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, Economics editor, Newsnight 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 59.

    Lets merge all the Royal families of Europe into a Euro royalty.

    I'm not sure if the English people would accept a foreigner as Head of State.

    Lets stop pointing fingers, it doesn't help.

    A Robin Hood Tax would be a good start.

  • rate this

    Comment number 58.

    I thought this article was good ,I think it highlights just how unlucky the Spanish are to be in this mess,of all the countries in trouble Spains problem was the one interest rate fits all of the EEC,indeed for a number of years Spain spent less than Germany as a measure of GNP but with lots of people wanting to buy a home in Spain and the low interest rates it caused a boom followed by a slump.

  • rate this

    Comment number 57.

    After the European REVOLUTION the banksters will be first up against the wall closely followed by their co-rrupters the politicians.

  • rate this

    Comment number 56.

    #53. Chris888

    We have reaped as we sowed.

    We turned our backs on basic work. Dirty, best left to foreigners.
    Instead we determined to import just about everything.
    That way people not wanting to do work could make a living by spivvery.
    Ripping us all off by getting others to do real work.

    The real expert spivs accumulate money which they convert to wealth.
    And "our" politicians let them. Spivs

  • rate this

    Comment number 55.

    Everyone’s wish should be to put the economic experts to shame. Not admitting one’s wrongs is typical the characteristic of the one who claims to be God but is not. Over 6000 years have we and he lived in denial of our stupidity, by corrupting universal eternal laws. Google “The World Monetary Order to Come”.

  • rate this

    Comment number 54.

    . "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."
    Any mention of what the other side did during the civil war?I don't think there's much good to be said about either side but balance in an article would be nice.

  • rate this

    Comment number 53.

    50. ommadawn2000
    Most people seem totally unaware of where the fault lies, all I see is anti-Euro rhetoric. Anything left-wing or 'European' is treated as evil - this is the most common thought-form.

    With awareness come solutions

    Robin Hood Tax would sort out this problem - but the right-wing with their media are against it for obvious reasons - therefore people don't know about it

  • rate this

    Comment number 52.

    As a child in the 70s I would holiday in Spain with my family. It was different to London with safe neighbourhoods, friendly streets, bars and a well run economy. There was no boom and bust, Spain was isloted from Europe because we hated Franco, we had high crime, boom and bust, they just ambled along. With Franco gone they fell over themselves to copy us, that's what they got! Good luck.

  • rate this

    Comment number 51.

    Capitalism is based on the exploitation of the masses by the 1% who have 90% of the global wealth. It is inherently unjust & needs to be replaced. The global politicians are simply re-arranging the deck chairs on the proverbial White Star liner as it gains speed on it's collision course with the inevitable.
    It WILL hit the fan.

    Empire down.
    In the land of the blind the one eyed man is King

  • rate this

    Comment number 50.

    Only the right wing media ..stopping us in the UK from being aware of this.

    I think that most of us are very aware of where the majority of the fault lies. Most of us would like to see them held to account. However that doesn't provide an answer to the situation. Let the banks go by all means - but accept/be honest that a lot of other things will go with them.

  • rate this

    Comment number 49.

    Ewanmax.. I feel for you.. but stay on topic mate, or write to the BBC trust. People are starving in Spain... not thankfully in Scotland

  • rate this

    Comment number 48.

    If i held any capital in a Spanish bank i would make sure it would be withdrawn at the first opportunity. Put it in an American or British bank for security. When banks go bankrupt the first the general public learn of it is when the doors are locked.

  • rate this

    Comment number 47.

    Capitalism is unraveling. The political elite are still believing that their own BS world-view is going to give them a solution to the crisis. It's not. Their so-called solutions will do nothing but hasten the end of Capitalism as we know it. All the Left needs to do is sit back and watch.

  • Comment number 46.

    This comment has been referred for further consideration. Explain.

  • rate this

    Comment number 45.

    The British media seem to be loving watching other countries struggling now and blaming them for their irresponsibility - however the city of London is making a fortune out of this and partly caused it in the first place, yet the British refuse to regulate or tax the City of London to make them pay for the terrible social damage that is being caused.

  • rate this

    Comment number 44.

    Twice in two days I've seen glaring spelling errors. Yesterday it was that something had been paYEd for, today it's equally bad.

    Come on Aunty, get a grip, it's either there's A trumpeT, or there'RE SOME trumpetS, certainly not:

    there's only a few trumpets.

  • rate this

    Comment number 43.

    For capitalism to work you need capital (clue in the name there), not just virtual money debt underwritten by the taxpayer

    Bankers in Spain (and the rest) seem to have forgotten this simple fact, and are now starting to squeal like stuck pigs because they can't make any more pretend money

  • rate this

    Comment number 42.

    38. thesilentpsycho
    Totally right. People are so clouded against the Euro, thank goodness the brainwashed masses are not given a referendum, it would cripple us.
    The right-wing media that creates such things would NOT be there for Hyacinth Bucket when she's left out on the streets!

    Tax the bankers not the people, the right wing media is strong, but the truth is gaining a voice

  • rate this

    Comment number 41.

    The indigantion arises not from the lack of opportunities but an externally enforced austerity that is reducing services in health care, social services and edcuation, whilst the ex bankers / ministers walk away with healthy pay offs, as well as knowing that the government has not reduced / stopped the payments to the church.

  • rate this

    Comment number 40.

    The Eurocrats are debating legislation which will force bank shareholders to stump up for losses, rather than the taxpayers, but they say it will not be enacted before 2014. Sorry chums, you are considering placing an order to the blacksmith for a bolt while the horse is now galloping towards the door. Too little, to late, seems to be the new Euro motto.


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