The Spanish ‘Adios’

Pablo Ouziel

Posted Apr 5, 2008      •Permalink      • Printer-Friendly Version
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The Spanish ‘Adios’

By Pablo Ouziel

When trying to understand the geopolitical reality of Spain, one must never
forget the two military bases the United States actively maintains in the
country. One of which currently serves as the main transit point between the
United States, Iraq and Afghanistan. In 2004, following a large-scale
terrorist attack in the country’s capital, attributed to Islamic terrorists,
Spanish voters swept the ballot boxes and demanded a new foreign policy. For
a brief moment during the after shock of destruction at home, the Spanish
population rose to a leading role in the resistance against illegal wars and
occupations. Soon after, José Luis Rodríguez Zapatero became Prime Minister
and Spain¹s troops were removed from Iraq, silencing angry Spaniards.

Four years later, this transitioned and fully-fledged western democracy,
which is yet to declare Franco¹s regime as illegal, presented itself in
front of the ballot box. Mr. Zapatero fell seven seats short in the
350-member lower house of parliament from winning the absolute majority. He
now has to build a governing coalition either with the Catalan nationalist
coalition Convergence and Union, which won 11 seats, the Basque Nationalist
Party, which won six seats, or to rally for support from several smaller
left-leaning regional parties and the United Left. His job during this
second term will be to keep the country united, save it from economic
disaster, and aligning Spain¹s Foreign Policy with the wishes of the people
who voted him into power. All of these will indeed be hard to fulfil.

Over the past decade Spain’s economy has been one of the strongest in
Europe, with 14 years of straight growth, and a booming property market. Now
the housing market is on the brink of collapse, inflation is running at a 12
year high of 4.4%, and unemployment is soaring. Spain, like the United
States, is going through the end of a housing boom and the start of a credit
crunch, however, the weight of the housing sector in Spain is three times
that of the housing sector in the United States and Spain does not have a
competitive enough industry to substitute construction.

According to Eurostat, in January Spain experienced an 8% reduction in
construction, the most drastic in the Euro zone. Much of Spain¹s ³economic
miracle² has been driven by consumption and construction. Construction has
come to represent 20% of the Gross Domestic Product and 20% of the labour
market. In the last quarter of 2007, Spain’s construction giants were badly
hit with combined losses totalling more than 200 million euros. While the
German Commerzbank believes a recession is reaching the country, the
Association of Spanish Savings Banks, FUNCAS, has said that the slowdown in
the economy will be greater in Spain than in the rest of Europe.

In the last few years Spain has seen the construction of 800,000 new homes
per year and there is no doubt that housing has become unaffordable for most
Spaniards entering the market, just as there is no doubt that there are over
three million unoccupied dwellings held by speculators. According to the
Bank of Spain, properties are 40% over priced. To add to this, a USB bank
study says Barcelona is not far behind New York when it comes to being one
of the most expensive cities in the world. Sadly Barcelona¹s salaries do not
align with the city¹s cost of living.

In the last eight months, Spain’s six largest banks, Santander, BBVA,
Popular, Sabadell, Bankinter and Banesto have watched a fifth of their stock
market value (EUR 36.7 billion) being wiped off. Some 60% of bank loans are
property-related and a spokesman for the banking industry association AEB
says; “The number of people not repaying loans is increasing in line with
the direction of the economy.” Delinquency on credit given by Savings Banks
to individuals and companies rose in January to 1.08%, the highest since
October 2000. Delinquency on mortgages grew 46.5% in 2007, and in January it
grew unexpectedly to the highest since 1994. The volume of delinquencies in
Euros increased 60% since the beginning of 2007. The Bank of Spain has
advised the Savings Banks to try and reduce their exposure to the housing

Unemployment, which never fell below 8 per cent, even in the good times, has
risen for the past five months in a row. It is rising fast specially amongst
immigrants working in the construction sector where it has increased by 92%
in a year. The increase in agriculture is even higher, at 139%. In the past
eight years, the Spanish population has risen from 39m to more than 45m. Mr
Zapatero legalised 700,000 illegal immigrants in his first term in office.
Many have already lost their jobs and the cooling economy has Spaniards
turning against them, especially now that 750,000 jobs are expected to be
lost in the construction sector alone, over the next couple of years.

