Spain’s Yearnings Are Now Its Agony

Grim economic prospects have given rise to an "indignados" movement that observed its first anniversary with protests last week.

By JONATHAN BLITZER

ONE Spaniard recently put it this way: “We are being told to tighten our belts and drop our drawers at the same time.” Unemployment is higher in Spain than anywhere else in the euro zone, and the economy has been starved back into recession. Yet the very Spanish politicians who wax stern on the imperatives of austerity have virtually nothing to offer citizens to alleviate the pain. It is a script closer to Beckett than to Helmut Kohl.

Even as the euro zone lumbers away from the precipice of a continentwide recession, Spain is stuck in a fateful holding pattern. According to a European Commission forecast, Spain will be the only country among the currency union’s cast of 17 to remain in recession in 2013. The government’s plans to recapitalize Bankia, Spain’s fourth-largest bank, have reinforced concerns about a generalized banking crisis and costly bailouts. Spaniards, meanwhile, will have to endure the effects of $34 billion worth of cuts slated for the rest of the year.

All of this adds up to the inevitability of future hurt, and it is embittering Spaniards’ taste for the democracy they craved just a generation ago.

Spain’s fall from heady promise to Celtic gloom tells a story of democratic expectation gone sour. This tale is a profound blow to the European Union itself — a symbol of the continent’s shifting political prospects. Spain was not only one of the chief protagonists of 20th-century Europe, it also tilled the bloody soil from which the union later sprang. The Spanish Civil War was the staging ground for the defining existential drama of the century: a gory crucible of democracy, fascism and communism in conflict. Its fate entwined with Germany’s, Spain was at the center of Europe.

Spain sat out World War II, but afterward, its Axis-addled associations and blustering dictator sidelined it while Marshall Plan aid and democratic reconciliation transformed the continent. Eventually it emerged into that new Europe — only to find itself, at the cusp of a new century, again bound to Germany, now by bankers rather than bombers. And again, this seemed a boon at first.

When Spain joined the European Community in 1986, after nearly four decades of dictatorship, euphoria reigned. Finally, the country was gaining its rightful place intellectually, culturally and economically in the social democratic mainstream of Western Europe. “For Spaniards, Europe was the solution,” said Álvaro Soto Carmona, a history professor at Universidad Autónoma in Madrid. “We were no longer different,” he said; membership “opened the door to hope.”

Propping open that door was money: structural funds from the union to finance much-needed infrastructure projects. At the heart of the financial power was a rejuvenated and economically vibrant Germany. The future looked secure; as had been the case in Germany, Spain’s renewed surety was wrapped up in its sense of belonging to a free and optimistic Europe.

Then came plans for the adoption of the euro in the late 1990s, and again the prospect of an ascendant Europe offered a gilded opportunity for Spain. Borders were disappearing. The euro helped inflate a booming real estate bubble, as capital migrated south from northern Europe. Banks lent liberally, and the construction industry surged. As private debt mounted, homeownership soared.

Unlike some of their European counterparts, Spanish banks were relatively well protected against the initial collapse of the American financial sector in 2008. But the global recession that followed, coupled with the bursting of the real estate bubble at home, soon devastated Spain’s economy, which had longstanding vulnerabilities that were no secret but had been overlooked in the boom years. They included chronically high unemployment, for which economists blame unwieldy labor laws. Those have now come in for an overhaul. But even in better times, Spain also lagged behind the European average in spending on research and development. Now there is talk of a worsening brain drain.

The principal remaining force driving jobs and taxable revenue is tourism, as it was in the times of Francisco Franco. It is “uniquely dispiriting,” lamented the novelist Ernesto Pérez Zúñiga, that so little has changed. Spain’s economy once was consigned to depression by Franco’s autarchic policies; now it is subjugated by the tyranny of the markets.

These days, a raft of illicit practices, crafted from old excesses, have become a rickety means of sliding by. In the years when construction and real-estate markets boomed, transactions conducted underground exceeded 20 percent of gross domestic product. Spain acquired the dubious distinction of having the highest concentration — nearly one-fifth — of all the 500-euro bills on the continent. Called “Bin Ladens” — everyone knows they exist but no one has ever seen them — they are vestiges of corruption, bribery and money laundering in the fat years.

While that bustle has cooled, many desperate Spaniards still work under the table — in some cases supplementing unemployment relief with money from ad hoc jobs. This helps explain why Spain’s deep despair has not exploded in quite the rage felt on the streets of Athens.

More to the point, the salvation that Europe promised 26 years ago increasingly resembles a charade. As the Yale historian Timothy Snyder has noted, Spain and its kin in Southern Europe have effectively become “pantomime republics”: elected national officials defer to the unelected supranational European Union. In policy terms, this means subscribing to the pro-austerity agenda emanating from Germany. Last September, a majority in the Spanish Parliament amended the Constitution to include a deficit reduction clause; it was the first time the document had been touched since it was written in 1978.

So what does it mean for Spaniards to “belong” to Europe now? Emigration and indignation, the defining strands of contemporary Spanish life. The number of Spaniards living abroad has spiked 23 percent during the crisis. And remittances sent back to Spain are higher than ever. Most emigrating Spaniards have streamed across Europe, heading north, where job prospects are best, although Latin America has also been a common destination. The economic crisis has inverted old Iberian paradigms: lured by the promise of developing economies, the continentals are now setting out for Angola, Ecuador, Brazil, Peru and Chile.

HERE at home, the crisis has left one of every two Spaniards under 25 without work. Those who left school to capitalize on bloated salaries during the construction boom are now adrift. And the job market is desiccated for the better educated too; this generation is the best qualified in the country’s history, yet its members are the first since Spain’s civil war to face worse job prospects than their parents.

Disenchantment with politics is deep. Polls last autumn suggested that young protesters had two overarching grievances: the unresponsiveness of the political class and joblessness. The sovereign debt crisis can explain both. The Brussels agenda has rendered Spain’s two major parties — the Socialists and the conservative “populares” — impotent and indistinguishable on the most important issue of the day, job creation.

Daily, hordes of Spaniards swarm the streets to protest mounting government cutbacks, while protesters with more programmatic leanings sound a refrain of reform: change the electoral law; make state finances more transparent; crack down on political corruption.

Their fixation on process is revealing. Citizens are losing confidence in the power of their votes; assemblies and rallies are hurriedly convened to stem the tide of further government cutbacks, but to scant effect. As one young protester told me, “We don’t have the luxury of advancing much of an agenda beyond beating back government cuts.”

Because Spain’s economic fate no longer seems to be in Spain’s own hands, the crucial intermediary space between what the state needs and what the people want — the ground on which politicians are normally held to account — has shrunk. Sometimes it seems that the closer Spain has moved to Europe, the more democracy eludes its grasp.

Jonathan Blitzer is a journalist and translator based in Madrid.

NYT