Spain is on the verge of passing a draconian measure that threatens fundamental values of free speech. Faced with ongoing protests over economic conditions, the Spanish government is about to make insulting police officers and protesting without permission crimes punishable by fine greater than dealing drugs or prostitution. Not since Franco has the country turned so decidedly against civil liberties and free speech.
Once passed by the Spanish Parliament, citizens who dare to protest without permission will face fines up to $810,000. It would be better to sell drugs which are subject to less than five percent of that fine.
Harassment or insults can be charged with fines as high as €600,000. An insult to a police officer is now treated as a “serious offense” with fines of €30,000. Most people consider insulting the government or police to be a core exercise of free speech.
The concern is that, as economic and social tensions grow, such measures may expand throughout Europe.
- The great Spain robbery: Pensioners protest as they watch their life savings vanish into the banks’ black hole
- Moody’s says no ‘clean bill of health’ for Spain banks
- Spain’s Economy Is Main Risk for Nation’s Banks, EU Says
- Spain’s economy strengthens but gloomy mood lingers
- Caja Madrid ‘ordered staff to hide’ preferential share details from customers ‘duped’ into signing their savings away
- CAM bank former ‘top two’ jailed with 1.9-million-euro bail release
- EU bank VP probed in Spanish corruption scandal
- PM: ‘Spain is out of recession but not out of the crisis’
- Large rally opposes moves for Catalan independence
- Madrid seeks talks with Catalonia to avoid independence referendum
The most expensive government on the planet—ours—was shut down over budget concerns, health insurance and passive-aggressiveness. The inane partisan squabbling most acutely affected those with the most to lose—the people at the bottom of the economic pile. Meanwhile, grossly unequal division of wealth and power is a growing blight on the face of humanity. Dangerous mechanisms of financial ruin are nurtured by governments while they spew rhetoric about helping citizens. A future in which reckless economic exploitation will diminish seems highly unlikely.
But what if another world were possible? One in which the spoils of predatory capitalism, subsidized by central banks and federal policy, aren’t rapaciously consumed by a tiny minority at the expense of the vast majority of global citizens?
In his captivating new book, “The Village Against the World,” Dan Hancox shows, in lyrical and penetrating prose, that not only is it possible, but “an observable fact.” And so begins his tale of the alternative.
Nestled in farmland about 60 miles from Seville, Spain, in the region of Andalucía, exists Marinaleda, a village of 2,700 people. The cry OTRO MUNDO ES POSSIBLE—another world is possible—adorns a metal arch over its main avenue. For 30 years, the citizens of this tiny pueblo have fought and won a struggle to create a utopia in which everyone has a job and a home. Communism seems too dismissive and combative a term for Marinaleda’s ability to exist in defiance of a system that has shattered surrounding towns, and entire countries around the world.
“The year 2016,” Hancox writes, “will mark the 500th anniversary of Thomas More’sUtopia … But … how do you go from a fevered dream, an aspirational blueprint, to concrete reality?”
[...] immunity for Franco’s helpers may be about to end. In Argentina, Judge María Servini de Cubría of the first chamber of the Federal Criminal Court in Buenos Aires issued international arrest warrants for four former Spanish police officers in mid-September. They include some of the tormentors of Galante and Chivite. At least two of them are still alive: Jesús Muñecas and Juan Antonio González Pacheco. There is “tremendous symbolic value” to Argentina’s decision to demand the extradition of Franco’s officers, 38 years after his death, says Chivite.
The Spanish attorney general’s office refuses to have them arrested, and for Spanish citizens there is no threat of extradition. Nevertheless, a judge on the Spanish National Court wants to summon both former police officers to determine whether they are willing to testify voluntarily before Servini.
To this day, the Spaniards have not legally come to terms with the crimes committed by the Franco regime against the leftists on the losing side of the civil war. The cases now being looked into in Argentina occurred during the time period from the coup against the elected government of the Spanish Republic on July 17, 1936, to the first free parliamentary elections on June 15, 1977. The parties of the left, which had been brutally persecuted for four decades, agreed to an amnesty law at that time to help facilitate a peaceful transition to democracy.
