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Capitalism is the Crisis (Part 5): Millions in Spain Rally to Fight Harsh Austerity Measures

By Asad Ismi

During November 2012, Europe erupted in anti-austerity demonstrations, with protestors clashing violently with police in Spain and Portugal, where general strikes were declared. Millions of European Union (EU) workers participated in the demonstrations, which spread to Italy, France, and Belgium. The demonstrations were organised by the European Trade Union Confederation using the slogan: “For Jobs and Solidarity in Europe. No to Austerity.” More than a million people participated in the general strike in Spain which is Europe’s fourth largest economy and has been particularly hard-hit by harsh austerity measures.

Dr. Carles Muntaner is Professor of Nursing and Public Health at the University of Toronto. He is Spanish and Catalonian, a native of Spain’s Catalonia province, the capital of which is Barcelona, the country’s second largest city. Muntaner works in both Spain and Canada and travels back and forth between the two countries. He was in Spain from July 2011 to July 2012, working with the Indignados Movement which opposes the Spanish government’s austerity policies through various campaigns. Spain is currently ruled by the right-wing Partido Popular (PP–Popular Party) which took power in November 2011.

Prof. Muntaner belongs to a unit of the Indignados movement called “Acampada 15M” which is focused on public health issues. Acampada means occupy and 15M refers to May 15, 2011 when a famous demonstration took place in Spain (inspired by the Egyptian Revolution) which proved to be the catalyst that started the Indignados Movement.

Q: Tell us about the Spanish government’s austerity measures which were first launched in 2008 under the rule of the Spanish Socialist Workers Party (PSOE).

Muntaner: The current government of the Partido Popular cut six billion euros [$12 billion] from the health budget. Three billion euros have been cut from the education budget and 20,000 teachers laid off. In the health area subsidies on 425 drugs have been eliminated and 283 million euros have been cut from homecare leaving 250,000 people unattended. Some hospitals have been partially privatized. A regressive sales tax of 21% has been imposed which especially hurts the poor.

There have also been severe cuts to welfare payments that are increasing poverty to such an extent that 44% of families in Spain are now in an economically precarious position. These families which comprise 20 million people are living on 12,000 euros a year per family which is less than required to pay minimal expenses in Spain. This is an unprecedented level of poverty.

Labour market reforms have given employers the right to fire workers for any reason they want including mere expectations that are not even real. For instance if employers do not expect an adequategrowth rate for their business they can fire as many workers as they want. The real goal is lowering wages which the government has achieved. Workers still in the labour market are afraid to rock the boat and will accept lower wages. The result of the lowering of wages has not been the creation of employment but of unemployment.

There are half a million more unemployed people in Spain since the government started implementing austerity measures. Hirings have fallen by 4%. The expectation was that hirings would increase once the government passed the law making it easier to fire workers. But the opposite has occurred and firings have increased by 70%. The goal really was to put the working class in its place which stems from a strong fascist tradition we have in Spain that is very anti-worker.

Q: Tell us about this anti-worker fascist tradition.

Muntaner: I don’t use the word fascism lightly. I am talking about the

strong tradition of anti-worker practices of the present Spanish ruling class which is the same class which ruled Spain during Franco’s fascist dictatorship. For example the third wealthiest person in the world is Armancio Ortega from Zara province in Spain. In his sweatshops in Morroco, Ortega pays women two euros per hour [about $4] working 65 hours per week. The intention behind the current labour reforms in Spain is to reduce Spanish wages to the level of those in Morocco.

Let me give you the example of Andrea Fabra, a wealthy Congressional deputy of the ruling Partido Popular. Her government recently cut the 400 euro [about $800] a month payment to long-term unemployed people in Spain. These are people who have nothing left and no chance of getting a job. Fabra and other PP deputies applauded these cuts in the Congress very enthusiastically and she said clearly in her speech “Screw them”, meaning the workers, the poor and unemployed. So this is the fascism I am referring to. Spain still has a fascist culture. That is a very fascist act: insulting the weak and poor. Fascism involves not just raising your arm but a whole psychology of contempt for people who are not wealthy. It is about dehumanizing the poor and oppressing the workers. You can see a video of Fabra’s vicious speech on YouTube.

Q: How does such fascist tradition benefit the rich in Spain?

Muntaner: Spain is a weak welfare state because the country was ruled by Franco’s fascist dictatorship for 36 years from 1939 to 1975. As a result, the state’s redistributive policies are pitifully inadequate. For example, the taxation system is very regressive. The average Spanish worker pays about the same percentage of his or her income in taxes as the average Swedish worker. However, the richest 1% of Spaniards pay only 10% of what the richest 1% of Swedes pay in taxes. So you can see how enormously the taxation system benefits the rich in Spain.

