The International Writers Magazine: Spain 2012
It's Europe or Bust - Spain's Last Chance
‘It’s poignant and ironic that this year will mark the 100th anniversary of the sinking of the ‘Titanic’. On April 10th, 1912 around 11.40 pm, the majestic White Star liner fresh was let loose into the North Atlantic filled with arrogance and wealth ready to conquer the world, only to hit an iceberg four days later and sink to the bottom of the sea.
One can’t help feeling that the European Union, launched some sixty years ago and in particular the euro zone has suffered or could suffer a similar fate to the much loved liner if the present politicians, or should I say ‘duty officers on the bridge’ don’t get their act together and avoid hitting a similar, although metaphoric iceberg known as the ‘financial crisis’.
Angela Merkel, Germany’s Chancellor, has more or less rung the correct alarm bell following dozens if not hundreds of ‘sheet ice’ warnings over the past several years that have either been ignored or not been taken seriously by numerous European leaders, especially the ‘olive and vineyard’ southerners. They have allowed millions of Europeans to enjoy a fictitious welfare party, similar to the passengers on the ‘Titanic’ without thinking about the dangers lurking ahead. Her warning has been succinct and to the point, ‘Europe must be united, especially in the political approach to the present crisis or else it will suffer a major catastrophe worse than any other known in our lifetime.’ In other words, it’s now or never for a change in course – political strategy - and avoid smashing the continental ship into that big lump of ice waiting to sink us all. Spaniards, by the way are part of the crew!
As it is Hackwrites magazine last month, and the editor Sam North has melancholically given us a farewell editorial summing up his thoughts on the future, my small input on Spain will be as brief and hopefully as precise as possible. I shall start with the same punch line as ever.
Spain could bring down the Euro, if not the EU if it doesn’t get its act together.
However, the new government’s austere plan is packed with sledgehammers, chainsaws and bulldozers ready to take on every aspect of economic wrongdoing that the previous government left in the doomed ‘housing estate’. There are massive public spending cuts affecting everything from major infrastructure projects to civil service personnel. There will be increases in income tax – no one will be spared – and property tax. All kinds of government subsidies will be eliminated. The list is as long as Schindler's. New labour laws will be worked out to ease employment, i.e. start the ball rolling to hire those five million on the dole. The main one is the partial abolishment of general wage pacts – keeping them within major companies – thus allowing the small firms (60%) to carry out their own negotiations. Trade unions and employer federations have been urged to strike a deal or else the government will do if for them. The banks must continue with recapitalisation or face nationalisation, read the Savings Banks as the major problem of Spain’s financial woes. Many other changes are in the pipeline but the above are the main ones.
So what’s going to happen? Or more precise, what are the prospects of recovery?
The measures themselves are going to create initial hardship that could last at least two years. There is no doubt that unemployment could even continue to rise as the government savings take effect. However, if the country, that is the people, is able to understand and realise that there is no other way they could well assist in adding their grain of salt to the German chancellor’s plan and run with the rest of the European pack in trying to save this ‘obese’ continent. If it doesn’t, then all hell will break lose. The following major points are those that could make or break the new government’s plans:
- The Socialist Party needs to reorganise itself and reform its strategy, i.e. modernise into XXI century socialism. If they stick to Zapatero’s ideology of creating the III Republic and simply embark on a harassment program, the country is doomed (1st reason).
- The trade unions have to be tamed. If they turn the country into a hotbed of strikes from day one, the country is doomed (2nd reason).
- The Nationalist parties in the Basque country (including ETA terrorists), Catalonia and to a lesser extent Galicia have to be read the ‘reason’ act regarding independence. If they insist in causing trouble – which is unlikely as the present government has an overall parliamentary majority – the country is doomed (3rd reason).
- If the banks don’t rid themselves of their toxic assets (massive foreclosed real estate) and start lending money, especially to small businesses, the country is doomed (4th reason).
- If the judicial system is not reformed and devoid of all political influence, the country is doomed (5th reason).
- Finally the law enforcement agencies need pampering as much as possible. They will be the main ‘seamen’ ready with the lifeboats, if the country is finally doomed!
In a nutshell, the next six months will be crucial to see if Mariano Rajoy, the PM and his technocratic team can pull off a miracle and turn the economy round. I believe he has one ‘punch’ left.
He will use Brussels as his main ally in helping him push his reforms through. In other words he will use football club tactics of ‘team spirit’ as a European member to persuade his people to take the pill or else. It may just work but will depend whether Barcelona or Real Madrid wins the Spanish football championship; Nationalism versus the State all over again!’
Jan 9th Update
||Soraya Saenz de Santamaría is a perky and petite young lady - who had the audacity to pose in a fashion style mode for a local newspaper a few years back - has now been appointed Senior Vice President. She is acting as overall spokesperson in the newly elected government and what is more important, has been given the responsibility of Spain’s National Intelligence, Agency, the equivalent of the CIA or MI5/6.
She is forty years old, just given birth to her first child, is by profession a lawyer and holds the title of ‘State Lawyer’, one of the highest ranking achievements in the country’s legal system.
As a member of parliament during Luis Rodriguez Zapatero’s legislation she continually lambasted the socialist government with solid arguments for creating all the ills that have now come to the surface – and continue to do so – that need remedying.Mariano Rajoy, on the other hand is keeping a low profile allowing Soraya to hand out all the bad news as well as his governments’ badly needed economic reforms that include a rise in basic income tax that affects everyone. The medicine is hard to swallow including criticism from many conservative supporters such as the right wing media. However, like a good Galician he is remaining cool. He has refused to address the Spanish parliament for the time being (the opposition is already demanding his head) until the end of the month when he returns from the EU Summit to be held on the 30th, where he will obviously receive the blessing of his other colleagues in Brussels. In the meantime, his Vice will hold the fort fending off the newly born attacks that are emerging and that will possibly erupt in social disorder before her boss returns. Another update in a week’s time to see if my prediction holds true that Rajoy’s major aim is to tell the people of Spain that Europe – not his government – demands the reforms that he is pushing through in order to save the country from total economic collapse.
By the way, Soraya’s photo back in 2004 is quite sexy!’
© James Skinner. January 2012.