Parlez-vous français ou espagnol? La crise a transformé l'Espagne en Espagnistan. Comprendre la crise espagnole en 6 minutes.par Aleix Sallo In English, this video is about the Spanish housing bubble and its effect on the Spanish economy.
The title of this post is the cry of the Argentine Piqueteros about ten years ago when they took to the streets to complain about the country’s debt and unemployment. Today (August 23, 2011) Spain’s Indignados have had an answer to their peaceful demonstrations when the country’s Socialist Prime Minister, José Luis Rodríguez Zapatero, declared that he would place constitutional limits on the budget deficit and the public debt essentially agreeing with Mariano Rajoy, leader of the opposition conservative People`s Party. This will be passed by the Spanish parliament before it`s dissolution on September 27th of this year. So much for the conciencia pública or public awareness of the government when it comes to the demands of the protestors - the leaders of Spain have accepted the decisions of the Toronto G20 consensus that took place last year in my home town to place austerity and the fortunes of the moneyed class above the needs of the rest of society. It will be interesting to speculate on the response of the Indignados to this outcome and their realization that peaceful protest is trumped by special interests. An articulate declaration of the financial interests’ position was made by the Economist:
First, the protesters have a point when they say that the political and media establishment has become aloof and self-serving. The politicians who crafted Spain’s democratic institutions in the 1970s had good reasons for favoring strong parties and governability over perfect representation. The instability, fragmentation and polarization that marked the last democratic experiment in the 1930s led to civil war and decades of dictatorship under General Franco. But the unintended result has been over-mighty and unaccountable party bosses. Corruption, though the exception, has often gone unpunished. So there is a case for looking at electoral reform, and especially at introducing an open-list system that would allow voters to pick and choose among individual candidates.
The second and bigger reason for the protests is that Spain’s rigid two-tier labor market, bolstered by the unions, cossets the insiders who have permanent jobs at the expense of the young and unemployed, who are left out in the plazas. To his credit, Mr Zapatero has begun to cut the cost of hiring. He also wants to make collective bargaining more flexible. But more boldness is needed. Spain’s best hope of growing its way out of its mess is through exports; given that membership of the euro means it can no longer devalue, that requires falls in the real value of wages.
The Economist in its unique style has implied that the current situation in Spain is another democratic experiment as opposed to the normative Spanish authoritarian regime and makes a nod to the wide spread corruption that was a large contributor to the financial crisis. Next we get the usual conservative mantra of blame the unions and of course there is the revealed truth of cutting wages as the only solution. Will the demonstrators buy this reframing of the problem from class warfare to intergenerational conflict? I guarantee this will not work and mimicking the States with debt reduction fights, trashing the middle class and reducing benefits to the poor is a recipe for social unrest. Spain has a liquidity problem like all of the other western states and taking money out of the economy by means of these policies is exactly the wrong path but right wing looney economists seem to hold sway these days. To misquote the George Bernard Shaw play, Pygmalion, the pain in Spain falls mainly on the plain.