Spain and Catalonia are heading into an election. Jorge Amar and Scott Ferguson analyse the current economic and political situation.
Jorge Amar is a Research Scholar at the Global Institute for Sustainable Prosperity and the president, and founding member of, the Full Employment and Price Stability Association (APEEP) in Spain. He also edited and participated in Spanish translations of MMT texts, including Warren Mosler’s Seven Deadly Innocent Frauds and Bill Mitchel’s Eurozone Dystopia.
Scott Ferguson is Associate Professor of Film & Media Studies in the Department of Humanities & Cultural Studies at the University of South Florida. His book Declarations of Dependence: Money, Aesthetics, and the Politics of Care was published by University of Nebraska Press in 2018.
In a few weeks a general election will be held in Spain. The optimistic verdict of the Spanish mass media concerning the economy is clear: the Spanish economy is purportedly a paradigm of recovery and macroeconomic management that should serve as a model for other member countries of the Eurozone. If this is genuinely the case, however, then why is the Spanish miracle not providing any discernible hope for Spaniards? In surveys carried out by the reputable Centro de Investigaciones Sociológicas, 60.6 % of Spaniards identify unemployment as their greatest concern and for the most part perceive the economic situation as bad (35.7%) or very bad (14.9%). The answer is that most households have not shared in the “recovery.”
To the contrary, Spain’s alleged economic rebound has only normalized unemployment and poverty, as workers continuously lose ground in their share of national income to the owners of capital. “If the distribution that existed before the outbreak of the crisis had been maintained,” writes Javier G. Jorrín, “labour incomes would have to increase by 32.6 billion euros and Gross Operating Surplus (GOS) would have to be reduced by 8.1 billion. In short, a transfer of 40,000 million from capital to wages.” Neither the number of employed nor total wages have recovered from the crisis. As Jorrín also notes, “Spain currently has the same total wages (at current prices) as in 2008 with 780,000 fewer wage earners.” What is more, Spain remains the nation with the second highest unemployment rate in the EU, surpassed only by Greece.
It is unsurprising that high unemployment and uneven income distribution has been accompanied by a drastic increase in wealth inequality in Spain. This amounts to, on the one hand, an increase in the number of rich and ultra-rich from 144,600 in 2012 to 224,200 in 2017. Despite the economy’s precipitous fall during the first years of the global financial crisis, the Spanish 1% would come to possess 25% of the country’s wealth by 2017. On the other hand, poverty and social exclusion are spreading and affecting. As Isabel García reports, nearly one in three children under 16 years of age (31%) with 10.8% living in severe poverty. 13.1% of the Spanish population retired between 2014 and 2018. And 14.1% of the employed now risk falling below the poverty line.
At the same time, both centrist Social Democrats (PSOE) and centrist Conservatives (PP) in the Spanish government have approved debilitating austerity measures (euphemistically called “reforms”) that have strengthened capital in its struggle for national income. Spain’s social expenditure gap in comparison to other European economies has not been reduced at all. Totalling 16.8% of GDP, social expenditure in Spain is still significantly lower than the European Union average of 19.1%, with France spending 24.4% and Portugal 18% of GDP. The results of have been disastrous. While labor and capital battle over unpaid overtime, which today constitutes around 46% of overtime worked, Spaniards continue to lose confidence in the major labor unions, which all too readily concede to the government’s austerity measures.
Far from improving the Spanish economy, the growth strategy pursued by the PP and PSOE governments has exacerbated systemic problems, making life ever more difficult for the poor. Principally, the government’s strategy has been to stoke property bubbles and expand rental markets rather than spending directly on communities and delivering jobs to the unemployed. Such inflationary spending has reduced individual savings to a record low, mirroring the dangerous savings levels Spain saw on the eve of the financial crisis.
The latest real estate bubble arose in two stages. First, the Zapatero Social Democrat government legalized real estate investment trusts (REITs). Next, the Popular Party created tax incentives and expedited the sale of public property, housing, and companies to vulture funds. (This includes properties held by the “bad bank” created by the Spanish government in the aftermath of the financial crisis, when it relieved the four nationalized Spanish financial institutions of their toxic assets.) As a consequence, Spain has seen an explosion in speculative real estate investments and now ranks second in the world in real estate investment trusts. Spanish cities are pushing out the poor to make room for the wealthy. In the words of Manuel Gabarre and Sonia Martínez, city centers are being “reduced to renting flats to tourists and housing ‘expatriates’, people coming from other countries with highly paid jobs and who can pay a rent that the normal Spanish citizen cannot afford.” And newly privatized public companies have also ended up in the hands of vulture funds. From the airport manager (AENA) to the railway service (RENFE ADIF), the government is abandoning public infrastructures and responsibilities and, instead, delivering enormous sources of income to the private sector.