Also, tax fraud overwhelmingly accounts for the wealthiest fortunes in Spain. The top 0.12% of Spanish corporations account for 74% of the tax fraud in Spain which amounts to 44 billion euros [$88 billion] per year. These are the highest ranking companies in Spain, the ones that make 150 million euros per year. The state should obviously collect the appropriate tax revenue from this massive amount of money, which would then enable it to spend much more on social programs.

Last year, a whistleblower in Switzerland revealed the names of prominent Spanish bankers who had billions of euros deposited in Swiss banks—vast sums that were not declared to the Spanish government. This is one of the structural reasons why the Spanish state is so inequitable. Spain is not a poor country and its economic indicators are quite close to the European average, but the state is financially weak because the rich do not pay their fair share and that comes from the tradition of being a non-democratic society with a very strong fascist institutional status quo that has never been changed even after Franco’s death.

Q: How did Spain’s fascist influence and resultant weak state interact with the capitalist crisis?

Muntaner: The weakness of the Spanish state explains why it could not handle the crisis of capitalism that struck the country in 2007 when the real estate construction bubble burst. The construction boom was based on cheap credit mainly from German banks and its collapse triggered the rcession that dried up revenue for the government which then had to borrow from the banks.

But the economic crisis did not originate with the bursting of the construction bubble which only precipitated the crisis. The real cause of the economic collapse can be traced back to the weakness of the state created by the long reign of fascism under Franco. It was weak in terms of its failure to distribute wealth and income equitably. Even after Franco’s rule ended, a deeply embedded fascist culture prevailed in succeeding regimes. They have all been ideologically conservative, even the so-called “socialist” parties.

The result has been to entrench a political and economic system that is inequitable and corrupt and whose main function is to serve the rich and preserve their wealth and privileged status. To these arch-conservative political leaders, raising taxes on the rich and on big corporations to the rates they should be paying—which would be the fairest way to deal with the financial crisis—was unthinkable. For them, cutting social services for the poor and wages for workers were the preferred right-wing policies, and the fact that this “solution” only made living conditions for the great majority of people even worse is a matter of complete indifference.The PP government would rather increase its deficit by borrowing more from the banks and prolong the recession than force its wealthy elite to pay their fair share of government revenue.

Q: Is there a major left-wing party in Spain that opposes austerity, neoliberalism and the agenda of the rich?

Muntaner: Unfortunately, no. The money interests in Spain including the banks and the upper-middle class that supports them, exercise power in both of the two dominant political parties: the right-wing Partido Popular (PP) which is now ruling, and the Spanish Socialist Workers Party (PSOE). The PSOE despite its name is not really a socialist or even a social democratic party. It is a social liberal party with a neoliberal economic program the same as the PP has.

The PSOE has a few social policies such as equity that make it slightly more egalitarian than the PP which comes directly from the Franco fascist tradition. The PSOE’s promotion of the neoliberal agenda has been reprehensible. Both parties have cut the taxes on the rich. Jose Luis Zapatero, the PSOE leader who was Spain’s Prime Minister at the start of the economic crisis, said that being left meant reducing taxes. But the taxes that the PSOE cut by 20 billion euros were mainly those that applied to the wealthiest citizens. The PSOE also slashed the funding of public pensions by another two billion euros. That’s the policy of our so-called socialists!

Given this political vacuum, it is very hard for the average Spaniard to have any faith in government, a disillusionment that explains the rise and activism of the Indignados. When you see the so-called socialists implementing the same policies that the right-wing party does, of course people are going to reject the whole political system. They don’t even want to identify with the terms right-wing or left-wing. The damage that social liberal parties such as PSOE have done in Europe and in Spain is enormous because they have discredited the egalitarian policy and tradition that socialism is supposed to stand for and implement.

None of these tax and pension cuts had to be made. The PP and PSOE could and should have raised taxes on the corporations and the rich to get the necessary revenue. But since they both represent the business and wealthy elites, they chose instead to punish average Spaniards—the workers and the poor who comprise the majority of the population.

The two main parties also bailed out the country’s banks instead of helping the people the banks are evicting from their homes all over Spain. These heartless evictions –500 or more every day—have caused a massive increase in homelessness and have driven many of those evicted to commit suicide.

Q: Tell us about the role of the European Union and the European Central Bank (ECB) in Spain during the economic crisis.

Muntaner: The European Central Bank has worsened the crisis. The ECB is not a real central bank as it does not loan to governments directly. A real central bank would buy the Spanish government bonds or government debt at very low interest rates to help Spain recover. The ECB acts instead as a private German bank and what it does is make loans to private banks in Spain which then in turn make loans to the Spanish government at 7% interest rate. This a very high rate because the Spanish banks are getting the money from the ECB at less than a 1% interest rate. This institutionalized form of usury is impoverishing Spain, draining a lot of money from the state and keeping it in a debt cycle from which it cannot escape.

