Spain’s Irish Spring
“What will it be like when this world food crisis arrives? We can make some educated guesses. The decline in living standards will be felt everywhere. At the lowest level of poverty, the price of food will rise above the power to purchase. There will be food riots in major cities…. At the upper levels of wealth, the pain will be felt, but it will be less acute…. Inevitably, such stark differences in purchasing power will deepen animosities and elevate world tension.”
“Suerte,” we said (“good luck!”). He turned and looked at us with cow’s eyes. “Graçias,” he said, but he had a tone of sorrow, more than hope.
On May 15, a few activists had gathered in Puerta del Sol, a large public plaza in the center of Madrid, to protest the coming election and to register their general dissatisfaction with the situation in their country. Last year unemployment rose from 20.5% in August to 20.8% in September, the highest rate in the European Union, and probably in the developed world. Food and fuel prices had crossed a tipping point for many, where it was no longer other things that were being given up to pay for food, it was now food that was being given up.
Spain is a microcosm of the collapse phase Global Civilization finds itself in and the protest camps in many cities are an example of the bankruptcy of political ideology — it is adrift and uncomprehending. Neither the right nor the left are remotely proposing the degree of change that is needed (essentially, an end to oil addiction and a epoch of ecosystemic healing). The street protests have nothing further to offer — they are reactionary, but not revolutionary.
For many years, Zapatero’s government ran a current accounts deficit of 10% GDP, forcing Spain to borrow 7 to 8 billion euros every month, until, by 2010, the value of Spanish government paper debt had sunk so low that lenders simply stopped lending. Zapatero had inherited the same banking crisis Obama had, and it came to a head in the burst bubble of the housing sector. The Spanish economy had been hooked on household and corporate debt steroids with not just sub-prime but negative interest rates from early 2002 until mid-2006, causing "massive overheating" in the Spanish economy, which sucked 5 million immigrant workers from Africa in 8 years. But, just as in Iceland, Ireland and the USA, chickens invariably do come home to roost.
As the EU, IMF and Spain’s lenders started to pick up the pieces of their shredded balloon, severe austerity imposed by the Banksters put 5 million young Spaniards out of work and on the streets. As in Ireland, Spain responded by moderating its social programs (entitlements), cutting welfare spending, raising the age of retirement, and chipping public pension benefits by 20%. And, as in Ireland, discontent swelled.
The medicine had some effect because the ‘Bikini Graph’ that Zapatero’s emergency measures produced ran deeper and somewhat ahead of Obama’s.
|Spain's 'Bikini Graph' showing its rebound in GDP (before IMF austerity controls take effect).|
The problem is that both Ireland and Spain are trying to make major corrections to their economies while participating in a monetary union. Neither has a currency to devalue, or a central bank with capacity to print money and issue or recall bonds. Instead, both must achieve “internal devaluation” by cutting wages and prices until its accounts are back in line with its Eurozone partners.
On May 16, people wandered into Puerta del Sol to see what was going on with the protestors of the preceding day and were arrested for “illegal protest.” In response, the protests grew, and extended to rallies in central plazas of other Spanish cities. People came and camped. The police stopped evicting. It became Spain’s Tunisian Spring. Thousands are now camped out in central Madrid along with 60 other sites nationwide, creating temporary cities of the dispossessed. The mainstream media in Britain and the West have chosen to largely ignore this phenomenon,
On May 22, Spain held its regional and local elections and our acquaintence, the mayor, lost, as he may have expected to. Even though the Socialists had made real progress in setting Spain back on track, half the population stayed away from the polls and over a million ballots were turned in blank. The elections were a landslide victory for the conservative People's Party (PP) which took control of all of Spain's largest cities, including Barcelona, a Socialist base since 1979.
|Interest rates on Spanish Debt|
While the young, unemployed protesters camped out in Puerta del Sol demanded “Democracy Real Ya” (“real democracy now”), right-wingers, some of them previously under indictment for corruption, swept the democratic vote.
Will the protests grow? Yes. Will they spread to other countries? Probably. Do the protesters have an achievable goal, some realistic strategy to get their countries out of this huge bind? No.
So, good luck with all that.