Should election forecasts prove correct and the PSOE maintains its grip on power, the PSOE government’s disastrous neoliberal policies will likely be carried out in full support of both Brussels and the major political parties on the right. A PSOE government will not lack allies in the Spanish parliament to pass neoliberal economic policy dictated from Brussels. Such parties include the PP, and the liberal “Ciudadanos” who, on economic matters, are typically allied with the Social Democrats in votes in the European Parliament. But could also include “Vox,” the party of the Spanish ultra-right.
That said, resistance does persist, and especially in the embattled region of Catalonia. It is striking, for example, that left-wing parties in Catalonia did not support the PSOE’s 2018 draft budget and have since received increased support in the polls. At present, the Catalonian party known as “Esquerra Republicana de Catalunya” (ERC) is predicted to expand its 9 current deputies to around 14 or 15. The Spanish central government has officially lifted its former suspension of the regional government’s powers, but the Catalonian government nevertheless remains inactive. If Catalonian authorities manage to hold autonomous elections, however, ERC representatives could go from 32 currently to between 40 and 43.
Still, the only ERC candidates who remain fully committed to the wishes of the Catalan voters are Oriol Junqueras (currently in prison) and Marta Rovira (exiled in Switzerland). They are also joined by Carles Riera i Albert, candidate for Catalonia’s anti-capitalist and pro-independence left-wing party CUP. Should they win in an autonomous election, anti-neoliberal representation would go from 4 to 8 deputies in the autonomous regions of Catalonia. Although this would not include representation in the Spanish Parliament, the Cortes Generales.
The fracture in the nominally leftist Podemos party is becoming most clear in Madrid’s local and regional elections, which are set to take place after the general election. Most indicative of this breakdown is the fact that Podemos’s celebrity campaign manager, Iñigo Errejón, has decided not to represent the party in Madrid’s upcoming gubernatorial election. Breaking with Podemos, Errejón is running as an independent on a business-friendly “Más Madrid” platform. Errejón’s campaign seems to hinge primarily on Errejón personal celebrity.
Moreover, Errejón is now openly joining forces with current neoliberal mayor of Madrid, Manuela Carmena, who is presently seeking re-election. As a retired judge and former member of PSOE-associated think tank “Fundación Alternativas,” mayor Carmena adopts the language of the left out as a publicity strategy and only when convenient. In her 2015 “Ahora Madrid” (“Now Madrid”) campaign, for instance, she promised to build a meager 4,000 new public housing units and to make Madrid an asylum city for mostly African immigrant street vendors who have been intimidated by the city’s police and high-end retailers. During her first term, however, Carmena has built fewer than 1,000 public housing units. She has betrayed Madrid’s struggling street vendors by using city funds for a public relations campaign that instructs consumers to avoid buying their goods. And she facilitated the sale of 1.27 million square meters of land owned the public railway company to property speculators and did so in brash defiance of social opposition movements, including the municipal group of her “Now Madrid” project.
Later commenting to Le Figaro on her failed promises, Carmena has characterized her platform as merely a “set of suggestions,” while dismissing the leftist politics she formerly courted as “inflexible.” With Errejón at her side, Carmena now speaks in managerial and technocratic terms about forming a “government of the best talents.” Thus far, however, such team-building has mostly translated into the firing of Carlos Sánchez Mato, a top leftist economist for the city government.
Podemos party leaders are now expressly distancing themselves from Errejón on account of his shift toward Carmena’s centrism. However, it is important to remember that Carmena first rose to power with the express support of Podemos and Izquierda Unida, suggesting that Podemos’s current identity crisis is hardly new.
A major wildcard in the upcoming election is the scandal involving high-stakes government corruption and Watergate-style criminality. Essentially, the PP utilized a corrupt faction of the national police to spy on Unidos Podemos and fabricate documents which, among other things, implied that the Podemos-associated CEPS Foundation had received $7.1 million euros in support from Hugo Chavez’s Venezuelan government. What is more, the PP has leaked to alt-right media sensitive personal information about Pablo Iglesias obtained illegally from a stolen cell phone belonging to a key aid of the Podemos leader. Podemos has repeatedly attempted to subpoena the high-ranking officer at the center of the plot as news of the scandal has come to light. In turn, the PP, PSOE, and Ciudadanos parties have consistently blocked all such subpoenas. Yet recently, the ruling PSOE party was rocked by further scandal when presidential press secretary, Alberto Pozas, stepped down in response to espionage charges, linking him directly to the leakage of the cell phone information. The question now is whether last-minute developments or revelations in this developing story will introduce any surprises in the forthcoming election.
Barring such a surprise, the foreseeable results of the election are not likely to change the neoliberal policies that have shaped Spain over the past 30 years. Tragically, the 2019 General Election will almost certainly spell the end the so-called “15M,” the anti-austerity protest movement that began in March 2011 and defined a generation of Spanish political resistance. But all hope is not lost. Across Spain there are pensioners, tenants, feminists, students and numerous collectives of workers such as taxi drivers, researchers, and hotel cleaners, who continue to resist the neoliberal order and demand social justice in the streets.