted, the Finn complaining of a lack of power steering feel similar to the one that blighted his testing at Jerez.

The problem seems to have been partially resolved as Raikkonen set competitive laptimes, finishing in ninth ahead of teammate Grosjean, but whether Lotus can completely quell these gremlins before qualifying remains to be seen. 

Actions speak louder than words if the famously reticent 'iceman' Raikkonen drove himself straight back to the sharp end after a two year absence, he would generate serious column inches.  

All in all, it was a frustrating session that produced little to upset the general hierarchy generated by testing. The old guard of Red Bull and McLaren seem well-placed and Mercedes appear to be in the hunt. But there remains little to suggest that one team is significantly ahead of any others. 

If dry, qualifying tomorrow will shine a revealing light on the true pecking order for the first time. Until then it's anyone's guess.