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

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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
    0

    Comment number 179.

    marieinaustin @177
    Howard's End authority?
    Thanks for the "changed"
    More than you know!

    Most of 'the poor' never were 'so stupid'

    We survived, by odd jobs, budgeting
    Christmas charity-box welcome, but as a gesture

    There are both 'rich' and 'poor' unused or unable to budget
    Some will need help to manage even a decent equal income

    But don't forget, if most agreed on fair equality, no predators!

  • rate this
    0

    Comment number 178.

    mscracker @176
    "Equality soon lost"
    "It is said"

    Thanks: a 'known' fairy-tale

    Told usually 'with no questions asked'

    Your elaboration - from another fairy-story?

    "The folk" would regain, "the poor" would lose, unless govt "totalitarian"

    Income Equality might be imposed and maintained by God "as it is in Heaven"

    More likely by agreement, given understanding of freedom & democracy

    Good luck!

  • rate this
    0

    Comment number 177.

    Hi Msc. “It’s said that..” one place it was said was :-) EM Forster’s the Ms. Schlegels of Howard's End. A lot has changed. Yet people are still unable to control even their own bodies, ex., what/how much they eat/drink. They’re going to control what they spend?? After controlling soda sizes, will the govt divvy out our weekly allowances? This is what people think will save them? Crikey!

  • rate this
    0

    Comment number 176.

    167.James
    Why should the honest people of Europe be forced into poverty just to ensure that the wealthiest 1% don't lose any money?"
    **
    It's said that if you redistributed the wealth, within a short time the same folk would have the larger share&most of the poor would have made decisions that impoverished them in the 1st place.Only a totalitarian govt would ensure a different outcome.

  • rate this
    0

    Comment number 175.

    Merkel says ´you ain´t got the money honey-- then I ain´t got the time´

    A two tier Europe -- with Britain in the 3rd --getting closer !

    http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_07/06/2012_445793

    --and THAT in a Greek newspaper ?

  • rate this
    0

    Comment number 174.

    With German voters learning quickly about Parasitology, Hollande has lowered retirement to 60 (Germany 67 !)

    Cameron is in Berlin worried about British banks as Merkel takes everybody ´over her knee´

    Spain is crying like Greece (but not as yet so intense) --after the spanking.

    http://www.spiegel.de/international/europe/merkel-lowers-expectations-ahead-of-european-union-summit-a-837544.html

  • rate this
    0

    Comment number 173.

    Simmering are the people and wimpering are the politicians.

    Huddled up in Brussels frightened to speak and looking for someone else to blame for when the simmering turns to boiling.

    The deteriorating situation across the EU is accelerating too fast for any of them to keep up with. The worse it gets the more difficult it is to rescue.

    Run Rabbits Run..

  • rate this
    +1

    Comment number 172.

    More debt = money expansion = boom
    Less debt = Money contraction = bust

    The monster therefore needs perpetual growth

    We are now at tipping point from which there will be no return only delay of the inevitable

    This delay necessitates the surrender of sovereignty from state to private hands something that applies to all nations who must borrow THEIR money supply into existence

  • rate this
    0

    Comment number 171.

    It begins to strike me that economics is politics by other means - and we all know what Clausewitz had to say about politics.

  • rate this
    +1

    Comment number 170.

    #167 yeah and whom started that process with NR,BOS and RBS one Mr Crash Gordon whom seems to have vanished from public display.

    These should have been alowed to go bust but protect the savers ALL it did was mutualise corporations debts so the poor pay and the waelthy got off scot free. There is the problem

  • rate this
    +2

    Comment number 169.

    #164 perhaps we should go on a borrowers strike, stop borrowing and live within our means, that would make the bankers redundant. That why we are complicit. I now loads of people that have lived way beyond there means and the PARTY is over its time to pay the bill and there is going to be a mother of all hangover as a result. There was no real doom just debt

  • rate this
    -1

    Comment number 168.

    MrRight @166
    400ch, but… of banks,
    "nothing to do with"?

    Right, of course, productivity crisis: but… Why? How?

    The Earth 'a heavenly body', exhibits 'corporatism', but the specifics?

    What has been 'the structure' that bars or diverts from 'productivity'?

    Inequality has deprived of freedom to pursue 'value' in work

    Stable aggregate, universal income-equality, for macro & micro value

    Solid

  • rate this
    +2

    Comment number 167.

    Why should the honest people of Europe be forced into poverty just to ensure that the wealthiest 1% don't lose any money?

    For those of you who haven't yet woken up and still don't understand what is going on, what is happening is simply this:

    THE BIGGEST TRANSFER OF WEALTH FROM POOR TO RICH IN HISTORY

  • rate this
    +4

    Comment number 166.

    This is not capitalism, but corporatism.

    Capitalism would let bad banks go bust and move on.

    This is not a debt crisis, but a productivity crisis.

    Rebalancing European economies away from bloated public sectors and state hand-outs for the unproductive is a painful project that will take decades.

    Nothing to do with banks or bankers - that's just where the problem shows up.

  • rate this
    +3

    Comment number 165.

    The world has gone completely mad.

    Now that politicians can see the end coming they want to dispense with the middle-man and just give away taxpayers money straight to failed private banks (who's CEO's simply pocket £millions in pay, bonuses and pensions)

    This is one reason why in the UK the top 1000 richest peoples wealth has increased by £155bn since 2008 while we all suffer.

  • rate this
    +1

    Comment number 164.

    112 - " but no one held a gun to anyone's head and everyone was complicit in some way. What we're seeing now is just the painful adjustment back to the standards of living we can actually afford."

    Savers outnumber borrowers 6:1. We're being screwed to prop up the uberwealthy

    The stupefying size of the debts is from the runaway gambling of bankers with our money. We aren't all complicit at all

  • rate this
    0

    Comment number 163.

    stanilic @158
    We agree
    Message in 'falls'
    Of challenge & opportunity

    Trying to avoid the simplistic (what is 'it' that can in present context usefully be called 'Leninism', or 'Capitalism? 'Fair reward' v 'Defence of fair property'?)

    Trying to find the simple elements from which to build understanding, agreement, shared prosperity

    Equality now! See economy "Go!"

    FG@161: buy-back of souls, all

  • rate this
    +2

    Comment number 162.

    14m Euros for failure if it was not serious it woul dbe funny.
    He should be in jail

  • rate this
    +3

    Comment number 161.

    155 - the markets are rising because the rich are expecting to get bailed out with our money.

    Thats what they bought the politicians to do

  • rate this
    +1

    Comment number 160.

    #159 you could also add to that buy now, pay later and not want to work for it and then default when time to repay the debts

 

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