Although Spain’s First Deputy Prime Minister Maria Teresa Fernandez de la
Vega, yesterday said that Spain¹s economy is no cause for alarm. Faced with
a global economy, which western investors are comparing to the ³commodity
shock² experienced during the 1970s oil crisis, Spain is going to have to
face reality and acknowledge that the country is living well over its means.
People in the country will soon understand that in the Government Bonds
market, global investors are already dumping Spanish securities, because
Spain mirrors most closely what is happening in the United States.

As for Spain¹s foreign policy, indifferent of what is promoted through the
mainstream media, Spain is behaving like a good ³client state.² Militarizing
and investing in the war against terror during Mr. Zapatero¹s first term in
office, Spain¹s military has been busy on international missions just as it
was during the times of José María Aznar. Today as Mr. Aznar celebrates the
five years of war in Iraq, proclaiming on the BBC that he would do it all
over again, the Fundación Alternativas, - of which Mr. Zapatero is member of
the board of governors - is advising the government to reconsider the
Spanish Military¹s 3000 troop limits on foreign participation.

Spain already has 258 effectives in Bosnia-Herzegovina, 778 troops in
Afghanistan and 1100 soldiers in Lebanon stationed at the ironically named
military base “Miguel de Cervantes”. More important however, is Spain¹s
military presence in Kosovo where Spain currently has 585 soldiers and 14
Civil Guards. These servicemen and women were stationed under a peace
mission led by NATO. After the unilateral declaration of independence by
Kosovo, which broke all the accepted rules of International Law and which
the Spanish government did not recognize, the Secretary of State for Foreign
Affairs Bernardino León, justified Spain¹s continued military presence by
saying; ³If the troops had been removed, Spain could not help as it is
helping now.² However, with the Spanish Security Services, confirming that
ETA is ³planning a violent summer campaign in Spain¹s popular tourist
destinations,² for Spain, with regional conflicts yet to be resolved,
actively collaborating with the international community to protect by
military means the territorial segregation of another sovereign State, could
be potential suicide.

The fact remains that George Bush has just authorized weapons to be sent to
Kosovo because its independence ³favours the security of the United States
and global peace.² It is also a fact that under Mr Zapatero, Spain¹s fight
against terrorism has followed a similar trajectory to that which is
currently being denounced in the United States. On January 19th, Indian,
Roshan Jamal Khan, along with 14 other people, was detained in Spain and
charged with plotting a terrorist attack; The Indian Ministry of External
Affairs says it still has no word from Spain on the charges that have been
pressed against Khan. Also, in a chapter dedicated to Spain, the UN¹s
Manfred Nowak, confirms that various NGO sources within the country, have
informed him of the fact that the Spanish security forces systematically
ex-communicate suspected ETA terrorists, and that just in the first ten
months of 2007, restricted the rights of 65 arrested in the Basque Country.
Of these 65 ex-communicated detainees, at least 24 have denounced torture
during their stay at Police Stations.

During the times of Aznar, we often heard the famous phrase España va bien
(Spain is going well), it has been a while since we last heard it, and it is
not surprising, for Spain is not going well at all. Spain is in a lot of
trouble because of the dream of a richer and better society modelled on that
of the United States. All Spanish people can do now, apart from staging a
run on the banks, is to brace themselves and hope that Spain¹s guarantor,
the United States, will stay afloat and remember to save us, even though we
democratically requested to pull our troops out of Iraq. Otherwise, Spain
might as well say ‘adios’.

Pablo Ouziel is a sociologist and a freelance writer based in Spain.