But now a wave of lawsuits is heading toward Spain.
The World Cup and European Championship holders will play Equatorial Guinea in a friendly in the capital, Malabo, on 16 November.
The German, French, Spanish and Swedish intelligence services have all developed methods of mass surveillance of internet and phone traffic over the past five years in close partnership with Britain’s GCHQ eavesdropping agency.
The bulk monitoring is carried out through direct taps into fibre optic cables and the development of covert relationships with telecommunications companies. A loose but growing eavesdropping alliance has allowed intelligence agencies from one country to cultivate ties with corporations from another to facilitate the trawling of the web, according to GCHQ documents leaked by the former US intelligence contractor Edward Snowden.
The files also make clear that GCHQ played a leading role in advising its European counterparts how to work around national laws intended to restrict the surveillance power of intelligence agencies.
- NSA chief Keith Alexander blames diplomats for surveillance requests (Guardian)
- US envoy to Germany says no laws broken in spy affair (AFP)
- US surveillance has gone too far, John Kerry admits (Guardian)
- Spy chief Clapper: We’ve been snooping on our friends for years (NBC)
- U.S. tells U.N. it won’t spy on world body (Reuters)
- Rand Paul: NSA may spy on Obama (The Hill)
- Finland says it was target of “massive” digital spying (AFP)
- Report: French and Spanish intelligence aided NSA spying (RT)
- Spain announces inquiry into alleged surveillance of citizens by NSA (Guardian)
- U.S. spying on Europeans a symptom of a paranoid government, Germans say (McClatchy)
- NSA Official: Obama Was Informed of Spying on Merkel’s Cellphone, Let It Continue (FDL)
- Rep. Mike Rogers: France should be ‘popping champagne’ over NSA spying (AFP)
- US ‘used its Yorkshire base to spy on Merkel’ claims whistleblower (Daily Mail)
- UK signs EU statement rapping US spying activities (Press TV)
United Nations experts have urged Spain to investigate what happened to thousands of people who went missing during the civil war and nationalist Franco dictatorship.
The plea came after a week-long visit to Spain by a UN working group, who met government officials and victims’ relatives in several regions.
[...] A network of victims’ relatives, the Association for the Recovery of Historical Memory (ARMH in Spanish), has a list of 41 mass graves, but says the remains have not been exhumed “because of a lack of funds”.
In 2008 a Spanish judge, Baltasar Garzon, decided to investigate the disappearance of tens of thousands of people during the Franco era. He ordered the excavation of mass graves – but the move was highly controversial.
In 2010 he was forced to drop the investigation and was suspended after Spain’s supreme court found that he had ignored the 1977 amnesty law. That law was passed in order to ease Spain’s transition to democracy after Franco’s rule.
Website owners whose sites profit from linking to unauthorized copyrighted material can now be jailed for up to six years under a new measure that passed today in Spain. Spain is considered one of the worst offenders in Europe when it comes to illegally downloading content; one study reported that 98.7 of music Spaniards listen to is pirated. The law will spare peer-to-peer filesharing sites, search engines, and users of the link-sharing sites.
The country enacted the law as a response to pressure from the US, where ironically the law is not as strict. Spain is in danger of being added to a list of countries that Washington considers to be the most egregious violators of copyright law, meaning it could be subject to trade sanctions from the US. Considering that Spain has just started recovering from the deep recession that began in 2008, it makes sense that citizens are downloading their music and movies instead of paying for it. But for the same reason, the Spanish government desperately wants to avoid angering one of its best customers.
The number of young Spaniards belonging to what has become known as the lost generation is up 2% since June to 883,000. Only Greece has a higher percentage of young people out of work, at 62.9%.
Among adult males, Spain has the highest unemployment at 25.3%, higher even than Greece. Despite the government’s claims that the worst has passed and that employment reforms will encourage firms to hire, the figures suggest it will be a long time before any upturn in the economy is reflected in a declining jobless rate. With the holiday season coming to a close, the numbers are likely to rise as workers on seasonal contracts go back on the dole.
