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The People are Mobilizing Against Austerity

Hot Autumn in the Kingdom of Spain

by DANIEL RAVENTOS and JULIE WARK

On 20 November 2011, thirty-six years after the death of the dictator Francisco Franco, the right-wing Popular Party (PP) won a resounding victory in the parliamentary election. Less than ten months later, voting intention polls show that public support for the Rajoy government has plummeted. The government has certainly been busy these months, at least in terms of adopting policies that can most charitably be described as achieving a vicious circle. Draconian pro-cyclical fiscal policy aimed at reducing public debt has devastated businesses, caused widespread unemployment, salary cuts, a drop in aggregate demand, falling State revenues, all of which has increased public debt, given rise to growing misgivings among international creditors, led to new and more stringent austerity measures, destruction of the welfare state with devastating effects in education, health and unemployment benefits, and increased public debt again.

It may have been a vote winner but the PP’s “programme” was nonsense from the start. The idea was idiotically crude. The PSOE (Spanish Socialist Party) was the source of all evils but the PP would fix everything. “Spain” would win back the trust of the “markets” and would soon be on the way to economic recovery. By 24 July this year, the risk premium shot up to the dizzying figure of 639 and the stock market fell to 2003 levels. Much more important, in the second quarter 5.7 million people were jobless bringing the official unemployment figure up to an astronomical 25%. In May, the government’s promise was reduced to Rajoy’s assertion that, “I will do whatever is necessary, even if I don’t want to and even if I said I wouldn’t do it”. So much for the “programme”.

The previous PSOE government paved the way for the PP. Indeed, the direct assault on the living and working conditions of the greater part of the population goes back to 12 May 2010 when Rodríguez Zapatero, then Prime Minister, informed the parliament of agreements reached a few days earlier by the EU’s Economic and Financial Affairs Council (ECOFIN) regarding Europe’s fiscal crisis and the creation of a “European stabilisation mechanism”. He also announced a number of immediately effective “shock” measures which included a 5% cut in salaries for public servants, a pension freeze (excepting non-contributory and minimum pensions), curtailing some public health prescriptions, eliminating retroactive payments of Law of Dependence benefits, slashing public infrastructure investment by 6,000 million euros, and cutting public expenditure by regional and municipal administrations by 1,500 million euros.

The PP has taken these first measures against the non-wealthy population to further extremes, which might be summed up as follows:

Education: the number of secondary school teachers has been reduced and that of students per classroom has risen, while university fees have gone up and non-tenured university lecturers are being forced de facto out of their jobs;

Health: a “co-payment” scheme for medical prescriptions has been introduced, undocumented immigrants no longer have health cover except in very exceptional circumstances, and the number of publicly-funded medicines has been cut;

Employment: dismantling protective measures against unemployment, reshaping the job market in a way that puts workers in a very vulnerable position, making dismissals easier, undermining workers’ and union rights, and cutting unemployment benefits;

Legal System: Notable here is the government’s determined preservation of an incompetent, discredited legal system riddled with corruption scandals and hand in hand with the very reactionary Catholic Church over such issues as the recently-announced limits to the abortion law, so that it is hardly surprising that the Constitutional Court has appointed the Andrés Ollero, ultra-right member of Opus Dei and rabidly opposed to abortion, to draft the court’s decision;

Autonomous Regions (and Nations): The centre-periphery relationships between the historic nations and the Kingdom of Spain are fraught and fast deteriorating, especially in the case of Catalonia. The PP, a true heir of the Franco regime and founded by Manuel Fraga Iribarne, a Franco henchman and one of his most repressive ministers, does not govern in any of the regions except in the dictator’s home territory of Galicia. However, it cynically plays on the most primitive Spanish nationalist sentiments which boil down to the notion that it is treason to suggest that Spain is anything but one single nation, and crudely wields the “vital struggle against the public deficit” to shore up centralised control to the detriment of Catalonia and the Basque Country in particular. This may win votes in the Kingdom of Spain as a whole but the PP pays the price of being a minority party in the Basque Country and miniscule in Catalonia, where recent polls show that more than half the population wants independence. There is great anger in the Basque Country because months after ETA publicly renounced armed struggle, the PP has done nothing about the situation of some 550 ETA prisoners in far-flung jails. This only supports the theory that, for many years, ETA has been extremely useful in political terms for the PP (and a good part of the PSOE) when it came to justifying repressive policies.

