Spain: Simmering anger in Seville


Paul Mason reports on how the economic crisis is changing lives in Seville

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The Spanish version of the soprano cornet is tiny: it curls like a golden snail in the hand of the player. There is only one valve, and it is tweaked, like a tap, so that the melody it produces swoops and squeals.

In an English brass band there is only one soprano and its job is to add a sweet echo, one octave higher, to the main melody. In the La Pasion Sevilla brass band, all the cornets are sopranos. In fact, between the massed ranks of burly working class men playing their cornettas, and the heavy drum detachment at the back, there's only a few trumpets and horns to add harmony and depth.

The result, if you stand close as the band shuffles behind a statue of the Madonna through the humid alleyways of Triana, Seville, is an aural mixture that is at the same time saccharine sweet and physically painful.

Statue of the Madonna Many in Seville have held onto the certainty of tradition in turbulent times

Right now, policymakers across Europe have to be thankful for Pasion Sevilla and its cornets, Triana with its statues and incense, the tight knots of local people gathered at the corners of tiny cobbled streets. Because family and tradition, religion, brass bands and social solidarity are all that's holding many communities in Spain together.

One in four adults is unemployed. Half of all young people are jobless. Consumer spending is in freefall and the country has just learned that to save a single, relatively minor bank, will add a third to its already sky-high national debt. Meanwhile its top 30 listed companies have lost 40% of their market value in a year.

Spain is in trouble, on the face of it, because its small banks - known as cajas - fuelled an insane property boom that went bust. They didn't do complex structured finance deals like Lehman Brothers; indeed they were the opposite of "Anglo-Saxon" capitalism - being small and locally owned.

But behind the pure economic story is a more complex political-economic crisis that could, even now, send Spain the same way as Greece, shattering the eurozone in the process and placing the whole European project in grave doubt.

You can see how badly the crisis has hit people at the "Utopia" apartment block in Seville. It's a modern, newly-built, five-storey complex next to a busy road. The flats are small: perfect for young professionals with their taste for minimalist furniture. But the company that built the flats went bust and now the whole place has been squatted by families turfed out of their own homes due to repossession.

Start Quote

The moment people think Europe is letting us fall, people will stop complaining and start protesting.”

End Quote Raul Limon Journalist, El Pais

Toni Rodriquez leads me around the darkened corridors (the electricity company has cut the power supply).

"We had weekly meetings for four months and we realised we were all in the same situation and finally we decided to do something about it. When we took over the building I was frightened, because I've seen things on TV where they drag people out. The banks need to adapt the mortgage system to avoid kicking people out of their homes."

Toni, aged 44, is one of a tight group of women - mainly cleaning workers - who've organised the occupation. They all have working age children who are unemployed. They resent the banks for kicking them out of their homes, and the politicians for bailing them out.

Around the edges of the project move people from a completely different demographic: the so-called "indignados" of the M15 movement - anti-globalist youth with trademark tattoos and piercings. The indignados made world headlines last year after massive occupation protests in the public squares of Spanish cities, in turn sparking the global Occupy movement.

Toni Rodriquez Toni Rodriquez organised the occupation of a Seville block of flats

When you see the Utopia flats, draped with banners announcing "no homes without people, no people without homes", you see what happens when official politics abandons people. Very ordinary, indeed anti-political people have begun to turn to Spain's radical youth for help. They in turn have found a purpose, here and elsewhere, outside mainstream politics, which they despise.

For at the heart of Spain's economic problem is its political system. In the first place the system of autonomous regions, with their own budgets and right to borrow on the financial markets. That delayed Spain's budget adjustment by a year, during which the central government cut spending but the regions raised both spending and borrowing. A large part of the government's current deficit reduction plan depends on getting regions like Andalusia, of which Seville is the capital, to slash their budgets.

