In Segovia, a one hour train ride northwest of Madrid, stands a magnificent work of ancient Roman engineering: the Segovia Aqueduct. Built nearly 2000 years ago, it remained in use until the mid-nineteenth century and continues to tower above the bustling streets. Legend has it that the devil himself, aspiring to secure a young woman’s soul, constructed the 166 stone arches in one single night. Accordingly, it is known as the “Puente de Diablo” or the Devil’s Bridge. A few weeks ago, I had lunch beside this very bridge. Sitting at a wobbly table on a steep cobblestone pathway and waiting for our meal, a fire broke out in the kitchen. We heard the swoosh of a fire extinguisher peppered with some Spanish curse words. A few minutes later the chef ran by, coughing and swearing, aiming for the bar next door. Shortly thereafter, he approached our table and asked if we’d do with a salad. We did, and as all Spanish food in general, it was plentiful and delicious.
There is something inexplicable about people in crisis. Some seem confused and foggy, some hopeless, some angry. Others just crack on. And there is something daunting about legends; those traditional stories often regarded as historical but never entirely rooted in fact. That is not to say they are always false. Indeed, many are based in true events to which some extra spice has been added over time. The Segovia Aqueduct exists, yet we also know that it wasn’t built by Lucifer but rather by the bare hands of people. Some legends, however, stick like magnets to our minds and blur the lines between what is, and is not. When in crisis, this can have detrimental effects.
For the past six years, Spain has been severely struck by the economic crisis, which forced the government to take drastic austerity measures. These included a €8.9bn cut in public spending in 2012, a labour market reform that loosened the regulations for collective dismissals, and a new employment agreement with a trial period of one year, during the duration of which employers can terminate the contracts without any kind of compensation. The word crisis has since found its way into the popular street-lexicon and public consciousness, like a tapeworm that constantly feeds on the latest events. When talking to Spaniards, everyone seems to be wearing crisis-tinted spectacles and everything seems to be linked to the crisis in one way or another. It’s a bit like talking about the weather in a valley where it hasn’t stopped raining for years. Raining again? Still crisis?
As it turns out, politicians and contractors also had been feeding off each other while the housing bubble grew larger, with the former treasurer of the ruling People’s Party admitting to having forwarded cash gifts from construction magnates to top politicians. Later last year, the Spanish king’s son-in-law was indicted of misappropriating six million euros of public money.
Luckily, the economy is showing tentative signs of recovery, with hedge funds and common-or-garden investors once again putting out their feelers across the seemingly recuperating peninsula. But like the first sun-beam piercing through a rainy day, the clouds still seem very real. It appears as though capital is faster than the EU-funded high-speed rail projects and labour recovery. As it stands, youth unemployment remains staggering, leaving a generation of young people not only facing a bleak future but leading them to believe that they have nothing meaningful to contribute. The crisis has left deep scars and it mostly affected the lower strata of the wage-labour population. In particular, it shook immigrants, who were attracted to Spain by the growth of the past fifteen years. Within a few years Spain has moved from being the poster child of European engagement and inclusiveness to a leaflet showing its adverse effects. The crisis fuelled the retelling of legends across Europe, serving as cautionary tales for the people afraid of suffering the same fate. “Be careful”, seems to be the message, “if we don’t cut public spending, the same might happen to you”. But all is not nearly as clear-cut as headline figures suggest.
While Spain’s condition has various roots, none of them grew from overblown public expenditures or labour protection. One widespread narrative in the Spanish saga is that the country’s unyielding labour market rigidities was causing Spain’s high unemployment, which pressured the government to abolish job protection and permanent fixed contracts. This has led to almost four million employees being laid off. Yet, if getting rid of these rigidities were the cause of unemployment, other European countries with more unbending job protections would show even higher unemployment rates.
Is it public expenditure then? Has the Spanish state spent above its means for too long? Against common belief, Spain boasts one of the lower public expenditures per capita within the EU 15, which was also the case when the crisis began in 2007. Indeed, unemployment can be linked to sluggish job creation. While a functioning physical infrastructure was being developed and public healthcare had been put in place, it remained a bloodless system, understaffed, and thus unable to pump jobs and life into society. Among its Eurozone peers, Spain claims one of the lowest rates of state revenues, public employment, and comparatively undersized public services. As a relic of Franco’s dictatorship, the country boasts the highest number of police force per inhabitant but likewise the lowest figure of adults employed by the welfare state. In 2012, merely one in ten adults worked “in the public services of the welfare (such as medical care, education, and social services) compared with one out of every six on average in the EU-15 and one out of every four in Sweden”. What ought to be a neoliberal dream come true has not materialised in economic benefits for the many.
