by Nick Jiles
The neo-liberalization of global markets that succeeded in codifying Western financial institutions as the guardians of Westphalian global hegemony in the 20th century has set its sights on a new target. Unlike previous victims rich in natural resources and wanton of development, its current target is a member country of the aforementioned Western fraternity, Spain. Spain, which boasts one of the largest economies in the EU, has garnered increased international attention since the housing bubble burst and its economy began spiraling downward as unemployment climbed and deficit spending increased. Not surprisingly, the loudest clamor for solutions to the crisis is the Western media’s proposal, which calls for the destruction of the socialist measures currently allotted the Spanish workforce and reforms that empower Spanish companies and undermine the stability of the working class.
Spain’s economic disaster was the progeny of a number of factors, none of which have been granted sufficient attention in the Western media. A housing bubble spurred by the same type of speculative financial practices that eventually led to the collapse of the US economy, married with low domestic productivity growth (an increasingly shared characteristic by Western countries that export manufacturing/industrial jobs to the developing world) has resulted in the present melancholy state of Spanish finances. Also of note are a number of socio-economic factors unique to Spain, such as the amount of education required to obtain stable employment and the “garbage contracts” or black-market activities/employment that result from employers unwilling to abide by the country’s strict labor laws. Western media focus has instead been on a “government unwilling to apply radical surgery,” as stated in a May article of The Economist and a solution that would directly attack the socialist safeguards that grant Spanish workers arguably the most favorable working conditions in the world.
In coalition with the financial sector and Western economists are IMF predictions on future Spanish economic growth and the riotous reaction to recent austerity measures imposed upon fellow EU member Greece. Spain’s financial sector, namely its cajas (saving banks), are salivating at the thought of financial reforms that would help alleviate their unfortunate “exposure” to housing and construction loans. In addition, Western proposals have almost solely focused on public pension and labor reforms, even having the audacity to convey sympathy for Spanish banks, the benefactors of a recent $132 billion rescue fund from the public. More rational approaches to the country’s economic troubles should include an adjustment of the country’s employment tax, a factor that does represent a considerable hurdle in a limited job market, an examination of the manner in which Spanish banks concentrated such an extensive amount of capital in a single industry and a more thorough monitoring of employers which break the country’s labor laws.
The restructuring of the Spanish economy, drawn in accordance with an agenda that slashes social benefits, eviscerates trade unions and engenders corporation looms on the horizon. A recent article in the Spanish newspaper El Mundo outlined the government’s freshly drafted legislation for labor reform which states that “independent government commissions would be created in order to negotiate salary cuts between workers and employers” in instances in which companies can prove that they are experiencing “financial difficulties.” Historically, we need look no further than 20th century Latin America and Eastern Europe to revisit the devastating effects that neo-liberal economic reforms had on the working class in every country on which they were imposed.
The most recent developments in Spain are indicative of the neo-liberal doom that is destined any country with any semblance of a social agenda that falls upon unfortunate economic circumstances. Serious and prolonged civil resistance, on a much grander scale than that which was recently displayed in Greece, is necessary should the Spanish working class seek to save itself from the dark future of neo-liberal economic reform. As pressure from Western financial institutions mounts and the neo-liberal offensive emerges Zapatero and the Spanish government will be faced with the decision of abandoning its working class and submitting to the economic reforms which have proved to benefit only the privileged fraternity of the countries in which they have been implemented or to resist, stand behind its working class and address the financial practices that lead them to this crucial point in history.
–Nick Jiles is an organizer with CUHW (California United Home Care Workers) and can be reached at: email@example.com