Forget, for a moment, the Greek tragedy. The tale of social woe set to play out in Spain this year is both bigger and more important to the world. For the drama of rescuing the euro, or letting it sink, will be played out on Spanish soil.
That is not to say Spaniards will have it worse than Greeks, though Eurostat figures show only Bulgaria and Romania now have a higher percentage of people deemed at risk of poverty. Spain’s economy will shrink, once more, by 1.5 percent — a dramatic enough figure, though one most Greeks would happily settle for. However, Spain represents a quantitative leap in Europe’s ongoing tale of misery. Its economy is five times bigger than Greece’s — accounting for 12 percent of the eurozone — and there are almost twice as many Spaniards as there are people in bailed-out Portugal, Ireland and Greece combined.
As Spain enters another year of recession, Europe’s politicians offer only one remedy. It must swallow more of the harsh medicine of austerity. But will it survive the cure? And will the spiral of decline really come to a halt toward the end of the year, as Spanish Prime Minister Mariano Rajoy promises?
Already the country’s social fabric is tearing. Family networks keep the working class going as unemployment hits 26 percent. Fewer than half of those aged under 25 find work. Anecdotes of misery abound. Grandmothers with memories of the “hungry” 1950s cook up large pots of lentils to feed unemployed grandchildren. At night, small crowds gather outside supermarkets in poorer neighborhoods of Madrid, seeking thrown-out produce. In middle-class neighborhoods ghostly figures wander the streets rummaging through bins by night.
Friends face new dilemmas. How do you look after a terminally ill 90-year-old aunt and her son with mental health problems, asks one, when both have lived off her 600 euro (US$791) monthly pension? Another has given her spare room to a 57-year-old graphic designer friend who cannot find work and does not qualify for unemployment benefit. How long will he stay? A doctor — and single mother — admits that she worked before Christmas with flu because she could not afford to take (unpaid) sick days.
“I tried not to breathe over my patients,” she says.
Anecdotal evidence of Spaniards’ suffering is backed by hard figures. When crisis struck in 2008, families began to save madly. Four years later savings rates are tumbling again — too many families are having trouble getting to the end of the month. Average household disposable income has already dropped, in real terms, by almost 10 percent since 2008. In poorer regions such as the Canary Islands, Andalucia and Extremadura, almost a third of the population is below the at-risk-of-poverty line, according to the National Statistics Institute. In a damning report, Oxfam says that previous crises in Latin America and Asia point to serious long-term damage if austerity measures remain in place.
“Poverty and social exclusion may increase drastically,” it says. “By 2022, some 18 million Spaniards, or 38 percent of the population, could be in poverty.”
Rajoy’s year-old conservative government no longer calls the shots. Last year it tried to obey Brussels and Berlin, raising taxes and chopping spending on health, education, social services and almost everything else. Pensioners and civil servants became poorer. Yet early figures suggest that, by the time money borrowed to bail-out banks is included, the deficit remained above 8 percent. Rajoy promises to do better. And that means even more cuts.