Try Red Pepper in print with our pay-as-you-feel subscription. You decide the price, from as low as £2 a month.More info ×
Already shattered by the mishaps of Greece, Ireland and Portugal, the single currency could be in real danger of collapse if contagion extends to Spain. That is why the European Commission, the ECB, chancellor Merkel and president Sarkozy keep a keen eye on Spanish affairs, and keep pressing the recently elected government of Mariano Rajoy to pursue a very strict agenda of austerity and cuts. But recent developments in Spain could prove that’s it’s no easy undertaking.
It is Spain’s economic size that makes the possible effects of a Spanish default much more frightening than the above-mentioned cases. Spain is suffering the hangover of a real estate bubble triggered by deregulation and fuelled by cheap money, courtesy of the single currency. Now burst, it has left behind a mountain of private debt: businesses and households owe to Spanish banks and these in turn owe to their foreign (mostly French and German) colleagues, to the tune of well over 800 billion euros (£650 billion). Here lies the risk – a default could affect seriously these large lenders.
During 2009 there was a timid attempt to cope with the crisis by replacing dismal private investment with public expenditure. But as in many other countries – with the valiant exception of Iceland – the largest efforts were devoted to keeping the banks afloat, and there was not enough public money for both. By the end of the year the EU was back to stability as usual and austerity began.
In May 2009 came a 5 percent cut in public servants’ pay, the freezing of public pensions and reform of the labour laws. This triggered the first sign of resistance on September, a general strike called reluctantly by the large unions that was more a half-hearted blaze than a sustained fire, as their leadership feared an eventual Conservative takeover in the coming elections. In January 2011, these same leaders accepted a reform of the public pension system, selling it as the lesser evil. Consequently their credit sunk with Zapatero’s.
The radical left and the smaller more militant unions appeared too weak to pose any threat, and the Popular Party began to bank on victory in the general elections which were to take place by the end of 2011.
Previously, in May, local and regional elections had already resulted in a significant defeat of the Socialist Party as expected. But with this also came the unexpected: the eruption of the ‘indignados’, who stepped onto the stage during the electoral campaign.
Hundreds of thousands marched in the streets all over Spain and occupied public spaces, from tiny villages and working class neighbourhoods to the most centric squares in large cities. They aimed their criticism towards the banks, the markets and the EU, but also towards the political and electoral system, including the unions and the traditional left.
The movement itself was very pluralistic and undefined at the beginning. General criticism of the malfunction of formal democracy and rejection of neoliberal policies blended with naive apoliticism and the desire to behave ‘nicely’. The movement was radical enough to openly defy the electoral courts when they banned the demonstrations the day before the elections, but some controversial questions were left off the agenda, such as the war on Libya.
The movement had very little electoral impact in May – only an increase in blank and null votes and a proliferation of tiny groups which ran in the elections but got no significant results. But there was a sensible political effect: in August, after being summoned by Sarkozy, Merkel and the ECB, president Zapatero set out to amend the constitution to enshrine the absolute priority of debt repayments over any other commitment.
Socialist and Conservative leaderships supported the amendment and agreed to carry it out through an urgent procedure. They did not want to risk opening a public debate on the constitution two months after thousands of people had marched in the streets crying ‘there is no democracy when markets rule!’ The radical left and the unions strongly opposed the change. So did speakers from the ‘indignados’, and the topic started trending on the social networks.
In November, the Popular Party gained an absolute majority in the general elections. This was the result of a mass defection of Socialist voters – the Socialists’ vote fell by 4.3 million compared to 2008, while the Conservatives only grew by 600,000.
The United Left (a broad-based left coalition including, but not limited to, Communists) almost doubled its share and jumped from 2 to 11 seats, which could be read partly as fall-out from the ‘indignados’ movement.
The new government immediately launched a reinforced agenda of austerity and deregulation, which was warmly welcome by the powers-that-be in Europe: the ECB, Merkel and Sarkozy, and David Cameron by the way. Out of the need to comply with the deficit target came a new cut in public expenditure of 1.5 percent of GNP. Education, healthcare and social services run by conservative regional governments were also downsized, and some services which used to be free began to be charged for. Along with this came another reform of labour law which set out to destroy all the major achievements in labour relations, including collective bargaining and protection against arbitrary layoffs.
This was the last straw for the large unions, which until now had preferred bargaining over confrontation. A general strike was called for March 30, demanding the withdrawal of the labour reforms. It became a challenge to all the Popular Party’s policies, supported by all parties to the left of the Socialist Party, trade unions and all kinds of social movements including those connected to the ‘indignados’. The Socialist Party was caught in the middle, as it had been responsible for similar measures and also feared the strike would not succeed.
