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ORIGINAL FRENCH ARTICLE: L’Espagne s’écroule comme un chateau de cartes

by Cathy Ceïbe

Spain is Collapsing Like a House of Cards

Translated Saturday 13 June 2009, by Alison Billington

Madrid, by special correspondant

Recession. After years of dramatic growth, the pointers have all moved to red. The real estate fever and job security give way to some sort of crisis.

Little by little, poppies tint the dryness of the lands of Castilla-La Mancha. In the seventeenth century, the novelist Miguel de Cervantes set his famous Don Quixote there. Four centuries later, red brick buildings, hallmark of Spanish construction, have swarmed over the invisible windmills against which the ingenuous hidalgo thrust a sword. But the building cranes have been broken down for over a year. The real estate crash has cracked the economy, which still displayed, in 2008, a growth figure of more than 3%. The flourishing but undivided economy that created the happiness of neoliberals of all kinds collapsed like a house of cards. Spain faces a run-away recession (2.9%). With more than 4, 100 ,000 unemployed, the country has one of the highest levels of unemployment in Europe. It could even exceed the worrying threshold of 20% in 2010. In a state devoid of real social security, the risk of marginalisation is obvious.

The Spanish dream, or the fever of all things concrete.

At Talavera de la Reina, the second largest city of this province, the Spanish dream has been, again and again, heavily financed. Construction and related jobs (cement, brick, metal, solar panels) have become the bread-winners. This city of 85,000 inhabitants and its surrounding areas counted up to 20 its real estate agencies during the boom. Since the bursting of the speculating bubble, many of them have shut down. Nacho Alvarez [1] welcomed us into his agency, where he works on a self-employed basis. Only one agency now, where there were three yesterday, and three employees where there were seventeen. The brutal reversal of trends has come to this. Casual, in jeans and tee-shirt, this young castillan tells how the concrete fever was at the service of the financial and real estate speculation. Nacho maintains that Talavera de la Reina, which had a tradition of a business and commerce, let construction become its speciality, as in the rest of the country. But if the big businesses build as far as the eye can see, they have not for all this made access to lodging any easier. Spain numbers three million empty apartments of which 100,000 are in Castilla - La Mancha. The price per square yard increased by 200% as applicants for a roof over their heads received the support of banks in return for risky mortgages (see opposite). Since interest rates shot up, many immigrants, the first victims of the crisis, "have begun to give their apartment to the banks. The
banks are going to become the great [Spanish] estate agent," states Nacho. The rare elected representative to be opposed to tentacle of real estate, like the Mayor of Izquierda Unida de Sesena, a small town located near the capital, Madrid, have seen themselves dragged in to court by the bosses of concrete.

A growth built on job insecurity.

A week ago, at the time of the debate on the state of the nation, the socialist president of the government, José Luis Rodriguez Zapatero, announced the principle of substitution belonging to the growth model of "replacing bricks by computers," to use his turn of phrase.

A praiseworthy intention but one which will change nothing, corrects the economist and researcher of the foundation of Marxist studies (FIM), Eddy Sanchez. "The Spanish growth model is built above all on the insecurity of jobs," he summarises. Henceforth, "you can interchange the sectors on which this new growth model depends, but the problem will remain in its entirety if pressure is continually put on the employees, and badly-paid, above all unstable, jobs are created for those with few qualifications." In reality, he explains, "Spanish capitalism rested on three pillars: job insecurity, family debt and an enormous foreign deficit. If the tendency is not reversed by linking growth with the buying power of paid workers, the status quo will be inevitable.

Meanwhile the Spanish are asked to tighten their belts. But, as Maria José Gomez and Laura De Mingo — whose companion is also deprived of a job, the former in insecure employment, the latter unemployed — say, "short of becoming slaves, what can we do?" Since their entry into ‘working life’, the two friends have not ceased to accumulate short contracts of work "for eight hours advertised as four, contracts for half a day followed by long periods of unemployment." Maria-José has just landed a job for three months. "When they told me about it I was as happy as if I’d won the lottery’," she said mockingly, explaining that there are often more than 2,000 applicants for a single short-term contract. Those in insecure jobs, which represent more than 30% of employment in Spain, survive thanks to their relatives, ‘the safety net’ as Laura calls them. But with the crisis, this backbone also tends to bend.

If demonstrations aren’t yet the order of the day –- mortgages being a dissuasive weapon against those who protest — it isn’t out of the question that the discontent turns against recent immigration. Nacho Alvarez brings up the problem by talking about ‘relationships that have already soured’. At Talavera de la Reina, the poppies are in bloom but the windmills have ceased to turn.

Cathy Ceibe

[1(The name has been changed at the request of our speaker.

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