On top of the regions, you have the cajas. Bankia, the bank at the centre of the crisis, was created only last year through a merger of seven troubled cajas. They merged their debts, took bailout money from the government, sunk some of their bad debts into a government fund and sold shares in the merged company, appointing former IMF boss Roderigo Rato as the CEO. What could go wrong?

Well it is now clear that Bankia was hiding bad debts that will need 24 billion euros to sort out. The two biggest cajas that formed Bankia were both effectively controlled by local politicians from the ruling Partido Popular. One has recently walked away with a 14m euro payoff, despite presiding over the biggest bank collapse in Spanish history.

A demonstrator hit a pot during a protest to mark the anniversary of the Indignados movement The Indignados movement is now one year old

When opposition politicians called for a parliamentary inquiry into the bank's collapse, the PP used its parliamentary majority to squash the proposal. Ditto any attempt to force Mr Rato to testify to a parliamentary committee.

Raul Limon, the Seville based political correspondent for newspaper El Pais, says:

"The cajas were banks who used regular economic rules but with a political background - so it's like getting a politician to hold your money. That's a caja. So maybe the politicians should be answering questions in parliament - and maybe they should be on trial. They paid three or four times the true value of land. They demonstrated economic growth and people believed they used the cajas to enhance social wellbeing - we now know they were buying land and selling illusions."

If Spain's banking crisis were happening in an essentially sound economy it might be containable. But if the banks do as calculated need somewhere between 100bn and 400bn euros to staunch the crisis, then Spain will need an EU bailout. And EU/IMF bailouts come with one condition: increased austerity.

Prime minister Mariano Rajoy's entire credibility rests on his ability to avoid a bailout. Indeed only months ago he was asserting Spain's "sovereignty" against suggestions it needed European help.

So the tussle being played out behind the closed doors of Madrid, Brussels, Washington and Berlin now involves trying to engineer a direct bailout of Spanish banks with taxpayers' money across the globe, without the need for Spain to accept bailout terms similar to Greece, Portugal and Ireland.

Spanish Prime Minister Rajoy Spanish Prime Minister Mariano Rajoy is attempting to avoid a full scale bailout

They're rushing to get this done because Greece seems likely to implode whoever wins the 17 June election, and because a Spanish sovereign debt crisis would be massive: the capital flight of 100bn in January to March this year would look puny compared to the three trillion euros that could potentially leave the bond and stock markets of Italy and Spain.

But in a place like Andalusia any increase in austerity will fall hard on people. It's an under-developed region where, as in so much of euro-bolstered southern Europe, the biggest economic player is the state. The landscape is spectacular: the Sierra Nevada with a few peaks of snow even in mid-May towering above rolling hillsides of olives, oranges and wheat.

But there's a global olive oil crisis: the regional government had to inject 62m euros into olive oil cooperatives to get them through the collapse in prices. The regional unemployment rate is 30% and many farm labourers feel trapped by the current crisis, which, says Lola Alvarez, is just an intensification of a land crisis which is "always there".

Lola is a union organiser at Somonte, a farm abandoned as unworkable three years ago which has now been squatted by upwards of 50 people who are trying to revive it as an eco-farm. The directions to Somonte are "drive to a certain kilometre marker and look for the flags".

The flags, of course, display the face of Che Guevara. It's early, so the occupiers - who sleep nose to toe on the floor of two tiny farm buildings - are still stumbling into the ritual of black coffee and roll ups that attends all occupy protests. Some are farm labourers, some itinerant anarchists, some both.

"Before the crisis, because of low pay on the land, the majority of farm workers switched to the construction sector. Their jobs were taken by migrants, and also by mechanisation. Now construction has collapsed there's very little work on the land."

Spain, so far, is nowhere near as fractious as Greece. Whereas in Greece, after two years of rioting and political incompetence, you got the rise of "anomic breakdown" - social rootlessness and hopelessness - Spain has done the opposite: people have clung to their families, their village roots, their religion (and their secondary religion which is football) - or in the case of the young they have formed placid protest camps.

