The Socialist 27 June 2012
Hypocrites! Tories bash benefits, rich let off the hook
Spain: New epicentre of crisis in Europe
Danny Byrne, CWI
Spain is becoming the new epicentre of the capitalist crisis in the eurozone. The country's massive banking crisis, has led to the right-wing Rajoy government accepting a humiliating €100 billion European Union/International Monetary Fund (EU/IMF) bailout.
Added and connected to the banking disaster are a plethora of social, regional, national and political crises, each one threatening to explode at any moment. As a Wall Street Journal editorial widely quoted in the Spanish capitalist press put it, the problems of Spain's prime minister are "massive and simultaneous" (El Pais, 4 June 2012).
The government's brutal austerity measures have had the same effect in Spain as elsewhere - they have dragged the economy further towards a depressionary spiral. Mass unemployment is steadily worsening (over 50% of youth are unemployed) against a backdrop of grinding poverty. Those who only a few years ago enjoyed regular and seemingly stable work are now seen rummaging in dustbins for food.
This blatant contradiction - between Spanish capitalism which struggles to remain in the 'premier league' and its impoverished working class - is set to be the determining factor in shaping forthcoming events.
To get a glimpse of the intensity of the new class battles one need look no further than the militant struggle of the miners in the north of Spain where an indefinite strike is underway in Austurias and León. There the miners have erected flaming barricades on motorways and railway lines around the country and defended them with homemade rocket launchers, in some towns successfully driving out the police.
The last two months have ushered in the most intense period of working class struggle since the beginning of the economic crisis.
The massive general strike on 29 March and the numerous millions-strong mobilisations around it were followed by over one million people marching on May Day and then by another million marching in cities across the country on 12 May to celebrate the anniversary of the Indignados (social justice) movement. On 22 May, there was an 80% solid strike of the entire education sector.
These mobilisations, despite the limitations imposed from above by the movement's 'leaders', show it is impossible for capitalism to implement its plan of impoverishment without raising an outcry from the working class and youth.
The speed of the latest banking crisis, with the trigger of the collapse and nationalisation of Bankia (the fourth largest bank in Spain), has been breathtaking. Only a few days after Bankia's chairman vowed that the firm was capable of solving its own financing problems, it was already in need of an emergency nationalisation.
The public cost of this 'nationalisation' and recapitalisation then went in another few days from €4 billion to almost €25 billion. The pathetic unpreparedness of Spanish capitalism for the advent of this crisis is revealed by the fact that their Fund for Orderly Bank Re-structuring contained barely more than €5 billion at the time of the Bankia collapse.
The bailout of Bankia alone is set to send public debt up to 90% of GDP (total output), above previous estimates. The €100 billion in fresh debt now being borne by the public purse will send this figure shooting further upwards.
This is being billed as a 'soft' bailout, limited to the financial sector and without a Troika (EU/IMF and European Central Bank) austerity programme attached.
However, the conditions put forward by the European Commission for a mere one year delay of Spain's 3% deficit limit target, that include an acceleration of pension attacks, a hardening of the labour reform (making it easier to sack workers) and deteriorations to the unemployment pay system, give a small example of the "sacrifices" which will be demanded.
This bailout will be paid out in tranches (differentially structured instalments), with the threat of funds being withheld if the government "misbehaves".
A banks-only bailout does nothing to resolve the fundamental problems of Spain's economy - not least the looming economic disasters in autonomous regions, for example, which the Spanish state would be equally incapable of responding to.
Thus, while the initial bank rescue figure may seem "manageable" to European and Spanish capitalism, it could be a mere attempt at a 'quick fix' which touches only the tip of the iceberg that is the deep crisis of Europe's fourth largest economy.
The reality is that this bailout is motivated by capitalist governments needing to bend over backwards to the super-rich speculators, who through their idle savings and investments have the banks and economy by the throat.
Flight of capital
The 20 biggest Spanish companies have reserves of over €40 billion, which are not being invested due to the depth of the world crisis that the profit system is passing through. In order to put this money to work, a revolutionary restructuring of the economy where the main companies and industries are run under democratic public ownership would be necessary.
It would then be possible to halt the flight of capital and invest Spain's wealth in an emergency anti-crisis programme to create jobs and public works.
The €29 billion destined to be thrown into the black hole of Spanish debt payments this year alone - not to mention the billions paid to buy off property developers' bad debts in the banks - could instead be put to social use.
The condition of the Spanish economy screams the need for such policies, which could transform the situation in Spain and throughout Europe.
But only a working class government operating on the basis of socialist policies would be capable of carrying out this programme in a thorough and consistent way.
The adoption of such alternative policies in Spain or another European country would in today's globally integrated economy be only the first step, one crucial part of an international struggle for a working class alternative to the capitalist euro and EU.
The 'national question in Spain' and also 'the Left and workers' struggles' are issues addressed in the full version of this article, available on www.socialistworld.net
Miners evoke fighting traditions
As part of its savage austerity measures the right-wing Popular Party government of Mariano Rajoy has slashed subsidies to the coal industry leading to thousands of job losses. In response, 8,000 miners in the autonomous areas of Asturias, León and Aragon launched an indefinite strike.
Emy A Castelao writes about the miners' struggles.
The struggle to defend the coalmining industry is not only a fight for jobs, a living wage, pension, and decent working conditions - it is also a fight for survival.
The ultra-conservative government has sentenced to death a part of Spain. Many more indirect jobs will also be lost and the mining areas will become ghost towns.
Since 1990, millions of euros in assistance earmarked for Spain's mining areas (the number of miners has fallen from 45,000 workers to 8,000 today) have instead gone into the pockets of the mine owners or into the hands of mayors. The mining areas and their inhabitants have not seen a single euro in assistance.
In León, mining is in the hands of a single person - Victorino Alonso. He has used such aid to expand his empire, buying mines in Ukraine and Asturias.
The struggle for the defence of mining in Asturias and León has a long history.
In 1934 during the Bienio Negro (two black years) workers' organisations in Asturias and Catalunya rebelled against the reactionary government of the second republic. In Asturias it became an insurrectionary movement. Eventually the government sent in the army, led by Franco, to crush the uprising.
In 1962 the oppressed Asturian miners, faced with a wage freeze, went on strike for two months under the fascist regime of general Franco - where being a trade unionist was illegal and could mean 20 years in prison - and won wage increases.
Today, the people of the mining areas have no choice but to fight for their livelihoods, for their survival and, above all, for the future of their families.
In this issue
Socialist Party news and analysis
Socialist Party NHS campaign
Socialist Party workplace news
Trade Unionist and Socialist Coalition
International socialist news and analysis