With close to six million Spaniards out of work, unemployment is so entrenched that there was no political reaction to the latest figures, neither from government nor the opposition. Indeed, mentioning the economy at all has become virtually taboo across the political spectrum. Meanwhile, Spaniards and recent immigrants are deserting the country in search of work, with 500,000 leaving in 2012, 60,000 of them Spanish nationals, most of them to Latin America and Europe.
RECENT NEWS FROM SPAIN:
- Spain’s Public Debt Rises Above 2013 Target as Economy Struggles (Business Week)
- School scheme shows social impact of Spain’s economic crisis (FT)
- Spanish PM says economy in Q3 will be ‘better’ than previous quarters (Reuters)
- Spain reaps benefit of austerity measures, says economy minister (FT)
- Spanish Bad Loans Re-Spike To 50-Year High (Zero Hedge)
The International Monetary Fund (IMF) on Friday called on Spain’s unions and employers to work together to find solutions – including cutting workers’ wages – to tackle unemployment and stimulate growth so that more jobs can be created.
In its latest report on Spain, the IMF said government reforms need to go further to increase companies’ “internal flexibility” and “enhance employment opportunities for the unemployed.”
While lauding the government’s labor reform, IMF officials said the government should consider reducing taxes on companies that focus on hiring certain groups, such as the young and low-skilled.
[...] IMF technicians undertook a study to look at the effects of a 10-percent wage cut over two years accompanied by a reduction in social security contributions by one and two-thirds of a percent. It also examined broadening the base of the value-added tax (VAT) in two years, passing the now-reduced products, which have an 11-percent rate, into the general 21-percent category.
Spain tapped its social security reserve fund for the second time in a month on Monday, the Labour Ministry said, to help with extra summer pension payments as unemployment and retirement costs deplete government funds.
The government turned to the fund for 3.5 billion euros ($4.6 billion) on July 1 then for a further 1 billion euros on Monday. Spanish pensioners receive two cheques in summer and two over the Christmas holidays.
Spain was forced to tap the reserve for the first time last year to help pay pension costs, using some 7 billion euros.
Record high unemployment, which hit over 27 percent in the first quarter, and a growing number of retirees on a state pensions have put an unprecedented strain on Spanish social security funds.
The fund was worth 59.3 billion euros, or 5.65 percent of gross domestic product, after the operation on Monday, the Ministry said.
Last week the multimillionaire former treasurer of the ruling Popular Party (PP), Luis Bárcenas, was refused bail and remanded in custody pending trial on charges of corruption and tax evasion. He amassed a fortune worth tens of millions of euros hidden in foreign bank accounts, which were used to channel illegal payments from wealthy businessmen to PP ministers and officials.
This week, Spain’s second-largest circulation newspaper El Mundo published an interview between its editor Pedro J. Ramírez and Bárcenas.
Spanish Prime Minister Mariano Rajoy was allegedly paid from a slush fund operated by the governing People’s Party (PP) when he was a minister in the 1990s, according to documents published in the newspaper El Mundo. The accusations drew denials from the PP and calls for Mr Rajoy’s resignation, from opposition parties weary of austerity measures and an economy mired in recession.
El Mundo says it handed over documents, supposedly handwritten by former PP treasurer and senator Luis Bárcenas, to the High Court on Monday, and carried pictures on its front page of ledger entries which purport to show the names of Rajoy and other senior PP figures, along with the amounts they were allegedly paid.
by MIGUEL GONZÁLEZ
Spain and the US are expected to formalize an agreement in the coming weeks over the stationing of four destroyers at the naval base in Rota, Cádiz, for an initial period of over four years. The deal is worth 200 million euros to Spanish public company Navantia, which will be responsible for the maintenance of the four Arleigh Burke class vessels. The destroyers form part of the NATO missile defense shield and are equipped with Aegis combat systems capable of intercepting ballistic missiles.
by John Pilger
Imagine the aircraft of the President of France being forced down in Latin America on “suspicion” that it was carrying a political refugee to safety – and not just any refugee but someone who has provided the people of the world with proof of criminal activity on an epic scale.
