Spain: Devastating impact of the economic crisis

Class battles brewing

Metal workers on Mayday

The Mayday demonstrations in Spain this year reflected increasing anger on the part of ordinary workers but also a sense of anticipation of what steps need to be taken in order to fight back against the growing oppression they face as the recession begins to bite and the bosses seek to pass the burden onto workers and youth.

The main Mayday march in Madrid, which attracted approximately 50,000 demonstrators, was jointly organised by Unión General de Trabajadores (UGT) and Comisiones Obreras (CCOO), which are the two biggest trade union federations in Spain. Cándido Méndez, the General Secretary of the UGT referred to the crisis as “the first great crisis of globalisation” and warned the government against giving into the Bosses attempts to make the workers responsible for the crisis through wage cuts and attacks on conditions. The bosses organisation, the CEOE, want the government to reform labour law to introduce new contracts for workers reducing severance pay to a maximum of 8 days for the first 2 years of employment and to a maximum of 20 days for each year worked after that period. Méndez stated that such a change was unacceptable and referred to it as “American style sacking” which would “condemn youth to an existence without any security and rob them of a future. This cannot be tolerated”. Toxo, the CCOO leader, added “we are not going to submit our workers to the infantry of the political and economic attacks coming from the right.” Both unions, marching under the slogan of “Employment, public investment and social protection” were urging the government to take action to curb the worst effects of the crisis but failed to state what action they would take if the government’s policies failed to work. This was in sharp contrast to the demonstrators, who seemed to be quite clear on what they wanted – a general strike now! With unemployment and house repossessions at record levels, ordinary workers can testify first hand that government policies are not working. Many press reports on the many regional demos that took place all over the country referred to the demonstrators chants, calling for the unions to set a date for a general strike.

Mounting anger

Youth at the forefront

Representatives from the CWI were present at the demonstration in Granada, Andalucia, attended by an estimated 6,500, a huge turnout for a regional city. We were greeted by the bizarre sight of a delegation from the Civil Guard (special police force with some military powers) holding up a banner calling for the right to demonstrate! There were many other groups of workers marching behind their own banners, such as postal workers, local government workers, workers from a local cement factory and most audible of all the metal workers, who have been involved in a long struggle with employers to secure the agreed industry rate of pay. Many of the demonstrations this year were better attended than they have been for a while, most probably due to the economic crisis. Unemployment has sky-rocketed in Spain and in the province of Granada there are estimated to be as many as 30,000 people unemployed and living without any state subsidy at all! Clearly these events have had an effect even on the leaders of the trade unions in Granada, who publically called for an “urgent change in the system” at the demonstration. The CCOO representative warned the bosses of the dangers that lie ahead “if investment was not increased, coupled with proper training and employment”. The march was vibrant and quite. Groups of youth lead the chant for a general strike and a communist youth band helped to up the tempo with a fantastic drumming routine. The anger of the marchers was evident but so was their thirst for ideas as evidenced by the warm response CWI members received to our Mayday statement.

In Málaga, the march was even bigger, with an estimated 40,000 on the demonstration. It has the highest rate of unemployment throughout the region, currently standing a staggering 27.18% of the active population! The anger displayed on many of these demonstrations is a testament to the dramatic turnaround of events that has occurred recently in Spain and the psychological effect it has had on the Spanish working class.

Spain’s economy has experienced unprecedented growth rates for a period of 20 years until now. Year on year the economic boom saw the rich grow richer and many, including the trade union leaders, had drawn the conclusion that Spain had emerged from the doldrums. The idea of the need to change society had been ditched; Spain was beginning to punch its weight again in Europe and the world. Capitalism could be managed and Spain would continue to prosper, so they said. However, the current recession and the pressure from workers below has forced many of the leaders of these organisations to begin to question the validity of these ideas.

Government divisions

Another mark of the crisis has been the effect it has had on the PSOE government itself. On the one hand, the government would like to take advantage of the severity of the economic conditions to usher in labour reforms which would make it easier for the capitalist class to hire and fire as well as attacking working conditions, enabling them to maintain profits at the expense of the workers, but on the other hand it does not want to act too early. It is split, not on the principle of “reform”, but on the question of timing and method. Prime Minister Zapatero in particular is eager not to act prematurely and thereby provoke a movement from below, whereas others such as the ex-minister Solbes, who resigned from the cabinet in April, are clearly in favour of pushing ahead with reforms now. However well the matter is disguised by the government’s spin doctors, this was the political essence of the split, as a member of Solbes´ team later explained in El País 19th April: “He was not tired, it was that he was convinced of the need to take advantage of the crisis to introduce structural reforms that would be painful and unpopular but necessary in the medium term.”

