Newspaper article International Herald Tribune

Spain's Yearnings Are Now Its Agony

Newspaper article International Herald Tribune

Spain's Yearnings Are Now Its Agony

Article excerpt

The salvation that Europe promised 26 years ago increasingly resembles a charade.

CORRECTION APPENDED

One Spaniard recently put it this way: "We are being told to tighten our belts and drop our drawers at the same time." Unemployment is higher in Spain than anywhere else in the euro zone, and the economy has been starved back into recession. Yet the very Spanish politicians who wax stern on the imperatives of austerity have virtually nothing to offer citizens to alleviate the pain. It is a script closer to Beckett than to Helmut Kohl.

Even as the euro zone lumbers away from the precipice of a Continent-wide recession, Spain is stuck in a fateful holding pattern. According to a European Commission forecast, Spain will be the only country among the currency union's cast of 17 to remain in recession in 2013. The government's plans to recapitalize Bankia, Spain's fourth-largest bank, have reinforced concerns about a generalized banking crisis and costly bailouts. Spaniards, meanwhile, will have to endure the effects of $34 billion worth of cuts slated for the rest of the year.

All of this adds up to the inevitability of future hurt, and it is embittering Spaniards' taste for the democracy they craved just a generation ago.

Spain's fall from heady promise to Celtic gloom tells a story of democratic expectation gone sour. This tale is a profound blow to the European Union itself -- a symbol of the Continent's shifting political prospects.

Spain was not only one of the chief protagonists of 20th-century Europe, it also tilled the bloody soil from which the union later sprang. The Spanish Civil War was the staging ground for the defining existential drama of the century: a gory crucible of democracy, fascism and communism in conflict. Its fate entwined with Germany's, Spain was at the center of Europe.

Spain sat out World War II, but afterward, its Axis-addled associations and blustering dictator sidelined it while Marshall Plan aid and democratic reconciliation transformed the Continent. Eventually it emerged into that new Europe -- only to find itself, at the cusp of a new century, again bound to Germany, now by bankers rather than bombers. And again, this seemed a boon at first.

When Spain joined the European Community in 1986, after nearly four decades of dictatorship, euphoria reigned. Finally, the country was gaining its rightful place intellectually, culturally and economically in the social democratic mainstream of Western Europe.

"For Spaniards, Europe was the solution," said Alvaro Soto Carmona, a history professor at Universidad Autonoma in Madrid. "We were no longer different," he said; membership "opened the door to hope."

Propping open that door was money: structural funds from the union to finance much-needed infrastructure projects. At the heart of the financial power was a rejuvenated and economically vibrant Germany. The future looked secure; as had been the case in Germany, Spain's renewed surety was wrapped up in its sense of belonging to a free and optimistic Europe.

Then came plans for the adoption of the euro in the late 1990s, and again the prospect of an ascendant Europe offered a gilded opportunity for Spain. Borders were disappearing. The euro helped inflate a booming real estate bubble, as capital migrated south from northern Europe. Banks lent liberally, and the construction industry surged. As private debt mounted, homeownership soared.

Unlike some of their European counterparts, Spanish banks were relatively well protected against the initial collapse of the American financial sector in 2008. But the global recession that followed, coupled with the bursting of the real estate bubble at home, soon devastated Spain's economy, which had longstanding vulnerabilities that were no secret but had been overlooked in the boom years. They included chronically high unemployment, for which economists blame unwieldy labor laws. …

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