But the austerity in Spain has, in truth, been mild. I ask Raul Limon of El Pais if Spain could go the way of Greece:

"If Europe does not support Spain, yes. So far people think Europe cannot let us fall - and as long as we think that, people are waiting for the solution. The moment people think Europe is letting us fall, people will stop complaining and start protesting."

At a political level, for all the perennial fractiousness of Catalan and Basque politics, for all the corruption allegations, the system is holding in a way that the Greek system did not. There is no rapid formation and fragmentation of parties; no collapse of elites into warring factions. Yet.

And Spanish people know better than anybody in Europe how nasty it can get if politics fails.

On the Somonte farm, out of the blue, the occupiers are buzzed by men flying powered microlites. It's fun at first, until they spot that two of the flyers are displaying Francoist flags and realise its an airborne counter-protest.

Lola points to an old man shuffling quietly at the edge of the group of farm workers. "That's my father", she says: In the civil war the local landowners, Francoists, made him drink olive oil and eat grasshoppers to force him to vomit up the "red" that was inside him.

She draws two lines down her cheeks with stiff fingers: "He cannot tell the story without crying".

Paul Mason Article written by Paul Mason Paul Mason Former economics editor, Newsnight

End of an era

After 12 years on Newsnight, Economics editor Paul Mason has moved on to pastures new and this blog is now closed.

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  • rate this

    Comment number 19.

    Some time ago someone posted a radical solution to this issue of property in Spain, The Government 'nationalises' the empty property by buying it of the banks and then lets them out to council tenants. This will give; the banks some cash, remove the bad debt from their book, give housing to the poor and government income, enough to pay the borrowed money over 50 years.

  • rate this

    Comment number 18.

    Rajoy couldn't organise a bun fight in a bakery. Recently he was exposed as exaggerating the dept left by Zapatero's government, just so it appears that the PP had made improvements which they had not. Fact.

    Rajoy is like a headless chicken that had been stuffed and mounted, whilst the estranged head stares into the headlights of a fast approaching car.

    He is a completely clueless Francista

  • rate this

    Comment number 17.

    Triana is a great neighbouhood, quaint and picturesque, home to one of the most vibrant and creative gipsy communities in Seville. But to choose it to give a portrait of the whole of Spain is like describing England from a traveller's camp.

  • rate this

    Comment number 16.

    Two points- first, there's far too much black market economy here: if everyone paid their taxes that would undoubtedly help. My accountant encourages me not to declare if my clients are not registered for V.A.T.
    Secondly: forgive my naivety but we had all this in 1929 and the recovery plan was to create jobs and it worked - read"The End of Work" by J. Rifkind. So why aren't we doing the same now?

  • rate this

    Comment number 15.

    Those interested in keeping the euro alive, will come in and save the day.

  • rate this

    Comment number 14.

    Spain could increase employment and tax returns by bringing in "the black". Self-employed is horrifically expensive: 250€ social p.m. regardless of income + VAT and tax: small timers can't afford it. Add that employing workers, part or full time, is complicated and very expensive and you force huge numbers into moonlighting: nobody wins from this. Make legitimate employment cheaper!

  • rate this

    Comment number 13.

    From September, if unemployed in Spain, you lose your right to go to the doctor. Basically kill the poor... Rajoy claims that Spain does not need a bailout.. well, if you cancel people's health care, stop benefits, surprise! Money is saved!

    Stealth genocide from the party literally of Franco's people's children. Spain is no longer a civilised country and should be kicked out of the EU. Shameful

  • rate this

    Comment number 12.


    Why priority 'to make capitalism work'?

    Capital AND Labour, will work fine: allowed, under conscience

    Nothing new, same horror: fear & greed turn Fortune's wheel

    Sun still for crops, minerals to mine, factories & transport & shops ready, so the producer-consumers: but 'where is the money'?

    Land, plant, currency: 'owned' & hoarded, 'on-strike'

    Set the people free - as equals!

