On April 23rd, I participated in a conference at the European Parliament on the future of nuclear energy with experts from all over Europe, where I warned that, with the current energy policies, blackouts will be the norm, not a coincidence.

The shortsighted and sectarian policy of the activists who populate the government has led us to the worst blackout in the history of Spain. We have been without communication or electricity for nearly eleven hours.

This blackout, with the immediate collapse of fifteen gigawatts of power in the system, is the consequence of a policy that penalises base energy, key to providing stability to the system, and plunders the energy sector.

Governments have been dedicated to closing nuclear power plants, making them unviable with abusive and confiscatory taxation; penalising investment in distribution with absurd regulations; imposing a volatile and intermittent energy mix; and burdening energy with elevated taxes and administrative delays. What could go wrong? Everything.

And it happened.

Renewable energies, while essential in a balanced energy mix, cannot provide safety and stability due to their volatility and intermittent nature. That’s why it is essential to have a balanced system with base-load energy that operates all the time, such as hydropower, nuclear, and natural gas as backup.

Destroying access to nuclear energy with unnecessary closures and confiscatory taxation has been part of the fundamental causes of the disaster and the blackout.

Last week, they had to close the remaining nuclear power plants because their taxes are so high that they cannot cover their fixed costs. They have destroyed nuclear plants’ economics by political design. Moreover, those plants would have provided stability to the grid if national and regional governments, which use nuclear and hydroelectric power as cash cows for their revenue-hungry policies, had prioritised supply security over energy sectarianism.

There is much more.

Spain and Portugal produce electricity with more than 60% solar and wind energy. Hydraulic, nuclear, and combined cycle gas plants must cover the shortfalls in solar and wind production, which is intermittent. There is no possibility of having a stable and secure system with a continuous supply if the electrical grid is not balanced to avoid a total blackout.
According to Euronews, France sometimes produces too much electricity, leading the network operator RTE to disconnect solar or wind sites. The consumer pays taxes to cover the operator’s losses. This procedure prevents a general blackout of the grid.”

In Spain, the president of Red Eléctrica, Beatriz Corredor, whose experience in energy is more than scarce, has never given a message or coordinated actions to prevent blackouts that were happening more frequently recently. We have been experiencing sporadic supply cuts to the industry for years, and just a week ago, the Chamartín station had a severe supply cut episode.

The crisis was not only a disaster due to the shortsighted energy policy of the current and previous governments. It was a disaster due to the inaction of the Ministry of Defence. Similar to the recent floods, our security forces exhibited astonishment at their lack of mobilisation. Trains and elevators blocked thousands of travellers for hours, while the army stood by, waiting for orders.

Six days ago, the government, left-wing parties, and many media outlets celebrated that Spain’s power grid ran entirely on renewable energy for a weekday for the first time. Bravo. A week later, a massive blackout in Spain, Portugal, and parts of France. France quickly restored electricity because it has the largest nuclear fleet in Europe. In Spain, the government maintained a confiscatory taxation system that prevented nuclear plants from operating, resulting in nearly eleven hours of darkness and no communication.

Red Eléctrica reported that the cause was a “strong oscillation in the electrical grid” that “forced the Iberian Peninsula to disconnect from the European system”. The collapse was immediate and long-lasting. It was the longest power outage in the history of Spain. The recovery efforts were in vain as they attempted to restore frequency control and stability with a system dependent on volatile and intermittent renewables.

A system without physical inertia, provided by baseload energies that operate all the time—nuclear and hydroelectric—makes it impossible to stabilise the grid in the face of supply disruptions.

When the collapse occurred, the Spanish electrical grid had almost 80% renewable generation, 11% nuclear, and only 3% natural gas. There was practically no base generation or physical inertia to absorb the shock that was generated.

For years, experts have issued warnings. Experts from around the world have been accused of being mouthpieces for invented lobbies when they warned of the risk to the system from overloading with renewables and eliminating or limiting base-load energies. In 2017, the European Network of Transmission System Operators warned that the increase in renewables would raise the risk of cascading failures if urgent investment was not made in synthetic inertia and storage technologies. Moreover, even if investment is made in storage, hundreds of experts warned about the additional burden with the electrification of the mobile fleet. Despite the warnings from energy companies and operators, the European Commission maintained its bet on renewable development that was poorly planned and worse executed. This included a New Green Deal that ignored the importance of networks and backup and seemed designed by school activists.

