The markets are clearly stating that the same merciless ruthlessness that was deployed against the Greek people will now be visited on the Spanish nation.
Lest anybody thought they had gone on holidays for the summer, the dictatorship that is constituted by the financial markets reasserted itself with some vehemence this week by pushing the cost of borrowing to the Spanish State to over 7%. The markets are clearly stating that the same merciless ruthlessness that was deployed against the Greek people will now be visited on the Spanish nation. As in all their dealings, the profits of the financial speculators come before all else and if the Spanish working class have to be further bled economically to achieve this, well that’s capitalism.
In the wake of the most recent revelations of a horrific crisis in the Spanish banking system, following a property bubble which, like Ireland, is dragging down the domestic economy, a new round of horrific austerity has just been announced. Over the next two and a half years the plan is to raise €34.4 billion in extra taxes and secure €22 billion in cuts.
Unemployment benefits are to be cut. Public sector workers, already hit by sharp wage cuts of, are in line for a further axing of jobs and wages. The higher VAT rate goes from 18% to 21% while the lower rate which encompasses even food, goes from 8% to 10%. Following several years of previous attacks on their living standards and livelihoods, this new round of austerity will intensify the suffering of the Spanish people. Already 25% are unemployed with youth unemployment at a crushing 50%.
The recent EU Summit agreed in principle that the European Stability Mechanism could directly fund the Spanish banks. This was to save face for the Spanish Prime Minister Rajoy with a desperate pretence that the Spanish government would not find itself in the same position as Greece, Portugal and Ireland where every three months cold blooded bureaucrats from the EU/IMF/ECB arrive in their capitals to determine whether they are inflicting sufficient pain on their people to keep up the disastrous policy of salvaging the European bankers, speculators and financial system generally from their crisis.
This summer some thousands of Irish people will scrape together what they can for a short holiday in Spain. As well as availing of a well earned rest they could take a little time to learn about the acute economic situation in the country and particularly could dialogue with their fellow workers there. They could tell them of our experience with a government just twice as long in office as Senor Rajoy, which is carrying on exactly the same austerity policies as he but which has made the economic situation worse with unemployment having risen and growth falling.
Our visitors to Spain can also learn of the widespread resistance to the new austerity policies evident in current mass mobilisations of working people, the unemployed and the youth, most unreported in the Irish media.
Currently the sharpest opposition to the effects of austerity is being mounted by coalminers especially in the north west province of Asturias. There are about 8,000 miners with up to 30,000 downstream jobs depending on them. The regions where the industry is located are desperately dependent on the industry with whole towns and villages which would be economically wiped out should the mines close. But rapid closure is certain if a savage 63% cut in subsidies announced by the government in June is implemented. The subsidies are also for programmes of diversification to other forms of enterprise in the mining regions as mining is due to be phased out by 2018.
Relatively small in numbers and facing misrepresentation and abuse in the establishment media, the miners’ strike to save their communities has inspired millions across Spain. They marched to Madrid arriving on July 11 and were greeted by tens of thousands of supporters. Coming to plead their case, their government sent riot police and rubber bullets to greet them. One week later the movement against austerity broadened with possibly millions turning out in 80 cities in opposition.
The establishment in the European Union is worried. Spain has a population of 37 million. It is the fourth largest economy in the Eurozone and the twelfth largest worldwide. A default here would bring the financial markets system crashing down. But they are also worried about popular resistance to their austerity agenda to bailout that system. As in every other country in the EU, the political party that the Spanish working class built to represent it is in the camp of the establishment and austerity, but the Spanish workers have a long tradition of struggling for a different way going back to the revolutionary movement for socialism that was crushed by the fascist Franco in the 1930s. A renewal of that tradition would set Spain, and indeed Europe as a whole, on a radically different course from the unremitting crisis and despair that capitalism in crisis means.
The CWI relies on the donations from working class people around the world to fund our campaigns.Please donate towards building the CWI.