Imagine the response from Paris, let alone the “international community”, as the governments of the West call themselves. To a chorus of baying indignation from Whitehall to Washington, Brussels to Madrid, heroic special forces would be dispatched to rescue their leader and, as sport, smash up the source of such flagrant international gangsterism. Editorials would cheer them on, perhaps reminding readers that this kind of piracy was exhibited by the German Reich in the 1930s.
The forcing down of Bolivian President Evo Morales’s plane – denied air space by France, Spain and Portugal, followed by his 14-hour confinement while Austrian officials demanded to “inspect” his aircraft for the “fugitive” Edward Snowden – was an act of air piracy and state terrorism. It was a metaphor for the gangsterism that now rules the world and the cowardice and hypocrisy of bystanders who dare not speak its name.
In Moscow for a summit of gas-producing nations, Morales had been asked about Snowden who remains trapped in Moscow airport. “If there were a request [for political asylum],” he said, “of course, we would be willing to debate and consider the idea.” That was clearly enough provocation for the Godfather. “We have been in touch with a range of countries that had a chance of having Snowden land or travel through their country,” said a US state department official.
The French – having squealed about Washington spying on their every move, as revealed by Snowden – were first off the mark, followed by the Portuguese. The Spanish then did their bit by enforcing a flight ban of their airspace , giving the Godfather’s Viennese hirelings enough time to find out if Snowden was indeed invoking article 14 of the Universal Declaration of Human Rights, which states: “Everyone has the right to seek and to enjoy in other countries asylum from persecution.”
Those paid to keep the record straight have played their part with a cat-and-mouse media game that reinforces the Godfather’s lie that this heroic young man is running from a system of justice, rather than preordained, vindictive incarceration that amounts to torture: ask Bradley Manning and the living ghosts in Guantanamo.
Historians seem to agree that the rise of fascism in Europe might have been averted had the liberal or left political class understood the true nature of its enemy. The parallels today are very different; but the Damocles sword over Snowden, like the casual abduction of the Bolivian president, ought to stir us into recognizing the true nature of the enemy.
Snowden’s revelations are not merely about privacy, nor civil liberty, nor even mass spying. They are about the unmentionable: that the democratic facades of the United States now barely conceal a systematic gangsterism historically identified with if not necessarily the same as fascism. On Tuesday, a US drone killed 16 people in North Waziristan, “where many of the world’s most dangerous militants live”, said the few paragraphs I read. That by far the world’s most dangerous militants had hurled the drones was not a consideration. President Obama personally sends them every Tuesday.
In his acceptance of the 2005 Nobel Prize in Literature, Harold Pinter referred to “a vast tapestry of lies, upon which we feed”. He asked why “the systematic brutality, the widespread atrocities” of the Soviet Union were well known in the West while America’s crimes were “superficially recorded, let alone documented, let alone acknowledged”. The most enduring silence of the modern era covered the extinction and dispossession of countless human beings by a rampant America and its agents. “But you wouldn’t know it,” said Pinter. “It never happened. Even while it was happening it never happened. It didn’t matter. It was of no interest.”
This hidden history – not really hidden, of course, but excluded from the consciousness of societies drilled in American myths and priorities – has never been more vulnerable to exposure. Edward Snowden’s whistleblowing, like that of Bradley Manning and Julian Assange and WikiLeaks, threatens to break the silence Pinter described. In revealing a vast Orwellian police state apparatus servicing history’s greatest war-making machine, they illuminate the true extremism of the 21st century. Unprecedented, Germany’s Der Spiegel has described the Obama administration as “soft totalitarianism”. If the penny is finally falling, we might all look closer to home.
Italy’s public debt reached a new high of 2.0413 trillion euros in April, an Increase of 6.5 billion euros from March, and 88.3 billion euros from April last year, the central bank said on Friday.
The April Increase in Italy’s massive public debt load owed Principally to a 0.5 billion euro rise in the cost of the public sector in the first four months of the year Compared with the same period of 2012, the Bank of Italy said.
The public debt of recession-hit Spain soared to a new record in the first quarter, hitting nearly 923 billion euros (1.2 trillion dollars), or 88.2 per cent of gross domestic product, the Bank of Spain said Friday.