As a result of this situation, the Spanish government does not have funds to stimulate the economy and people don’t have money to buy goods, so businesses have no incentive to invest or hire more workers. Only the banks are making money, and the EU and ECB are just instruments for increasing the profits of German banks and those of other countries. They are not concerned about anything else, which the main reason why both Spain and Greece are in such depths of economic desolation and despair.

This is a system very much staggering towards collapse. The Spanish economy has been shrinking for the last two years and the prospect is for at least another year of the same. There is a sense of chaos and an enormous level of anger and desperation among many millions of Spaniards. I see no end to the austerity measures in the foreseeable future and no plan for recovery at all. The future looming ahead is very bleak. Unless positive changes are made at the European level, a plutocracy led by the financial sector will keep running the show all over the continent, and democracy will be irrelevant.

Q: Tell us about the public resistance in Spain to the austerity measures and in particular about the Indignados movement. What does “Indignados” mean?

Muntaner: It means “outraged” and refers to the Spanish people being furious at what is going on since the capitalist crisis started there in 2007. The Indignados movement has emerged as a response to all the evictions, the steep drop in employment, the cuts in pensions and social services, the privatizations in health care and harmful changes in the labour market. Most people in Spain are suffering from these regressive measures, particularly the country’s youth.

Fifty percent of those aged 16 to 24 years are unemployed and unemployment as a whole in Spain is more than 25%. The slogan of Spanish youth today is “No Future, No Fear” and given this widespread sentiment, the Indignados Movement has grown, propelled by the younger generation that is outraged at what is being done to them. Their long-term life goals and expectations have been shattered, even for the most well-trained and educated. People are becoming aware that there is nothing to lose, so they are becoming fearless and bolder.

It is not just the youth. Whole communities are involved in the Indignados movement including pensioners who in Barcelona are leading the protests. The unions also have become emboldened because they too have nothing to lose. The labour market reforms have stripped them of the right to meaningful collective bargaining.

Q: In what ways have the Indignados opposed the government’s austerity measures?

Muntaner: The Indignados are not hierarchical and the movement is decentralized. This means that their actions and organizations vary in different parts of the country. The movement is very diverse and grassroots and not institutionalized. It is made up of different networks that overlap. The Indignados organize and participate in many anti-austerity demonstrations across the country especially in the recent general strike. In Madrid, the Indignados have been very successful in exposing the PP’s corruption in connection with banks that failed. The Indignados have also been able to stop many evictions.

In Barcelona, the Indignados have also prevented evictions and been behind the strikes in the health care sector. The Indignados in this city are part of the health care work force. Then there is an Indignados group called “Acampada Bancia”. Bancia is the name of a bank. This group is helping people whom the bank is trying to evict. The group rallies people to oppose evictions and occupies the area around residences targeted for evictions. The Indignados are also involved in opposing university tuition fee increases and in supporting teachers strikes as well as “The Squatters”, an urban movement that has been around for a long time.

The Indignados have even set up their own university which presents an alternative way of looking at events and emphasizes the need to be more critical. The movement has also created cooperatives. In September, the Indiganados tried to surround the Spanish Congress in Madrid, which led to major clashes with police.

Some Indignado groups are also involved in creating an alternative economy. They have committed themselves to social and economic transformation and have set up an entity called “Corporasec”, a network of cooperatives in Barcelona. Corporasec is aimed at creating alternatives to the capitalist system based on solidarity and cooperatives at the community level. It is a way of promoting popular empowerment. Corporasec has projects that advance egalitarian economic relations. They have a social market instead of a capitalist market that they created through bartering and co-operation.

Q: What do you think of the general strike in Spain in November?

Muntaner: The general strike marked a new level of engagement by working class groups. The good thing is that the unions were joined by the Indignados and the leftist parties. There was no sectarianism and these groups worked closely together. There is now an awareness that they have a similar goal, and that is very important given the Spanish Left’s tradition of sectarianism. This has been fortunately broken down. The common good now takes precedence over who takes credit or controls the movement. It is very positive that the Indignados are now joining in other battles. Traditionally the Left in Spain was sectarian and different groups would fight with each other. You don’t see this kind of internecine conflict any more.

Published in the CCPA Monitor, December 2012/January 2013

Asad Ismi is the CCPA Monitor’s international affairs correspondent. He is author of the forthcoming radio documentary Capitalism is the Crisis. This article is the fifth in a series on this subject.