The Spanish dilemma: a blessing in disguise?

Spain’s crisis is not one of public debt per se. It is of private debt being transformed into a national burden.

Somdeep Sen
18 August 2012

People only accept change when they are faced with necessity, and only recognize necessity when crisis is upon them – Jean Monnet

On July 19 as Spain’s Popular Party approved a string of austerity measures that the Spanish daily El Pais termed ‘draconian’, many would probably find immense validity in Monnet’s words. The stereotype is well known: the ‘lazy’ Mediterraneans, audaciously termed as PIGS, have for long lived beyond their means and it is time that they accept ‘drastic’ changes in the face of crisis. Of course, EU-wide statistics have long deemed such ‘accusations’ wildly inaccurate. But, as Spaniards across the societal spectrum take the street to say ‘NO’ to cuts that many would claim as being undemocratic, insensitive and increasingly inhuman, the creation of an ideal environment for real change may already be under way, although not in the manner that the likes of Merkel would endorse.

Feeling the ‘pinch’ of austerity

Spain is a country of well-founded traditions and it seems that it has added another ‘arrow’ to its quiver: weekly austerity cuts. In keeping with this ‘new’ tradition, it was declared on July 19 that civil servants would lose their Christmas bonus this year and value-added tax (VAT) would be raised from 18 to 21 percent. The latter was touted as a measure that would affect all. But the real question is, will it affect everyone equally?

Probably not. Those in the upper echelons of the economic pyramid spend a lesser proportion of their income on purchasing goods, thus disproportionately sheltering them from the ills of this measure. And it is here that the discrepancy in Spain’s crisis lies: it affects some more than others. At the very onset one should be clear that at the core, Spain’s crisis is not one of public debt per se. It is of private debt being transformed into a national burden. As Spain aims at the 65 billion euro budget cut that made them eligible for the next instalment of European financial assistance, the aid will in fact only prop up Spain’s tottering banking sector, with their German counterparts scrounging for repayment. What’s left is a marginalized and demoralized populace that sees itself staring at an inescapable abyss with no glimmer of hope.

A proletarian uprising

Of course, rarely has there been a moment in history, where misery hasn’t begotten contention. Since 15 May 2011, Spaniards have sparked a string of protests around the world that could prove to be iconic for this generation. More than a year on, many may have expected the steam to have run out, but a shot of adrenaline seems to have been administered when on July 10 miners from Asturias, who have been on an arduous march of 250 miles, finally reached Madrid to voice their discontent over austerity measures.

With essentially nothing to lose, since government measures would ensure the ‘scrapping’ of their livelihood and their community, the miners have been staging increasingly violent protests. As they trod through the streets of the capital and finally met with an avalanche of supporters from all walks of life at Puerta del Sol, one could almost sense a collective sigh of relief. ‘They have arrived’ was the whisper. Activists, journalists, students, pensioners all greeted them with a roaring applause not only to congratulate them for facing the tyrannical forces of the status quo symbolized by the government and an ever-brutal police force but for representing the plight of the entire Spanish populace. The chant was Fuerza Mineros because they reflected the proverbial ‘collateral’ damage from a trilogy of an insensitive and disconnected political elite, a political system held hostage to domineering financial institutions and monetary institutions that have rarely cared to account for the needs of the masses.

On the 11th as the Fuerza took this chant to the steps of the Spanish Congress, one was then able to witness the tyranny of the trilogy. Batons and rubber bullets flew as they tried to disperse the discontented masses. Peaceful protesters were beaten and onlookers were harassed. The next day the municipality was swift to ‘clean up’ in a show of efficiency rarely witnessed by Spaniards in less-strenuous times. And the mainstream media who seems bent on delegitimizing the uprisings paraded the ‘weapons’ that they would claim reflected the barbarity of contention.

An opportunity in the midst of distress?

Despite attempts to question the prudence of popular dissent, Spaniards have kept returning to the streets, with the movement’s legitimacy on the rise. But while most would admit that the austerity measures are here to stay and that the plight of the people will get worse before it gets better, opportunities for foundational change seems to be round the corner. 

Coming on the heels of the Arab Spring the impetus shown by Spanish activists since March 15, 2011 has not only elevated our faith in popular contention but has shaken us from the slumber of being politically and socially uninvolved and ignorant. But more critically as Spain seems to have lost all its sovereignty in the face of demands placed by Eurozone leaders and as Spaniards feel the brunt of the same, it has given us an  opportunity to reevaluate some of the foundational ‘truth’ of the global monetary regime. 

As the first reports emerge of the manipulation of the LIBOR rates, the fundamental corruption of international financial practices has once again been confirmed. We need to ask who the ‘system’ is really geared at protecting. Why is it that it is seen as prudent to prop up Spanish banks while the Spanish people are pushed to socioeconomic misery? Why is it that the vitality of faceless financial institutions is prioritized over the future of Spanish youth? In times of crisis airwaves are filled with ideological hyperbole all claiming to have the right answers. But as Spain’s ‘generacion cero’ stare down a dismal future, the conversation needs to go beyond such ‘superficial’ parameters. 

With nothing to lose and the current political and economic institutions edging towards complete illegitimacy, it is the ideal situation to question the very basis and logic of how they are organized. Beyond simplistic critiques of capitalism, one must realize corruption lies in the very manner in which we have so far organized our societies. We may adopt new ideologies but if we aren’t cured of the malaise that has so far pushed millions into insecurity and marginality we will have achieved very little. So, while many in Spain, especially the youth, feel they have no future, maybe this is their destiny. Let us rethink who we are and what the basis of a good society is. It is only then we can hope to have real and durable change, in the face of urgent necessity. 

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