The crisis in Spain: Winners and losers | by Brian Anglo

by Sep 13, 2012Magazine

spainThe key question is who, i.e. which class, is going to pay for this enormous crisis. Whichever one wins the battle, it will be directly at the other’s expense. So far the popular classes are taking a beating. Can this be turned round?

Throughout Europe people are being laid off from work, wages and pensions are being slashed, and hospitals, schools and other state facilities are being closed. These measures, which will take parts of Europe back to a situation last seen before World War II, are a response to the economic crisis gripping Euroland.

Spain is at the centre of this crisis, with its South African-like unemployment levels of over 25 percent.

But what, exactly, is the nature of the crisis and where did it come from? In many ways it has similar origins to the crises in other countries: decades of neoliberalism, free-market fundamentalism, financial globalisation and deregulation, broadly within the framework of the European Union, which Spain joined in 1986.

However, there are a number of specificities that need to be understood. Spain joined the Euro at its inception, at an unfavourable rate of exchange. This led to a trade deficit and loss of the lever of devaluation to boost competitiveness – which is now being done by driving down wages. As one industry after another was dismantled, services and the financial sector took over the economy. A mixture of cronyism and corruption at the head of the banks, particularly the savings banks under the control of local politicians, provided easy loans for property developers and construction companies (often employing poorly-paid immigrant labour) to go on a speculative spree of environmentally destructive house- and infrastructure-building, in which all parties counted their chickens even before the eggs had been laid.

When the crisis hit, banks were left with huge, irrecoverable debts and devalued empty properties, while a large proportion of young people, unable to get onto the housing ladder due to the highest unemployment and precarious employment figures in Europe, continue (or return) to live with their parents, well into their thirties. It should be noted, however, that before the state-guaranteed bank bailouts, all but 17 percent of the debt was private.

Spain is now in a double-dip recession. The harsh austerity measures, exacerbated by regressive tax policies, are reducing government revenue while at the same time increasing certain items of government expenditure. An example is unemployment benefits, which are spiralling along with record-breaking joblessness.

Despite the fact that the Socialist Party (PSOE) and then the Popular Party (PP) have faithfully implemented the dictates of the Troika (the European Union, the International Monetary Fund and the European Central Bank, ECB), there has been no let-up in the ‘pressure’ exerted by the ratings agencies and the ‘markets’, and new problems of liquidity are arising every day. The head of the ECB has promised to do ‘whatever it takes to preserve the euro’, which probably implies propping up the Spanish economy, but all bets are off.

Is there a way out of the crisis?

The conservative PP government, with an absolute majority in the central parliament, attempts to excuse itself by saying it has no choice but to implement painful cuts, yet claims it has not relinquished one iota of sovereignty to the Troika. Although the PP is probably being forced to make the cuts faster and deeper than it would like in the hope of delaying or weakening the social conflict and unpopularity cuts generate, its hidden agenda (in complete contradiction to its electoral programme) is basically little different from what it is being ‘told’ to do. Its agenda is to use the crisis to introduce what amount to structural (counter-)reforms that will definitively reverse what remains of the limited gains made by the working class following the Franco dictatorship. They will consolidate once and for all a balance of forces and an economic system that is entirely favourable to the upper echelons of the capitalist class and, by the same token, is prejudicial to all the other classes.

The PSOE, which lost the elections in 2011 when its former voters refused to support its right-wing policies any longer, has no alternative to offer as it shares most of the PP’s premises, differing principally on secondary details. Indeed, the creation of a national coalition or ‘technocratic’ government cannot be ruled out.

The United Left (IU), the third major political party in Spain, would probably gain votes in a general election, but its credibility is seriously compromised by its participation as a junior partner in a coalition government with the PSOE in Andalusia, the country’s biggest region. Here it is complicit in implementing the cuts, albeit ‘regretfully’, rather than organising resistance to them.

The stance of the two major trade unions, CCOO and UGT, rivals when it comes to workplace elections but otherwise inseparable twins, is more a hindrance than a help. They would like an impossible return to how things were before 2007 as though everything in the garden then was rosy and nothing to do with the current crisis. Even now, having negotiated (or accepted with very little fight) retrograde reforms of labour laws, pensions and social provisions that not only harm the interests of large and often very vulnerable sections of the population but also weaken their own base and threaten their very existence, the unions continue to press for more negotiations and a referendum on social policies. They do this without seriously questioning the economic model and without preparing a sustained plan of mobilisation that would be needed to thwart the government’s attacks.

Signs of hope

Within this generally depressing picture, there are nonetheless some small signs of hope.

The sudden appearance of the indignados e indignadas in May 2011 (hence known as the 15M), was driven by a generation faced with the prospect of living standards that would be worse than their parents’. Starting with the occupation of city-centre squares, it was the first combative new mass movement to emerge after decades of mostly social calm and it has had a big impact on both consciousness and mobilisations. It provided a new take on the situation – ‘This isn’t a crisis, it’s a swindle’ – and represented a refusal to be passively manipulated – ‘We’re not commodities in the hands of bankers and politicians’. The 15M is far from homogeneous and does not have a programme as such, but it has contributed enormously to the beginnings of real resistance: ‘We won’t pay for their crisis!’, the implication being that they must.

To find a more coherent approach in Spain, we have to look to the far left. The Anticapitalist Left (IA), for example, calls for expropriation of the banks under social control, refusal to pay the illegitimate debt, a progressive fiscal policy, repeal of all the regressive laws on employment, pensions and social rights, job creation through public investment and a reduction in working hours, and a change in the production model. This is not a revolutionary programme, but, if consistently pursued, could unleash a dynamic capable of altering the balance of forces and opening up perspectives for systemic changes in favour of the working class and its allies.

Barcelona, 04-08-12

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