Amid Spending Cuts And Rising Unemployment,
Thousands Protest In Spain, The Police Also Joins
By Countercurrents.org
28 October, 2012
Countercurrents.org
Thousands of people have joined protests in Madrid, the Spanish capital city on October 27, 2012. The people are angered by budget cuts and calling on the government to quit. Austerity protests also took place in Barcelona, Valencia and other cities [1]. An estimated 3,000 police from the National Force have also protested the cuts. They played their whistles, set off firecrackers, and played music [2].
Demonstrators held a minute's silence with their backs to parliament, and then shouted "resign" with fists clenched.
Parliament was guarded by hundreds of police officers.
PM Mariano Rajoy's government plans spending cuts of about 40bn euros (£32bn) for next year as it tries to prevent the need for an EU bailout.
October 27th’s protesters came from all over the country and were met by vans of riot police.
One banner read: "The police can't take it any more."
One protester in Madrid, Sabine Alberdi, told AFP: "I came to demonstrate because they're taking everything away, our health, our education, our houses."
Having spent almost a year in office, Rajoy has tried to head off a full-blown EU bailout by introducing tax increases, labor reforms and public sector cuts.
Along with the people, the police say the cut backs are reducing security and have turned the Spanish Police Force into the most precarious in Europe.
‘These measures have led to any policeman converting into a miracle the ability to get the end of the month’.
The police demonstration was called by the Spanish Police Federation, The Federal Union of Police and Professional Union of the Police.
The Unified Police Syndicate did not attend the October 27th’s protest because they have already called ‘A grand demonstration’ for November 17.
Some of the placards in the police demonstration read: “Less security from the Police is equivalent to a more insecure society” and “the Police can’t take any more”.
Economic indicators from the country are not showing hopeful signs.
Spanish unemployment has risen again, this time to a level of one quarter of the workforce [3]. Only Greece has a higher unemployment rate in the EU. Spanish unemployment now is the highest in modern history and higher than at any time in the 36 years since the death of Francisco Franco. The current unemployment rate is more than double the average in the other nations of the eurozone.
This news comes when other bleak economic data from Spain shows that the plans to save Spain from economic disaster are not working. Earlier in the week, the GDP of Spain was reported to have shrunk by 0.4 percent in the last quarter, making it the fifth consecutive quarter of economic contraction in Spain.
Ebrahim Rahbari, an economic analyst for Citigroup in London, summed up the situation: "There is a huge amount of uncertainty in Spain right now. There are question marks about the banking sector and public finances and economic fundamentals suggest we will see a bailout sooner than later."
Ricardo Santos, an economist at BNP Paribas in London, was quoted by Bloomberg saying: “The situation is serious. There is still room for deterioration in unemployment. Activity is weak and the government will reduce jobs as there are strict targets to adjust the number of public sector temporary workers, especially in health and education.”
Justin Knight at UBS in London also viewed the new data with concern, and cautioned that more than unemployment was involved.
Sara Balina, an analyst in Madrid, noted: “It’s unlikely that the government’s forecasts will be met next year as fiscal consolidation accelerates.”
Elwin de Groot, a market analyst in Utrecht, said: “Contracting pressures in the economy persist. It will be very hard for the Spanish government to achieve its budget targets.”
Spanish banks are doing very poorly too. CaixaBank, which is the third largest bank in Spain, showed profits which were 42 percent lower than the previous year. Declining values of real estate in Spain were a principal reason as was the rise in bad loans, which rose from 5.58 percent to 8.43 percent. Banco Popular Espanol, another large Spanish bank, announced that its profits had fallen by 23 percent.
This bad news comes three months after the European Central Bank offered to buy Spanish bonds in order to keep the borrowing costs of the Spanish government as low as possible. Prime Minister Rajoy is considering asking for a eurozone bailout, and he is also considering stronger austerity measures.
Spain is the fourth largest economy in the eurozone, after Germany, France, and Italy. So what happens in Spain matters more than what happens in a much smaller economy like Greece. This has led Spain to replace Greece, Ireland, and Portugal as the most serious threats to the survival of the euro.
Other problems, however, like the secessionist movement in Catalonia, represent politico-economic problems that nations like Greece, Ireland, and Portugal do not have. One thing is clear: The slow disintegration of the eurozone and the dreams of a United States of Europe as a panacea for the problems of the continent remain elusive. When one out of every four Spaniards who wants a job cannot find a job, there are very fundamental problems with Spain.
The poor state of the country’s economy is evident from the news report filed from Spain’s Extremadura [4], excerpt of which is in the below:
Extremadura is one of Spain's poorest regions. The economy there is dependent on a construction industry which is now stagnant in the wake of Spain's property boom and the public sector, which is being hit hard by the Spanish government's policy of austerity.
In 2007, at the height of the construction boom in Spain, Forma, a company based on the edge of the historic city of Caceres in Extremadura, which makes the metal foundations and structures for buildings, employed 180 people.