That is up 19.09 per cent from the first quarter of 2012.
Catalonia firefighters were starting fires rather than putting them out this week during a demonstration held in Barcelona.
The emergency workers clashed with riot police while protesting over austerity cuts in the recession hit Catalonian capital.
Hundreds of firefighters, sporting yellow helmets and red jackets, grappled with police amid concerns over the latest proposed budget cuts.
by DEREK THOMPSON
Europe’s job market is a historic disaster.
The EU unemployment rate set a new all-time high of 12.2 percent, according to today’s estimates. But it’s the youth unemployment crisis that’s truly terrifying. In Spain, unemployment surged past 56 percent, and Greece now leads the rich world with an astonishing 62.5 percent of its youth workforce out of a job (graph via James Plunket).
Spain’s Bankia Decimates Savers As Stock Plummets; Police Officer Stabs Banker Who Sold Him Shares ~ Forbes
by Agustino Fontevecchia
‘While investors across the globe applaud Bernanke and other central bankers for pushing stock markets to record highs, retail investors and savers in Spain are facing massive losses. Markets appear to have forgotten Europe’s sovereign debt crisis and the woes in Spain: on Tuesday, new shares in nationalized financial institution Bankia began trading, closing the day at €0.57 ($0.74), marking a more than 80% drop from their floating price in 2011 when the banking group was formed. The average Spaniard is suffering, and the situation has gotten to the point where on Sunday, a police officer stabbed a former Bankia employee four times after a heated discussion related to the sale of preferred shares in the failed banking group.’
by Roberto A. Ferdman
‘[...] After spending nearly one-third of a $3 billion budget to build four of the world’s most advanced submarines, the project’s engineers have run into a problem: the submarines are so heavy that they would sink to the bottom of the ocean.
Miscalculations by engineers at Navantia, the construction company contracted to built the S-80 submarine fleet, have produced submarines that are each as much as 100 tonnes (110 US tonnes) too heavy. The excess weight sounds paltry compared to the 2,000-plus tonnes (2,205 US tonnes) that each submarine weighs, but it’s more than enough to send the submarines straight to the ocean’s floor.
Given the mistake, Spain is going to have to choose between two costly fixes: slimming the submarines down, or elongating them to compensate for the extra fat. All signs point to the latter, which will be anything but a breeze—adding length will still require redesigning the entire vessel. And more money on top of the $680 million already spent.’
by Charlotte McDonald-Gibson
‘Rocketing unemployment and poverty in some areas of Europe could lead to rising civil unrest, unless governments take measures to address the humanitarian consequences of austerity measures, the secretary-general of the International Federation of Red Cross and Red Crescent Societies (IFRC) has warned.
Bekele Geleta’s caution comes as police battle with rioters in Stockholm, where high unemployment and social deprivation in migrant communities have been blamed for a week of violence.
As Europe continues to grapple with the financial crisis, the situation for many young people is dire. More than half of under-25s are out of work in Greece and Spain. In some areas of Greece, that figure has hit 75 per cent, while in Portugal youth unemployment soared from around 30 per cent two years ago to 43 per cent now.
“If the number does not start being affected and start coming down, the more uneasy people become,” Mr Geleta told The Independent. “I don’t rule out social exclusion, tensions, uneasiness and unrest, because if people don’t have anything to do, and if people don’t see anything in the future, there is mental agitation, there is political agitation.”
Europe is experiencing its biggest depression since the end of the Second World War, with the number of people receiving food aid from the IFRC nearly doubling from 2.3 million in 2009 to 4.1 million today. Twelve per cent of Europe’s workforce is out of a job, while EU figures show that 120 million people – nearly a quarter of the bloc’s population – are at risk of poverty and social exclusion.
“The figures are not going down, said Mr Geleta. “So we are worried, and we would like to warn governments this could be a serious concern.”’
Another elected official is confirmed for Bilderberg 2013, this time the Spanish Minister of Economy and Competitiveness and former Lehman Brothers advisor, Luis de Guindos. The minister will be attending at the request of Bilderberg’s Spanish steering committee member Juan Luis Cebrián.