  • rate this

    Comment number 11.

    This is not austerity: it is stupidity.

    Would letting the banks go bust be any worse? When the solution is worse than the problem: try something else.

    Surely there is room here for housing cooperatives and encourgaing small workshops.

    For capitalism to work it needs its destructive phases. So why are the capitalists protecting the banks?

  • rate this

    Comment number 10.

    Andalucia is home to a quarter of Spain’s 5.6M unemployed. Known for olive groves, beaches & bull fighting, region is also increasingly known for its poverty. Spokeswoman for Seville City Hall said govt would not evict unless the building’s owner, Maexpa, lodged a complaint. Ibercaja, the savings bank that funded the development said it was also not planning to take any action.

  • rate this

    Comment number 9.

    M-15, also known as Indignados (Indignant) protest movement born on May 15, 2011 when hundreds of thousands of people occupied main squares around the country to demand change. The Indignados’ public protests have largely died down, but M-15 activists have formed neighbourhood assemblies all over Spain to help various causes, including blocking court-ordered evictions of mortgage defaulters.

  • rate this

    Comment number 8.

    Jericoa @1
    "the cycle"
    But this time, perhaps, with internet & social media, more than 'just the poor' will reject the on-going & recurring costs of inequality, even Francoists awaking: note the start, "low pay on the land"

    Jeremy @3
    Young spivs, led by old, trash village square, & our currency
    And we abandon?
    No, we possess!

    edcee @6
    Share 'the' money
    Maintain 'demand'
    Share job-creation DUTY

  • rate this

    Comment number 7.

    The building, short walk from centre of capital of Andalucia Region, was finished just 3 years ago - has double glazing & new wooden floors but the developer was not able to sell the apartments. Occupation was organized by members of the M-15 group which has spotted an opportunity in the country’s estimated ONE MILLION EMPTY HOMES for growing number of homeless.

  • rate this

    Comment number 6.

    In a recession all countries need time to recover. People out of work can't pay their tax so there is no money coming in. The only way is to roll over the debt, pay it later, then the money "saved" needs to be used to create jobs.

  • rate this

    Comment number 5.

    Sleeping on inflatable mattresses, few boxes to hold their belongings, 32 families have occupied empty NEW apartment block in Seville in S. Spain after being thrown out of their own homes. They share one cooker, cheap brown sofa. To others facing the prospect of living on the streets the families are living in luxury. They have set up a 24-hour watch to keep hopefuls out.

  • rate this

    Comment number 4.

    Treasury Minister Cristobal Montoro: risk premium says Spain has problem in accessing markets when we need to refinance. Country is beset by bank debts TRIGGERED BY THE BURSTING REAL ESTATE BUBBLE in 2008. Mr. Montoro wants Spanish banks recapitalised through EU mechanisms. G7 conference call afforded no answers.

  • rate this

    Comment number 3.

    Please people, wake up. Who would really lose out in the long term if the Spain (and others) left the Euro zone? The banks, of course, the politicians who have money and jobs tied up in it, the currency speculators. But would the "man in the street" actually be worse off? Possibly in the short term, but in the long term? Ask yourself, why are the politicians really so desperate to keep the Euro?

  • rate this

    Comment number 2.

    Spain - credit markets were closing to EZ's 4th biggest economy as G7 finance chiefs held emergency talks on currency bloc’s worsening debt crisis. Treasury Minister Cristobal Montoro - dramatic distress signal in a radio interview about the impact of his country’s banking crisis on govt borrowing, saying that at current rates, financial markets were effectively shut to Spain.

  • rate this

    Comment number 1.

    Simultaneously uplifting and depressing.

    The strength of values and community against the counter productive pointlessness of perceived leverage made real via a financial system.

    Non of this is new, we just get to play out the human dichotomy and experience against the backdrop of different colour wallpaper every time the cycle clicks around one more time.. Until we run out of clicks.


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