Meanwhile, regional elections were to take place five days before in Andalusia and Asturias, both of them traditional strongholds of the Socialists. Extrapolating from the results of the last elections the most probable outcome was another absolute majority for the Conservatives. President Rajoy strategically delayed the presentation of the national budget for 2012, which was expected to enclose harder cuts, to protect his party’s electoral prospects. He even engaged in a fake row with the European Commission over the deficit target for 2012, pleading for 5.8 per cent GNP against 4.4 per cent as initially planned. It was finally settled at 5.3 per cent.
The regional elections in Andalusia and Asturias were very disappointing for the Popular Party. Both ended in hung parliaments. In the case of Andalusia, which amounts to almost a fifth of Spain’s total population, the United Left and the Socialist Party won the majority of the seats, so a left-biased regional government is expected in this significant region. It will be added to Catalonia and the Basque Country, neither of which have got Popular Party government. It appears that the Rajoy’s hard measures have began to take their toll less than three months since he gained office.
Five days later, the general strike turned out to be very successful, especially among industrial, transportation, construction and, in general, blue collar workers who massively followed the call, not withstanding the years of passivity. The same cannot be said of public servants, where the number of strikers was less significant. Nevertheless the country was almost paralysed.
As is usual in Spain the strike ended in marches, attended this time by hundreds of thousands all over the country. Rank-and-file trade unionists marched alongside thousands of young people who had taken part in the ‘indignados’ movement, in a spirit of unity. Activists who had been trying to bridge the movements, with little success until then, were delighted. In some senses the elections had proved that the Popular Party is not invincible, and the resistance had taken confidence from this.
The unions have committed to further mobilisations if the government doesn’t move. The government has answered by drafting a extremely restrictive budget and announcing further cuts in health and education, plus new laws restricting civil rights. Mainstream economists admit that, with this budget, recession is almost unavoidable and unemployment will continue escalating.
The risk premium placed on Spanish sovereign debt is at it maximum, the financial system is in high distress and rumours of intervention by the EU are spreading. Recent developments have raised the stakes.
Will the resistance movement change the course of events? It is an open question now, but at least there is hope that we are not doomed. Some external developments could help too – for example, the results of the French presidential election and the coming Greek elections could open a new gap in the EU’s walls. But much will depend on the ability to strengthen the new unity that can be built in Spain. This is up to the unions, to the ‘indignados’ movement, and to the political left.
Hsiao-Hung Pai meets people affected by the fire, and finds sadness and suffering mixed with a continuing wariness of the official investigations
Chris Williamson MP, winner of the election's tightest marginal, Derby North, and recently reappointed shadow minister for fire services, talks to Ashish Ghadiali about Jeremy Corbyn, the housing crisis and winning from the left
The Corbyn-supporting group is preparing for another election at any moment, writes Adam Peggs – and now has the potential to create powerful training initiatives, union links and party reform efforts
’We believe in you. We are with you. We will never forget.’ Grenfell solidarity sweeps East London in mass banner drops from housing estates
Michael Calderbank profiles Jeremy Corbyn's new supporters in parliament
The Democratic Republic of Congo (DRC) continues to witness devastating political violence, but the world refuses to act. Ishiaba Kasonga and Serge Egola Angbakodolo ask why?
When fire safety has become a privilege for the rich, it’s time to stop austerity and fund emergency mass works to raise standards immediately, writes Jane Shallice
The election result has irreversibly changed political discourse in the UK, writes James Fox
In commemoration of the 30th anniversary of Bernie Grant's election to parliament, Ayo Wallace explores the life and legacy of his radical representation of Tottenham's black communities.
Across Britain, hundreds of thousands of people have now taken part in mass rallies for Corbyn's Labour. Eli Regan soaks up the atmosphere in Warrington
Contribute to Conter – the new cross-party platform linking Scottish socialists
Jonathan Rimmer, editor of Conter, says it’s time for a new non-sectarian space for Scottish anti-capitalists and invites you to take part
Editorial: Empire will eat itself
Ashish Ghadiali introduces the June/July issue of Red Pepper
Eddie Chambers: Black artists and the DIY aesthetic
Eddie Chambers, artist and art historian, speaks to Ashish Ghadiali about the cultural strategies that he, as founder of the Black Art Group, helped to define in the 1980s
Despite Erdogan, Turkey is still alive
With this year's referendum consolidating President Erdogan’s autocracy in Turkey, Nazim A argues that the way forward for democrats lies in a more radical approach
Red Pepper Race Section: open editorial meeting – 11 August in Leeds
The next open editorial meeting of the Red Pepper Race Section will take place between 3.30-5.30pm, Friday 11th August in Leeds.