Only last week I confirmed the newly elected leader of the Swedish social-democratic party, Stefan Löfven, has received an invite to the exclusive meeting planned for Hertfordshire in the beginning of June. De Guindos will be the second confirmed elected official participating in the event. These announced participants will be followed up by many more elected officials asked to join the secretive club at the Grove Hotel, at taxpayer’s expense of course, even if Bilderberg itself describes the annual meetings as “private”.
The attendance of De Guindos at this year’s confab is interesting in the fact that Spain is one of the first nations that found themselves on the wrong end of the financial stick after the crisis hit home in Europe- as was possibly arranged at last year’s meeting. As Daniel Estulin reported on in 2012:
“The key message from the (2012) meeting: come hell or high water, it is imperative to preserve the functioning of the banking system. Spain´s Vice President received a dose of humility when she tried to push the issue of “responsibility” telling her high powered German Bilderberg colleagues that they should issue Eurobonds to save the system. The reply was more than telling: “go pound sand, little girl.””
It’s important to make clear that the current Spanish Minister of Economy and Competitiveness was an adviser to Lehman Brothers up to 2007, making him partially responsible for the mess that Spain is finding itself caught up in a few years after.
It’s significant that a member of Bilderberg’s steering committee (Juan Luis Cebrián) is inviting De Guindos to the table this year. It reveals that Bilderberg wants to make sure their pro-Euro policies will be properly communicated to Spanish officials, who can then sell it to the nation as a painful but necessary thing. Just like their Greek counterparts, Spain’s elected officials are summoned to Bilderberg to streamline the global objectives by a group of international bankers with the preferred policy measures they would like to see implemented. One could say that these elected officials are committing a treasonous act, as they cannot disclose what has been decided. Being a former Lehman Brothers adviser, the Spanish minister probably won’t need too much encouragement to execute these objectives.
To illustrate the involvement of the Spanish power structure in the annual Bilderberg meetings, just check out the royal family’s Wikipedia page, noting that all of the prominent members of the family are members of Bilderberg. Queen Sofia attends Bilderberg on a very regular basis, as does her husband King Juan Carlos. Now elected officials get to go behind the backs of the Spanish people as they swear alliance to an unelected and unaccountable body.
‘As Spanish unemployment reaches another record high, the residents of rural Marinaleda could be forgiven for feeling a little smug. In the small village in deepest Andalusia, the joblessness remains firmly – and almost certainly uniquely within Spain – at zero.
[...] Marinaleda is run along the lines of a communist Utopia and boasts collectivised lands (1,200 previously unused hectares, seized by a mass land-grab in 1990 from an aristocrat’s estate) which offer every villager the opportunity to work the fields, tending to root crops and olive groves. In Andalusia, where jobs are currently being lost at the rate of about 500 a day, any work is good work.
Marinaleda’s mayor, Juan Manuel Sánchez Gordillo, has gained national notoriety and has even been dubbed the “Robin Hood of Spain” after he and a group of labourers refused to pay a supermarket for 10 shopping trolleys filled with food, which they distributed to the area’s food banks, sparking headlines in countries as far away as Iran.’
‘The European Parliament president says measures to revive the European Union’s economy and create new jobs cannot be delayed until Germany’s September elections.
“The European Union has no time to wait until the German elections,” Martin Schulz said on Friday.
Schulz further called on the EU leaders to address youth unemployment, which is especially high in southern Europe, especially in Greece and Spain.’
‘Banks seized a total of 39,167 homes in Spain in 2012 as a result of foreclosure proceedings, according to a central bank survey of lenders published Friday.
The Banco de España study showed that in 83 percent of the cases the homes were primary dwellings.
The survey also revealed that more than half of the homes were turned over voluntarily by families. Of them, roughly 75 percent were handed over under the so-called “dacion en pago” procedure, whereby the lender fully discharges the borrower of the debt.
Banks seized the homes by court order in the other cases, with police intervention required on some occasions.’
‘A Spanish court on Tuesday suspended charges against Princess Cristina, saying there was not sufficient evidence that King Juan Carlos’s daughter had been an accomplice in an embezzlement case involving her husband.