The Spanish government wanted to present itself as the top student of that so-called ecological sectarianism, which ignores copper and lithium mining, the importance of backup, and system stability. What have they achieved? They have created a disaster that has the potential to repeat itself.

Blackouts, which should have been something obsolete and forgotten, have become the norm since politicians have ideologised energy. Other countries have suffered similar problems: Australia (2016), Germany (2017), and the United Kingdom (2019) experienced blackouts or near-blackouts due to insufficient energy reserves or grid stability measures. However, none of these incidents have been as dramatic or scandalous as the one in Spain.

The governments of Spain have decided that the closure of all our nuclear power plants will be effective in 2035, despite all the technicians reminding us that they work perfectly and their lifespan could be extended by at least ten years. This action is going to increase dependence on renewables and Russian natural gas. In other words, Spain’s shortsighted policy is going to make the country more dependent on China and Russia for energy and face constant blackouts and supply cuts to the industry as if it were a third-world dictatorship.
Propaganda told us that renewables would bring competitiveness and stability to the grid, but the reality shows that an over-reliance on certain renewables and a shortage of base-load energy sources indicate that the electrical grid increasingly depends on the few nuclear and natural gas plants that operate to maintain supply stability.

The blackout in Spain was not caused by a cyberattack but by the worst possible attack, that of politicians against their citizens.

It is urgent that Spain radically changes its energy strategy, that we maintain and expand the nuclear and base energy park, or we will depend more on Russia and China and, moreover, with blackouts.

The scandal over the alleged corruption of the founder of the World Economic Forum (WEF) in Davos would be just an anecdote were it not another example of what has happened recently with many international institutions. The Financial Times reveals that the WEF founder faces accusations of manipulating the organization’s analysis to gain favour with governments.

For years, many of us have watched with sadness as an important forum like Davos shifted from being a centre for debate and confrontation of ideas in defence of free enterprise to becoming a loudspeaker for the most interventionist ideas, the most damaging statism, and a whitewasher of authoritarian governments, spreading the destructive ideas of inflationism, socialism, and wokeism— which, in reality, are all the same.

Davos went from being a forum for debate to a congregation for repeating interventionist dogmas and whitewashing a single, extractive mindset; those who defended economic freedom, attractive taxes, and control over public spending were gradually ostracised. We have heard enthusiastic applause for those demanding more taxes and greater assaults on job creators, and one-sided debates in which all participants repeated clichés and words like “resilience” and “sustainability” as Trojan horses for predatory statism, where the idea of creating value and wealth was repudiated.

Do you remember the aberration of “you will own nothing and be happy”, abandoning profit generation as a goal, or the suggestion that coffee cultivation should be banned because it contributes to climate change? With phrases like “equal rights to economic resources, as well as access to basic services, ownership and control over land and other forms of property, inheritance, and natural resources”, the most absurd and obsolete collectivism was being sold.

It hasn’t just happened in Davos. This week, Scott Bessent, the U.S. Treasury Secretary, confronted the International Monetary Fund (IMF) and the World Bank, exposing their complicity in selling the flawed products of socialist interventionism.

“The IMF and the World Bank have enduring value, but their mission has drifted off course.”
It was very frustrating to see how these institutions whitewashed the constant increase in the weight of governments in the economy, confiscatory taxes, and inflationism through fiscal and monetary excess. They have forgotten their role as guarantors of economic logic, defenders of wealth creators, enforcers of fiscal responsibility, and enforcers of tax prudence. Instead, they became increasingly permissive with authoritarian, exploitative, and wasteful governments.

Bessent stated:

“The IMF has suffered from mission creep. The IMF was once unwavering in its mission of promoting global monetary cooperation and financial stability. Now it devotes disproportionate time and resources to work on climate change, gender, and social issues.”

