From The Daily Kos. Forget about Greece or Portugal or Ireland: It looks like Spain's gonna blow first.
You wouldn't know it from the sub-rosa treatment being given to it in America, but Spain is currently experiencing something like the Arab Spring. As one Spanish author put it:
Madrid isn't Tahrir, but the "virus" is the same: an abundance of youth without hope, doomed to a declining market modernized by cutting social rights and jobs, with the only prospect long-term trash contracts. There are thousands of stories of men and women who can't find a position, who suffer. No one speaks of them. The party line prevails, that of the others, of bureaucratese, of press conferences without questions, of the untouchables.
From the coverage that Spain does receive in American media, you would think that the government is one of the more deeply indebted in the EU. However, this is simply false. Eurostat data (see below) shows that Spain has a moderately high current government deficit, but has an actual sovereign debt substantially lower than France, Germany, or the UK.
Spain doesn't have a government debt problem. It does have an enormous private debt problem. Household debt is part of the problem, but is far overshadowed by business debt. The reason that the Spanish government faces such a premium when financing debt is that the banks doing the lending expect the government to be called upon to assume this private debt in the near future.
Now that we know the truth about where the debt lies, we need to ask who holds it. Yes, there is a great deal of domestic exposure here: Spanish banks holding Spanish debt. But, when you look about the Merkel-Sarkozy axis of austerity, the pattern of Spanish debt holdings becomes all the more suspect.
French and German banks are heavily exposed to Spanish private debt. The Spanish government is being called upon to assuming this debt, and implement austerity measures to pay the bill, as a means for Merkel and Sarkozy to protect their nation's haute finance. It's the banksters stupid!
But it's the Spanish public paying the bill.
..
Unemployment is a peculiar Spanish bane. The country regularly has a rate higher than the rest of the continent. The overall rate stands at more than 20%. The collapse of the real estate market and declines in tourism help explain this in part. More serious is the fact that much of the country has a business class intent on competing on low labor costs, even though this is out of step with the reality of modern Spain. As bad as this has been for country as a whole, the burden on young workers has been hardest. Youth unemployment in the country lies at nearly 50%
Angry, unemployed youth are the fuel that lit the Arab Spring. And, Spain has them in spades. That shit is going sideways now doesn't seem like it should be a surprise.
Spain's descent into chaos will be presented as astonishingly fast, but the contributing elements have been percolating for some time now. The first European domino is rocking..
You wouldn't know it from the sub-rosa treatment being given to it in America, but Spain is currently experiencing something like the Arab Spring. As one Spanish author put it:
Madrid isn't Tahrir, but the "virus" is the same: an abundance of youth without hope, doomed to a declining market modernized by cutting social rights and jobs, with the only prospect long-term trash contracts. There are thousands of stories of men and women who can't find a position, who suffer. No one speaks of them. The party line prevails, that of the others, of bureaucratese, of press conferences without questions, of the untouchables.
From the coverage that Spain does receive in American media, you would think that the government is one of the more deeply indebted in the EU. However, this is simply false. Eurostat data (see below) shows that Spain has a moderately high current government deficit, but has an actual sovereign debt substantially lower than France, Germany, or the UK.
Spain doesn't have a government debt problem. It does have an enormous private debt problem. Household debt is part of the problem, but is far overshadowed by business debt. The reason that the Spanish government faces such a premium when financing debt is that the banks doing the lending expect the government to be called upon to assume this private debt in the near future.
Now that we know the truth about where the debt lies, we need to ask who holds it. Yes, there is a great deal of domestic exposure here: Spanish banks holding Spanish debt. But, when you look about the Merkel-Sarkozy axis of austerity, the pattern of Spanish debt holdings becomes all the more suspect.
French and German banks are heavily exposed to Spanish private debt. The Spanish government is being called upon to assuming this debt, and implement austerity measures to pay the bill, as a means for Merkel and Sarkozy to protect their nation's haute finance. It's the banksters stupid!
But it's the Spanish public paying the bill.
..
Unemployment is a peculiar Spanish bane. The country regularly has a rate higher than the rest of the continent. The overall rate stands at more than 20%. The collapse of the real estate market and declines in tourism help explain this in part. More serious is the fact that much of the country has a business class intent on competing on low labor costs, even though this is out of step with the reality of modern Spain. As bad as this has been for country as a whole, the burden on young workers has been hardest. Youth unemployment in the country lies at nearly 50%
Angry, unemployed youth are the fuel that lit the Arab Spring. And, Spain has them in spades. That shit is going sideways now doesn't seem like it should be a surprise.
Spain's descent into chaos will be presented as astonishingly fast, but the contributing elements have been percolating for some time now. The first European domino is rocking..
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