Cristina, 47, was charged last month in the case, the first time a member of the royal family had been the subject of criminal proceedings since the Spanish monarchy was reinstated in the 1970s.
Tuesday’s ruling by the High Court of the Balearic island of Mallorca overturned an earlier judgment by Examining Magistrate Jose Castro, of a lower court. The charges could be reinstated if further evidence is unearthed, the High Court said.
The case, along with a number of other high-level corruption scandals – has deepened public discontent with the royal family and with alleged graft among the rich and powerful while many Spaniards struggle with 27 percent unemployment and a long-running recession.’
‘The first downloadable gun has gone viral.
The plastic firearm that can be churned out on a 3-D printer and easily assembled was downloaded at least 50,000 times Monday, according to the self-described anarchist who made it available for free online.
Cody Wilson of Defense Distributed, a collective of gun advocates, said the most downloads were done in Spain followed by the United States.
The prospect of terrorists getting hold of the guns by clicking a computer mouse chilled NYPD Commissioner Raymond Kelly to the core.’
by Paul Day
More than six million Spaniards were out of work in the first quarter of this year, raising the jobless rate in the euro zone’s fourth biggest economy to 27.2 percent, the highest since records began in the 1970s.
The huge sums poured into the global financial system by major central banks have eased bond market pressure on Spain, but the cuts Madrid has made in spending to regain investors’ confidence have left it deep in recession.
Unemployment – 6.2 million in the first quarter – has been rising for seven quarters and the latest numbers will fuel a growing debate on whether to ease off on the budget austerity which has dominated Europe’s response to the debt crisis.
“These figures are worse than expected and highlight the serious situation of the Spanish economy as well as the shocking decoupling between the real and the financial economy,” strategist at Citi in Madrid Jose Luis Martinez said.
The collapse of a property boom driven by cheap credit has seen millions in the construction sector laid off since 2009 and private service sector, worth almost half gross domestic product, has followed as Spaniards tightened purse strings and investment plummeted.
The malaise has been made worse by billions of euros in state spending cuts and tax hikes to reduce one of the euro zone’s highest deficits and convince nervous markets Spain can control its finances.
A wave of corrosive political scandals at a time of economic woe is exacerbating the outrage of European citizens, who are channelling resentment into street protests or at the polls.
Italy, Spain and Greece have all been hit by fraud or graft cases allegedly involving the top brass. France joined the ranks of scandal-hit nations this week after its former budget minister was charged with tax fraud.
“Everything is coming together to reinforce populist theories — the theory that ‘they’re all rotten’,” said Eddy Fougier, a researcher at the Paris-based IRIS think tank, which analyses international issues.
In France, outrage over the budget minister scandal has yet to erupt into popular protests.
But in some countries of southern Europe, which for several years have been hit by austerity measures more severe than in France, fury has coiled into potent blowback.
by Will Hutton
There was a time when to live a life virtuously was well understood. It embraced personal integrity, commitment to a purpose that was higher than personal gain, a degree of selflessness and even modesty. Those at the top may have got there through ruthlessness and ambition, but they understood that to lead was to set an example and that involved demonstrating better qualities than simply looking after yourself.
No more. Perhaps the greatest calamity of the conservative counter-revolution has been the energy it invested in arguing that virtue, whatever its private importance, has no public value. The paradox, the new conservatives claim, is only through the pursuit of self-interest can the economy and society work best. Responsibilities to the commonweal are to be avoided.
The retreat of virtue has become the plague of our times. Greed is legitimate; to have riches however obtained, including outrageous bonuses or avoiding tax, is the only game in town. But across the west the consequences are becoming more obvious. Politics, business and finance have become blighted to the point that they are dysfunctional, with a now huge gap in trust between the elite and the people.
The drama playing itself out in France is a classic example. François Hollande was elected president of France less than 12 months ago, promising an “exemplary” administration after the sleaze of the Sarkozy years. Then came Jérôme Cahuzac. Until four weeks ago, he was the French socialist budget minister, leading the crusade against tax avoidance. It now transpires that he himself had hidden ¤600,000 in a secret Swiss account. He has resigned, but it has triggered not just a crisis for the French president, but for the entire French political class and political system.