Surely, it must be laziness, apparently a prevalent vice among the capricious, lethargic, and squandering southerners. There is scant evidence that this is the case. On the contrary, Spaniards work long, unsociable hours and their workplaces are too far away from home in order to have the legendary fiesta. According to a report issued by the UK Office for National Statistics, Spaniards and Germans spend nearly the same amount of time on the job. Incidentally, the low unemployment in Germany is rather a sign of the common “work sharing” practice than a free labour market, which is a result of the powerful German trade unions, the very unions the European Commission of Economic and Monetary Affairs is suggesting to weaken in Spain. While harsh reforms have been put in place in the South, Germany has been serenely peddling a softer line.
Rather, the reasons for Spain’s continuing economic struggle are to be found in the European Central Bank’s disproportionate emphasis on maintaining the inflation rate low and preserving price stability at the expense of labour protection, the country’s growing corruption, and an incomplete and unstable process of decentralisation. As anywhere, but particularly in Spain, the financial industry seemed to have an unwarranted influence over politics. Before joining the Eurozone, Spain reduced its public deficit not by increasing taxes but by reducing public expenditure. Even during the boom years before the crisis, when Spain experienced exponential economic growth, rather than raising corporate tariffs or retaining property taxes, the former were slashed and the latter abolished.
What seems particularly damaging is not only that the Europe-wide focus (i.e. the fiscal compact) keeps emphasising public expenditure cuts, but also that it has led to a deviation from the path that Spain was following towards a socially responsible and environmentally sustainable welfare state. Meanwhile, many of the extraordinary accomplishments of the young democracy have faded from the spotlight. As a case in point, Spain claims one of the largest solar industries in the world. And as of last year, it produced over twenty percent of its electricity with wind turbines making it one of Europe’s major windmill. Over the last 20 years and with the help of EU regional aid funds, Spain has constructed what could be seen as Europe’s most outstanding high-speed rail network. And though by some deemed overly bold urban schemes and some lavish theme parks, museums, and art galleries too many, the cities’ infrastructure is well-equipped to handle many future demands. Most remarkably, Spain has undergone some of the most dramatic social changes in recent times. While General Franco, a firm supporter of the Catholic Church, outlawed contraception, abortion, and divorce (adultery was only punishable for women, not for men), Spain until recently provided some of the world’s highest degrees of equality and personal liberty. Yet, the enactment of a worrying abortion bill this year shows how quickly such liberties can erode. As the fog of the crisis descended and stuck, international reports are filled with stories about failed economic schemes and massive blunders and thus ignore the complexities to the country’s detriment.
“It’s like the black legend all over again”, a Spanish social worker told me, referring to the term “Leyenda Negra” coined by the Spanish historian and sociologist Julián Juderías in 1913. The phrase refers to the anti-Spanish popular stories which circulated in Protestant Europe since the late sixteenth century. Their aim was to cast all Spanish history in a negative light so as to undermine Catholic Spain’s war effort during the Dutch Revolt (1581-1648). In England, such accounts served to warrant the country’s piracy against foreign trade and the Spanish crown. One prominent example of ignoring Spain’s positive achievements would be the country’s efforts to pass protective laws for native Americans, which made it the sole colonial power to legally ban the mistreatment of indigenous people and curbing the authority of European landowners. While later historians mitigated this bleak depiction of Western Spanish history, with some calling Juderías’ accounts “white legends” that idealised Spain’s past, there are indeed some instances of ill-reported historical facts. One concerns the often narrated phenomenon of the infamous “Spanish Inquisition”. Only recently, by gaining access to new archival records, have scholars discovered that the brutality and massacres associated with the tribunals were quite moderate when compared to the witchhunts and incarceration in other European countries. The number of victims has also been highly exaggerated. In an attempt to historicise the Inquisition, veteran British historian Henry Kamen notes that in the mid-16th century for instance, the Netherlands already possessed an Inquisition of its own” and that between 1557 and 1562 the courts of Antwerp “executed 103 heretics, more than died in the whole of Spain in that period”. The Inquisition’s trials were certainly far from justifiable, but in light of other atrocities at the time, they have been disproportionately represented in our historical consciousness.
How will we perceive Spain’s economic crisis in the future? Will we see Spain as an overblown and excessive public spender that had to be put in its place? Looking at Spain today, it is hard to be optimistic, though strangely enough, quite a few Spaniards I encountered are. And like the chef that had just put out a fire in his kitchen, most of them seem to crack on. While the Spanish state is employing too few of its citizens, it can rely on the strong role of family networks in Spanish society, which for now still offer financial and emotional relief for many. And while many of the young don’t work officially, the ‘black’ economy is booming, with the Spanish Finance Ministry estimating the under-the-table business in 2012 at 24.6 percent of GDP. Yes, in Spain a real estate bubble burst, as did in other countries. But when the fire broke out, instead of using the fire extinguisher in the kitchen where banks brewed up speculative crashes, the welfare state and job protection became the target. It might be time for the Spanish government to rethink its policies, use its infrastructure, and pump blood into a system that has been created in an astoundingly brief time. As for its European counterparts, we should leave the legends to the tourist guides and take a closer look.