These measures don’t happen in isolation from each other, as borne out by the potentially explosive cocktail of health and immigration policy, the autonomous regions and the legal system, which is the result of the PP’s allegedly economising measure of denying public health care to undocumented immigrants. Catalonia and Galicia have announced that they will provide them with documents guaranteeing medical attention, while the Basque Country and Andalusia will simply disobey the decree, and Valencia and Madrid will find ways of charging them for medical attention. The PP, like a bull in a china shop, has unwittingly opened up more big cracks in the “unity” of Spain.

Another commentator, Juan Torres, uses a similar metaphor for the government’s crassness when he describes it as “behaving like machine at full throttle, indiscriminately slashing social spending on the one hand, and carrying out a thoroughgoing counter-reform of everything the extreme right (political, journalistic and ecclesiastical) had deplored in the last years of the Zapatero Government. In both cases, this has entails demolishing the citizens’ already scant channels of information, participation and protest.”

The Results

The figures resulting from these harsh measures are eloquent. Unemployment statistics are astronomical, three times higher than they were in 2006, the year before the onset of the crisis.

                                      2006 2007 2008 2009 2010 2011 Q2/2012

Unemployment rate               8.3 8.6 13.9 18.8 20.3 22.8 24.6

Youth unemployment             17.8 18.8 29.2 39.1 42.8 48.6

% of unemployed jobless
for more than a year                 25.0 22.7 21.4 34.5 45.9 50.0

% of homes with all active
members unemployed              2.5 2.7 4.9 7.1 7.7 9.1 9.7

Source: Population Survey (National Institute of Statistics – INE

Poverty is doing exactly what one would expect on the basis of these figures: rising and rising.

                                      2006 2007 2008 2009 2010 2011

Poverty rate                              19.9 19.7 19.6 19.5 20.7 21.8

Poverty threshold per person 6.860 7.203 7.753 7.980 7.818   –

(euros per year) Different sources

The poverty figures are a clear indicator of the consequences for a good part of the population of measures that are supposedly tackling the economic crisis. More and more people are feeling the pinch in such everyday matters as being able to buy chicken, meat or fish, or keeping warm or cool at home, buying medicine or dealing with unforeseen expenses, as official data from the National Institute of Statistics reveal when data from 2007 and 2010 (the most recent available) are compared. Between 1999 and 2007 housing prices shot up by 106% while nominal wages went up only 8%. According to the Plataforma de Afectados por la Hipoteca (Association of Mortgage Victims), there were some 350,000 foreclosures in the Kingdom of Spain between 2007 and 2011, with a record number of 46,559 in the first quarter of 2012.

The Gini index went from 0.311 in 2006 to 0.339 in 2010, reflecting a sharp increase in inequality of income distribution. This is corroborated by a comparison between the aggregate income of the top 20% of the population in comparison with that of the bottom 80%, which went from 5.3 to 6.9 times more in 2010, a rise of more than 30%. Naturally, the real differences are much greater because the income of the richest 20% of the population tends to be tucked away in the form of dirty money, tax havens and secret bank accounts. The most recent data show very high rates of capital flight, some 56,631 million euros in June this year, and 220,000 million euros (22% of GDP) in the last six months. These figures of the Banco de España alone speak volumes.