Already two former presidents – Chirac and Sarkozy – have been mired in charges of embezzlement and illicit campaign financing respectively. But the Cahuzac affair goes further – with illegality intertwined with hypocrisy. Already beaten into third place by the National Front in a recent byelection, Hollande’s socialists now face the charge not just of incompetence and lack of political direction but of cheating and lying. Who understands the need for public virtue?
With the mainstream political right in disarray and no less compromised, the danger is that the major beneficiary will be France’s National Front, riding the disillusion not just with politicians but with the entire elite. There is one rule for them, it seems, and another for ordinary people who confront austerity, declining living standards and unemployment at a 16-year high.
The extreme right’s pitch is clear – France can no longer trust its leaders. It must assert its republican virtues against its own elite, foreigners, immigrants, Muslims and even the interference of Brussels. Vote National Front.
Meanwhile in Spain, the prime minister, Mariano Rajoy, was recently alleged to have hidden €250,000 from the tax authorities. Now King Carlos’s daughter, Cristina, faces trial over her role in her husband’s allegedly nefarious business affairs. In Italy, Beppe Grillo‘s anti-elite Five Star Movement won nearly 30% of the vote as a protest against a political class that is corrupt from top to bottom. Grillo at least is not a quasi-fascist. Less comforting is the prospect that if he fails to get the constitutional changes he calls for, the unstable forces he has unleashed could easily manifest themselves in a much uglier form.
In these countries, what is needed are credible, clean politicians with a credible programme to take on the super-rich, restore virtue to public life and relaunch their stagnating economies. But popular opinion knows the new rules of the world of tax havens, bankers’ bonuses and corporate self-interest along with the ideology that justifies them.
Today, the state is seen as ineffective and repressive. The rich have no compunction in hiding their wealth and avoiding tax because selfishness is legitimate, even indeed a moral obligation. Electorates doubt not just their politicians, but their capacity to do anything even if they were minded.
Britain is also captive to these trends. The MPs’ expenses scandal may not have exhibited hypocrisy and corruption on the Cahuzac or Italian scale, but it has similar roots. Lawyer Anthony Salz (a member of the Scott Trust that owns the Observer and Guardian), in his report into the culture at Barclays, inveighed against the ethical “vacuum” of the seriously overpaid 70 top bankers over the last decade. The promotion of their own interests trumped those of the bank or even basic ethics. Centrica, custodian of the near-monopoly British Gas, felt justified in creating a bonus pool of £15m for five executives running essentially a risk-free business. Senior police officers are jailed for accepting bribes from tabloid newspapers. Disproportionately of reward, preoccupation with one’s own interests and diminishing public virtue disfigure Britain, too, and into the trust gap marches populist Ukip.
We know the precepts of a fair society – a proportional relationship between reward and effort, helping each other when bad luck strikes and sharing the benefits of good luck. But this sort of society needs to be led by people who live by those virtues. Up until 50 years ago, belief in God underpinned our public morality: even if the elite behaved badly at least it knew it behaved badly. Today, we are living through the revolt of the elites as historian Christopher Lasch warned nearly 20 years ago. The moral code undergirded by Christianity and which supported fairness has been enfeebled by secularisation and the precepts of free market economics. Nor are there powerful labour movements, informed by a belief in the feasibility of socialism, to keep the elites honest.
Lasch’s view was that there was only one way forward – the reaffirmation of democracy. What we need is not the democracy of the one-off referendum. We need the deep democracy of transparency and accountability, along with constitutional mechanisms and processes that hold our private and public leaders to account day by day.
In this respect, Grillo in Italy may foretell a better future – the insistence that Italian politics is completely opened up has to be right. We are also learning more about who is doing what, thus Cahuzac’s fall. But this is only the first foundation of what is necessary to bridge the trust gap. We need even more openness, with the same principles extended to our businesses and banks. There needs to be a new understanding of the legitimacy of the public domain and public intervention. The time has come to hold our leaders – in the public and private sector alike – to account for their actions.