Now the company has just 10 workers, and the head of sales at Forma, Jose Maria Garcia, warns that if it fails to get another big contract within the next three months, the business will have to close.
Garcia said: "Now investment has completely dried up and that's creating terrible levels of unemployment."
Spain's banks funded the construction bubble, and because the property market crashed, those loans turned bad, leading to a eurozone bailout for some Spanish banks in June.
Spanish banks are estimated to hold 184bn euros (£148bn; $239bn) in toxic property assets.
"The banks aren't interested in financing new buildings. They're only interested in selling the property they already have," says Garcia.
Spain's construction bubble created places like Cerro Gordo, which translates into English as Fat Hill.
The modern housing estate of several thousand apartments and small houses lies just outside the city of Badajoz, which is right on the border with Portugal.
David Martin now earns half of what he used to
Like other modern Spanish property developments, supply at Cerro Gordo outstripped demand.
Some of the apartments are empty and a section of dozens of small houses is cornered off and unfinished.
The collapse of the property market in Spain meant that construction companies such as Forma suddenly went from having too much work to hardly any.
The unemployment rate in Extremadura now stands at 33%.
Unofficial work, via family and friends or by other means, is how many of Spain's 5.7 million unemployed now get by.
It is why many economists argue that the official figure of 25.0% unemployment in Spain does not reflect the reality of a growing black economy.
Spain and Extremadura's construction sector has not only suffered because of the collapse of private investment.
Public funding for infrastructure projects has been reduced dramatically as the country's regional and central governments try to balance their budgets.
Construction has been hit by a drop in public funding for infrastructure projects
Businesses in the region that rely on public money have already been hit.
In the past four years, Afimec, a human resources company which runs training courses for people who are unemployed, has seen its income from the regional government fall by half.
Construction workers have protested against job cuts and high unemployment
Carlos Cue, a senior political correspondent for El Pais newspaper, says another bailout will come with more economic conditions for Spain, which will affect the government's tax-and-spend policies.
"The result is more austerity, more pain and more recession," he says.
At micro level, which is part of macro, the same precarious reality is surfacing. The following news report [5] from Spain is one such painful incident. The incident happened in Burjassot, Valencia on October 25, 2012.
A 50-year old man is now in hospital after jumping off his second floor balcony when he was about to be evicted from his home on orders of a judicial commission.
When all this was going on his wife was in the bed, medicated for depression.
Local police say the man fell feet first, but on landing he hit head and was left semi-conscious.
Whatever happens to the common people, the royalty carries a different story. The Telegraph, the UK daily, carried one such news report [6] from Madrid by Fiona Govan.
Crown Prince Felipe, 44, was approached by a woman as he left a church following the funeral of an aristocrat friend in Madrid on October 23, 2012.
The homeless Romanian woman opened her hand on his approach in the hope of receiving some charity, but the confused prince instead grabbed it and gave her a firm handshake, before strolling off to greet well-wishers.
The incident was caught on camera and has been described as "extremely cringe worthy" by royal commentators.
"Prince Philip on Oct. 23, 2012 faced one of those embarrassing moments that occur when protocol rules collide with life itself, or rather, with misery," wrote an editorial in El Periodico newspaper.
But it has also caused a backlash from those who say it serves as yet another example of how the Spanish royal family is out of touch with a nation mired in deep economic crisis. "Of course he confused the beggar with a woman who wanted to say hello. They live in the clouds and haven't yet realized the government is looting the country and people are struggling to eat," read one comment on a newspaper website.
Earlier this year, King Juan Carlos was forced to issue an unprecedented public apology after it emerged he had been shooting elephants while on a safari trip to Botswana, just days after he said he suffered sleepless nights worrying about Spain's unemployment problems.
The UK daily has not mentioned that these are the royalty who turn friends of the poor in poor countries with much hyped micro credit, and royalty is befriended for fighting poverty.
Source:
[1] BBC, “Spain austerity: Thousands join new budget cuts protest”, Oct. 27, 2012, http://www.bbc.co.uk/news/world-europe-20113664
[2] “Now it's the turn of the Police to demonstrate in Madrid”, Oct 27, 2012, http://www.typicallyspanish.com/news/publish/article_36027.shtml
[3] New American, Bruce Walker, “Spain's Unemployment Rate Rises to One in Four”, Oct. 27, 2012, http://www.thenewamerican.com/world-news/europe/item/13409-spains-unemployment-rate-rises-to-one-in-four
[4] BBC News, Tom Burridge, “Crisis in Extremadura: Spain’s worst-hit region?”, Oct. 26, 2012, http://www.bbc.co.uk/news/business-20082810
[5] “Man jumps off his second floor balcony when he about to be evicted”, Oct 26, 2012, http://www.typicallyspanish.com/news/publish/article_36021.shtml
[6] “'Out of touch' Spanish prince shakes hand of beggar”, Oct. 25, 2012, http://www.telegraph.co.uk/news/worldnews/europe/spain/9633830/
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