No signs of recovery

The depth of the economic crisis in Spain is only likely to intensify in the short term despite the protestations of some that recent rises in the Spanish stock market are the first signs of green shoots of recovery. Recent figures however would indicate otherwise. PSOE Prime minister Zapatero may try to remain upbeat and complain about opposition Partido Popular leaders “talking Spain down” but in reality they may offer a more honest appraisal of the economy, not least because they fear they may inherit the situation if the polls are correct and they are elected to government at the next election. In a recent interview in the Spanish daily El País, a leading PP (Partido Popular) spokesperson remarked that the truth about the Spanish economy was that it was “worst and longest recession in its economic history. We have not touched bottom yet and don´t know how bad things are going to get.” Unemployment in Spain now stands at 4 million, the highest in Europe, yet its population is only 45 million (roughly two thirds of UK population). A recent EU commission report revised downwards its predictions for growth in the Spanish economy. This year it is due to fall by 3.2% and in 2010 it forecasts no more than 0.2% growth in GDP. This anemic rate of growth will see unemployment continue to rise and current estimates suggest that it will rise from the present level of 17.4% to 20% next year. However this may be a conservative estimate as Spain has also seen its public deficit rise to 8.6% of GDP. A report by Barclays Capital has predicted that this will grow to 11% in the course of 2010. If this is the case it will mean that there will be huge pressure on the government to reduce public spending including unemployment payments and pensions not to mention salaries and jobs in the public sector.

Class tensions

This will only serve to further fuel the flames of class tension as the bosses will be calling on the government to “take action” before the matter gets out of hand – a euphemism for making the workers pay for the crisis. However the truth is that the Spanish working class has already paid the price of the crisis and is close to breaking point. An unemployment rate of 4 million is scandalous but to add insult to injury, 1,127,000 of these people are left without any visible means of support as their entitlement to unemployment pay has expired which in turn has lead to a record of 180,000 house repossessions in the last year. Swine flu may have caused some alarm but the real epidemic of unemployment has proven to be much more of a threat to the well being of many Spanish working class families. This is especially so amongst the youth where it has spread like a virus going up from 21% to a current level of 35%! The soaring levels of youth unemployment contributed to the impetus behind the recent wave of student strikes in opposition to the hated Plan Bolonia which is an attempt by the government to introduce UK style student loans and closer control of the curriculum by big business. This lead to mass demonstrations and occupations.

Much of Spain’s economic success over the last period has been fuelled by the construction boom, Spain built more houses last year than France, the UK and Germany put together. However this was mainly sustained by the high property prices in northern Europe and the credit expansion which attracted significant foreign investment. So great was its effects that the bosses of construction firms were often referred to as “The brick rich”. Yet now the crisis which started in the US and spread to Europe has seen this situation turn into its opposite. The brick rich are no more and the Construction industry has collapsed which has had a huge effect on those working in the construction industry and those who depended on it such as electricians, plumbers and even estate agents!

From construction boom to housing crisis

House prices have actually declined for the first time since 1993, over the last year they have fallen by 30% and are still in decline. Building licenses have declined by 60%. Banks that have been supporting these construction companies have had to agree to swap bad credit for property causing the banks to further reduce the price by as much as 30% in one go. This in turn has infuriated the construction industry as it has forced existing firms to offer similar reductions. Yet despite these reductions, a measure of the depth of crisis and in particular the position of many ordinary families is that there remains a housing glut of between 600,000 to 1 million units. The contradiction is plain for all to see that amidst a housing crisis 1 million homes lie empty which could be occupied by homeless families or young people who are forced to live in cramped conditions simply because they are still unable to afford a home of their own or be able to rent at a reasonable price! These buildings are monuments to the failure of a system which is unable to offer basic shelter to those that helped build them! The workers’ movement should be targeting these buildings and campaigning for the state and local authorities to take them over to rent at reasonable prices to those in need. This would generate enormous support and restore the confidence of the working class in their ability to influence events and change society however it would also require organisations be built which are capable of that task.

The need for a general strike

In response to the crisis, the Basque trade unions have called a general strike for 21 May, although shamefully neither the UGT nor CCOO have supported the call as yet. This could be the initial stage of state wide response to the economic crisis if it were used as a spring board for further action. One thing is for certain: it will certainly put further pressure on the UGT and CCOO to mount a more effective response than they have done to date. In recognition of the pressure that the trade union leaders have been put under by their members, the leader of CCOO commented on 25 April in a Galician daily newspaper “the possibility of a General Strike becomes more and more likely as the effects of the government’s economic strategy fail to achieve the desired effect. We cannot rule out a general strike in the months after the summer”. This is hardly an inspiring call to action but rather a reluctant admission of what might be necessary to prevent an explosion of anger threatening the position of the current leadership. Nevertheless, even if the current leadership were forced by the unbearable pressure from below to call a general strike it would be a huge step forward

This would show the power of the working class in action and begin to pose the question of who really controls society and in whose interests it is governed. This issue has already been raised in some way by the PSOE government’s “economic rescue package” which saw the Spanish banks bailed out to tune of 150 billion euros at the same time as Spanish workers were being ejected from their jobs and homes all for the cause of “economic stability” – but whose economic stability? Certainly not the 4 million unemployed, nor the 1,127, 000 currently without any official means of support or the 180,000 who have lost their home! It is even possible that the scope of such industrial action may provide such a threat to the capitalists that they are prepared to temporarily cede concessions but such benefits would be short lived as inevitably they would move to try to take back what they have given as soon as an opportunity arises. Precisely for these reasons it is essential to build a robust and genuinely socialist party in Spain and unite the various workers organisations around a socialist programme, which would enable workers to create a new socialist society, based on democratic control and planned to meet the needs of the majority.

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May 2009