MAGICAL SPAIN – THE WAY IT SHOULD BE!
The past few weeks have seen Spain back in the media spotlight, with a torrent of reports from around the world describing the crisis in Spain. I have seen text and images of so-called middle class Spaniards searching city bins for food and violence by the police against demonstrators. Meanwhile the ‘Spain too big to fail, too big to bail’ mantra seems to epitomise the country’s present situation – a limbo-like teeter on the edge of potential meltdown.
So, how bad are things in Spain?
Well, firstly, any perception of the Spanish middle classes (or otherwise) searching bins for food is absurd and felt as a grievous and inaccurate insult by my Spanish friends. It is true that over the past two or three years there are some people in my town ( and probably others) who do go around the bins searching for metal and saleable junk but these people look like tinkers or gypsies and bear no resemblance to the Spanish ‘middle’ class.
Of course, Spain is deeply troubled and no-one in their right mind would deny that but, to some extent, life continues, more or less normally – at least on the surface.
I say ‘on the surface’ because if you look around in a cursory manner then you will see people going about life in much the same way they did some years ago. However, look more closely and you will see any number of shops and businesses (of all sizes) that have closed down and, if you listen to conversations, then you will hear that the eternal topic is the ‘Crisis’.
Certainly, the pain for the unemployed is obvious. The unemployment rate in Spain is now around 25% on average and has been around this mark for the past couple of years, meaning that there are a lot of people who have had no work for a significant time. Particularly hard hit are young people (the unemployment rate for them is something in excess of 50%) who, understandably feel like a ‘lost generation’. For them, hope lies mainly in getting work abroad – but this no easy thing to achieve at the best of times and a tragedy for many Spaniards who bathe in a nuclear society where family life is all important.
In reality, I suspect that it is the ‘nuclear’ aspect to Spanish society that is keeping Spain relatively peaceful. This is because the unemployed are usually welcomed back into the family home and supported by their extended and close-knit families in a way that would rarely occur in the UK or much of Northern Europe. This helps to cushion the worst effects of the crisis – even if not the psychological impact.
That said, hardship abounds and recently the Spanish Red Cross, for the first time ever, held a fund raising day within Spain aimed at getting money that could be spent on the people of Spain – rather than on some Third World country. Meanwhile, charities such as Caritas are becoming critical in many areas and are now supplying food and necessities to an ever increasing number of people.
Of course, this year has seen some significant demonstrations on the streets of Spain and, bubbling below the surface of the country, is a sense of real fury. Fortunately, any outbursts of violence, so far, have been sporadic and ineffectual. However, for how long this state of affairs can last is hard to tell and significant social unrest is certainly more of a possibility, as every day passes. This is mainly because there is a sense of hopelessness within Spain, with few Spaniards having the remotest confidence in their leaders.
Indeed, within Spain there is utter contempt for politicians, whether local, regional or national – and irrespective of political party. Abuse of power, corruption and incompetence are considered the natural traits of all politicians who, it is thought, take office for no better reason than to line their pockets. Certainly, along with the banks, they are considered the cause of the crisis.
Worryingly, the lack of confidence in Prime Minister Rajoy of the PP (Conservative) party appears universal. He gained overwhelming power in November 2011 (almost a year ago) but is now constantly vilified and considered as someone whose only reaction to the crisis is to approve ever greater austerity measures. This is somewhat unfair, particularly as Rajoy has had no options but to make continual cuts, given the diabolical state of the Spanish economy when he took over.
Be that as it may, Rajoy’s personal popularity ratings are incredibly low with a recent poll showing that an astonishing 84% of the Spanish voters polled have little or no confidence in his leadership. In fact, Rajoy’s only consolation must be that the popularity of the opposition leader (Rubalcabe) of the PSO (socialist party) is even worse – with 90% of the people polled stating that they had little or no confidence in him.
Needless to say, it is a worrying thing when the majority of the people in a country have no faith in the leaders of the two main parties! It means that there is no meaningful vision and no trust in any political solution currently on offer.
Certainly, Rajoy’s charisma bypass is undoubtedly a hindrance to his leadership of the country and the perception of many Spaniards is that he has no idea what to do – with his prevarication over accepting an EU bailout confounding many Spaniards. The latter, for the most part seem to have come to terms with a bailout and the fact that without it there is little or no chance of an economic recovery. This, it seems, is in stark contrast to the belief of Spain’s finance minister, Luis Guindos, who was recently openly laughed at by the professors of the London School of Economics when he stated that: ‘Spain doesn’t need a bailout at all’. Even his translator could not, evidently, keep a straight face. Hardly cause for confidence – and humiliating for Spain.
At the moment, it is hard to state anything positive about the Spanish economy and the future of the country. Only today, a report came out saying that Spain was the 136th (out of 183!) most difficult place to start a business in the world. This is dreadful news and hardly does justice to Rajoy’s attempts to make Spain more efficient and business-like.
Meanwhile, the state of the property market remains dire, with the value of Spanish properties having dropped in the region of 50% since the crisis began in 2008. This has left the amount of toxic debt in Spain at horrifying levels.
Looking to the future, I suspect that Spain will get a bailout and that this will keep the country afloat. However, I am sure that I am not alone in shuddering at the thought of any in-coming money being managed by the Spanish. If it is, then it will probably only go to line the pockets of vested interests and ‘disappear’ like so much of the EU money pumped into the country over the past twenty years.
This leaves the knotty question of who should be managing the bailout money? It is an interesting point, particularly given the EU’s own inability to manage anything effectively.
Certainly, the control over any bailout money and how it is distributed touches on the very sovereignty of Spain itself – which is also possibly further at stake, as the country potentially faces the independence of Catalonia and the Basque Country. Sparks are likely to fly and it would not surprise me to see huge changes in the way that Spain is run over the next couple of years. With luck, Spain may emerge stronger – but I fear not before a good deal more pain and hardship for the Spanish. The current problems are far too big for any quick solutions and any bailout (if it comes) will be far from an instant miracle cure.
Nick Snelling
RELEVANT ARTICLES ABOUT THE POLITICS AND ECONOMY OF SPAIN
The Spanish property market – stabilising or falling?
Independence of Catalonia – a reality?
Demonstrations in Spain – a dangerous spasm of despair?
Democracy in Spain – under attack
Spanish politicians and the complicated system of politics in Spain
The weakness of Spanish government
Valencia debt and outrageous corruption
The Spanish banking crisis as bailout nears reality
Is the Spanish bailout here at last?
Spanish economy – a perfect storm with bailout likely
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