Mogg-mentum? Thatcherite die-hard Jacob Rees-Mogg is no man of the people
Adam Peggs says Rees-Mogg is no joke – he is a living embodiment of Britain's repulsive ruling elite
Power to the renters: Turning the tide on our broken housing system
Heather Kennedy, from the Renters Power Project, argues it’s time to reject Thatcher’s dream of a 'property-owning democracy' and build renters' power instead
Your vote can help Corbyn supporters win these vital Labour Party positions
Left candidate Seema Chandwani speaks to Red Pepper ahead of ballot papers going out to all members for a crucial Labour committee
Join the Rolling Resistance to the frackers
Al Wilson invites you to take part in a month of anti-fracking action in Lancashire with Reclaim the Power
The Grenfell public inquiry must listen to the residents who have been ignored for so long
Councils handed housing over to obscure, unaccountable organisations, writes Anna Minton – now we must hear the voices they silenced
India: Modi’s ‘development model’ is built on violence and theft from the poorest
Development in India is at the expense of minorities and the poor, writes Gargi Battacharya
North Korea is just the start of potentially deadly tensions between the US and China
US-China relations have taken on a disturbing new dimension under Donald Trump, writes Dorothy Guerrero
The feminist army leading the fight against ISIS
Dilar Dirik salutes militant women-organised democracy in action in Rojava
France: The colonial republic
The roots of France’s ascendant racism lie as deep as the origins of the French republic itself, argues Yasser Louati
This is why it’s an important time to support Caroline Lucas
A vital voice of dissent in Parliament: Caroline Lucas explains why she is asking for your help
PLP committee elections: it seems like most Labour backbenchers still haven’t learned their lesson
Corbyn is riding high in the polls - so he can face down the secret malcontents among Labour MPs, writes Michael Calderbank
Going from a top BBC job to Tory spin chief should be banned – it’s that simple
This revolving door between the 'impartial' broadcaster and the Conservatives stinks, writes Louis Mendee – we need a different media
I read Gavin Barwell’s ‘marginal seat’ book and it was incredibly awkward
Gavin Barwell was mocked for writing a book called How to Win a Marginal Seat, then losing his. But what does the book itself reveal about Theresa May’s new top adviser? Matt Thompson reads it so you don’t have to
We can defeat this weak Tory government on the pay cap
With the government in chaos, this is our chance to lift the pay cap for everyone, writes Mark Serwotka, general secretary of public service workers’ union PCS
Corbyn supporters surge in Labour’s internal elections
A big rise in left nominations from constituency Labour parties suggests Corbynites are getting better organised, reports Michael Calderbank
Undercover policing – the need for a public inquiry for Scotland
Tilly Gifford, who exposed police efforts to recruit her as a paid informer, calls for the inquiry into undercover policing to extend to Scotland
Becoming a better ally: how to understand intersectionality
Intersectionality can provide the basis of our solidarity in this new age of empire, writes Peninah Wangari-Jones
The myth of the ‘white working class’ stops us seeing the working class as it really is
The right imagines a socially conservative working class while the left pines for the days of mass workplaces. Neither represent today's reality, argues Gargi Bhattacharyya
The government played the public for fools, and lost
The High Court has ruled that the government cannot veto local council investment decisions. This is a victory for local democracy and the BDS movement, and shows what can happen when we stand together, writes War on Want’s Ross Hemingway.
An ‘obscure’ party? I’m amazed at how little people in Britain know about the DUP
After the Tories' deal with the Democratic Unionists, Denis Burke asks why people in Britain weren't a bit more curious about Northern Ireland before now
The Tories’ deal with the DUP is outright bribery – but this government won’t last
Theresa May’s £1.5 billion bung to the DUP is the last nail in the coffin of the austerity myth, writes Louis Mendee
Brexit, Corbyn and beyond
Clarity of analysis can help the left avoid practical traps, argues Paul O'Connell
Paul Mason vs Progress: ‘Decide whether you want to be part of this party’ – full report
Broadcaster and Corbyn supporter Paul Mason tells the Blairites' annual conference some home truths
Contagion: how the crisis spread
Following on from his essay, How Empire Struck Back, Walden Bello speaks to TNI's Nick Buxton about how the financial crisis spread from the USA to Europe
How empire struck back
Walden Bello dissects the failure of Barack Obama's 'technocratic Keynesianism' and explains why this led to Donald Trump winning the US presidency