Then again, the share of wages in GDP has been declining since 1981, from 73% to 57.3% in 2012. The European Commission calculates that the figure will drop further, to 56.3% in 2013. With the counter-reform measures against the welfare state in operation since 2010 this situation can only get worse. Real wages dropped almost 6% from 1994 to 2006 and the Comisiones Obreras trade union federation calculates they will fall another 5% in 2012 due to the freeze in minimum wage and price hikes. In contrast, wealth is increasingly concentrated in a few hands. It was estimated in 2008 that about 1,400 people, which is to say 0.003% of the total population, “decisively control[led …] the country’s basic economic resources, and the essential economic organisations with a capitalisation of about 789,759 million euros or 80.5% of GDP”. And in 2012, for example, the richest nine people accounted for about 64,000 million euros or nearly 7% of the still-falling GDP.

Protest Takes to the Streets

The European Commission considers that the ongoing decline of the Spanish economy in the second quarter of 2012 “cannot be attributed to Government policies”. It is not as if it could opine differently when Rajoy so slavishly followed its orders. So the government blithely keeps announcing further aggressive measures against the population in the coming months in keeping with the “recommendations” of the European Council. These include raising retirement age, more pruning of unemployment insurance, reducing minimum wage yet again and, as one member of the government said, “It is highly possible that even more drastic measures will be adopted”. Yet recently published figures on the economic slowdown expected for 2012 and 2013 (a falling GDP estimated at -1.5% and -0.5% respectively) only highlight the failure of the measures already taken. And the population will not be hoodwinked by any exculpatory pronouncements from the European Council.

Only four months after the PP’s electoral victory, on 19 March 2012, the government was faced with the first general strike, in protest over its proposed labour (counter-)reform. No date has yet been set for another country-wide general strike but the main trade unions have warned on many occasions that the government can expect more. The biggest trade unions of the Basque Country (different from those of the Kingdom of Spain) have called for a general strike there on 26th September. Many demonstrations are now being planned for the next few months and, given the government’s determination to stifle dissent with violent crackdowns and its evident policy bias, not to mention economic ineptitude, the country’s streets and squares are sure to be not just hot but boiling. Bigger and bigger swathes of the population, including many previously non-political individuals, have been forced by their straitened circumstances to see the government’s skulduggery, to feel the sting of the insulting insouciance of rich people and bankers, to glimpse more than a few throwbacks to the Franco dictatorship, and they are getting very angry.

The big trade unions are now considered by many to be too lukewarm in their protests. Whether they have union support or not, many groups are very active in organising around specific issues such as defence of foreclosure victims, the right to abortion, debt restructuring, the right to self-determination for stateless nations, public health and education and increasingly greater crowds are turning out at their demonstrations. The movement known as 15-M (15th May Movement) is particularly noteworthy because of its repercussions on the national and international scale. It first appeared in May 2011, when the PSOE was still in power, then retreated for some months into smaller initiatives in neighbourhoods and municipalities, then forcefully irrupted once again around its first anniversary last May.

Apart from its widespread support, this group stands out for its clear five-point programme: 1) Not a single euro more to rescue the banks; 2) decent public health and education; 3) no to job insecurity and no to the government’s labour policy; 4) decent, guaranteed housing; and 5) universal basic income. The aim is to give a succinct summary of reasonable measures that would counter the market-dominated offensive being launched against the immense majority of the non-rich population by the central and regional governments at the orders of the European Union. If these commonsense, defensive points look “radical” it is because of the sharp contrast they present with the economic and social barbarism of government measures.

The people are mobilising. A big march on Madrid has been planned for 15 September, organised by a wide range of organisations and trade unions. This will be just the start of a very hot autumn in which a great deal is at stake: the physical and mental welfare of the population and, last but not least, the democratic values that are now being taken from them again.

Daniel Raventós is the author of Basic Income: The Material Conditions of Freedom (Pluto Press, 2007) He is on the editorial board of the international political review Sin Permiso. 

Julie Wark is the author of Manifiesto de derechos humanos (The Human Rights Manifesto, Ediciones Barataria, 2011) and is an advisory board member of the international political review Sin Permiso.