Just like other institutions, such as the European Central Bank, which also set climate change as a goal while abandoning its true aim of price stability, they focus on cosmetic and ideological issues unrelated to monetary policy, financial stability, and fiscal responsibility, as these are matters for government social policy. Moreover, many of these supposed social concerns only serve to hide the whitewashing of a constant increase in government excesses, uncontrolled spending, debt, and rising taxes.

Bessent added:

“The International Monetary Fund should be a brutal revealer of the truth. Instead, it is ‘whistling past the graveyard.’”

This statement from Bessent mirrors the perception of any freedom defender in many of the IMF’s reports: it acquiesces as governments push their countries, companies, and self-employed workers towards financial ruin.

Do you remember the IMF’s 2020 call to “do whatever it takes and keep the receipts”? Governments happily rushed to spend without control, printing money recklessly, leaving poverty, inflation, runaway debt, and suffocating taxes in their wake. However, in 2024, when over seventy countries were spending uncontrollably due to elections and the public debt was rapidly increasing, the IMF declared a strategy of “safe but slow growth: resilience with divergence”. Incredible.

Regarding the World Bank, Bessent stated:

“The bank should no longer expect blank cheques for vapid, buzzword-centric marketing accompanied by half-hearted commitments to reform.”

If the institutions that should guarantee financial stability, economic logic, fiscal responsibility, and business growth focus on disguising fiscal and monetary imbalances or ignoring attacks on private property, financial and monetary stability, or free enterprise in countries with totalitarian regimes and interventionist governments, they cease to fulfil their functions and become the orchestra on the Titanic.

It is time to abandon propaganda, excuses, and cosmetics. It is time to stop whitewashing interventionism and recover the essential role these institutions play in preserving and strengthening growth. It is time to stop justifying wasteful governments and return to defending businesses and wealth creators.

We cannot forget the importance of the IMF, World Bank, ECB, or WEF as guarantors of economic and financial stability and monetary soundness.

Their work is essential. Do not forget it. They must return to defending what creates wealth, reduces poverty, and improves the lives of citizens: business growth, the free market, economic freedom, and fiscal and monetary prudence. Their association with predatory authoritarian governments has led to a significant loss of their former prestige.

If Davos, the IMF and mainstream economists had been half as blunt about China and other nations’ tariffs and trade barriers in the past decade as they are today about US trade policy, we would not need forced negotiations to level the playing field.

Dear institutions: It is time to remind the world that progress comes from saving, economic freedom, and prudent investment, not from political spending, debt, and monetary inflationism. The great institutions have much to contribute, but they must know they face two alternatives: recover their mission as defenders of fiscal and monetary responsibility and economic freedom or disappear.

I always get excited about a market correction when I read the Keynesian consensus predict a disaster. The same people who claimed massive money printing and soaring government spending wouldn’t cause inflation are the ones who know exactly how tariffs will impact aggregate prices. Fascinating.

In June 2016, sixteen Nobel Prize winners expected higher inflation from tariffs, and it never happened. Furthermore, many of those economists recommended enormous government spending and Federal Reserve quantitative easing in 2020, stating there were no concerns about inflation. However, this led to the highest inflationary burst in thirty years. Reality showed that there was no inflation in 2016-2019 and that the insane printing and spending spree of 2021 led to the current inflationary burst. This happens because many economic experts will always justify all government imbalances and tax hikes but raise alarm at any tax cut or supply-side measure. We should never trust experts that work painfully close to social democrat governments.

Continue reading When Keynesians predict a disaster, start buying. →

In recent days, we have read numerous articles about a possible agreement between the US administration and its main trading partners to devalue the US dollar. It has been named “The Mar-A-Lago Accord”, a concept inspired by the Plaza Accord of 1985, which aimed to devalue the US dollar to address trade imbalances. That plan failed.

The objective, according to the financial media, would be to weaken the US dollar, boost US export competitiveness, and rebalance global trade. Another proposal involves restructuring US debt by swapping existing obligations for longer-term bonds, such as 100-year Treasury bonds, to ease fiscal pressures. However, this would be a dangerous and potentially counterproductive idea.

Continue reading Devaluing the US dollar: How to Make America Poorer Again. →