Austerity medication – does it cure or kill the patient?
When I got to Madrid I turned on the TV and found a comedy programme. Angela Merkel – a man in drag, inevitably – was on the phone to a bearded chap who was doing everything he could to curry favour. That was Mariano Rajoy, the Spanish Prime Minister. The papers were full of how the two had gone on a boat trip together at the G8 meeting in Chicago – cue: endless jokes about loveboats.
Most Spaniards seem less enamoured of their German counterparts. A column in the centre-right newspaper El Mundo was all about the war. “Seventy years on, the nation of Beethoven and Goethe gets its pride from victory in the third world war, the war of economics and markets,” wrote Luis Maria Anson, a member of the Royal Spanish Academy. “Angela Merkel has more real power over Europe than Hitler.”
That made me jump. Invoking Hitler isn’t done lightly in Europe – at least it shouldn’t be. Yet even the economist at a Madrid brokerage whom I met was clear that when the austerity medicine the Spanish government is administering – partly at the behest of the Germans – has cured the disease, we may find that the patient is dead. Spaniards are suffering so acutely from unemployment and the cutbacks in social provision, it’s hard to see how they can get the economy moving again. The debt is being reduced, but the economy is frozen, and middle class Spaniards are falling into poverty.
That’s made clear by a coalition of Spanish non-governmental organisations who submitted a report to the UN this week. They’ve pulled together statistics which show the social and human cost of austerity – families who can’t pay the mortgage and are not only thrown out on the street but remain in debt indefinitely, a growing gap between rich and poor and massive cuts in health and education.
The Committee calls on Spain to:
• review austerity measures to ensure protection of economic and social rights, particularly for the poor, children, women, the disabled and unemployed adults;
• adopt and implement a national strategy against poverty, including measures to mitigate the effects of the crisis;
• legislate to allow ¨dacion en pago¨ whereby mortgage defaulters satisfy outstanding debt by giving up their home, currently left to the discretion of the banks;
• express concern at reforms that deny access to public health services to irregular migrants and calls for budget cuts;
• ensure sustained and adequate investment in education and combat high school drop out rates which are more than twice the EU average; and
• urge the government to avoid any further backsliding in labour rights protection and strengthen efforts to reduce unemployment.
Students see bleak future
Last night I interviewed students demonstrating against education cuts. All said they would be looking for opportunities overseas – they saw no future in Spain. Some talked of going to Germany, others to Latin America or the UK. Spain is not Greece. There’s no talk of default or falling out of the euro, but the students and their teachers question why the government is spending money on bailing out the banks at the same time as implementing a 20 per cent cut in the education budget.
They also question whether these harsh austerity measures will benefit Germany in the long run. Of course, Spain and other countries that got deep into debt need to rebalance their economies, but if they don’t grow they will drag down the whole euro zone. “Maybe we’re going to hell,” said Irene Lozano, an independent Deputy in the Spanish Assembly. “But if we do, we’ll take Germany with us.”
Follow Lindsey Hilsum on Twitter: @lindseyhilsum