Economic crisis drains Spain

Madrid high school graduate Laura would like a temporary job before beginning her university studies, but she does not even intend to look for one. "There are no jobs in Spain," the 19-year-old says with a sigh. "The only hope would be to have an influential relative, and I don't have any." Laura belongs to what is becoming known as a "lost generation" in the country with a 45 per cent unemployment rate among people under the age of 25.
The issue of the general unemployment rate in Spain - at 22 percent it is the highest in the eurozone - dominates the parliamentary elections, which will pit Conservative opposition leader Mariano Rajoy against Alfredo Perez Rubalcaba from the governing Socialist Party on Sunday.
Polls predict a landslide victory for Rajoy, 56, who would thus face the huge challenge of healing the ailing economy. "There is a growing, terrible sense that we cannot compete and are being left behind in Europe," a Madrid lawyer says. Spain's economy boomed for over a decade, but the apparent prosperity had feet of clay.
It was largely based on a speculative construction boom, which collapsed with the global crisis, exposing the weaknesses of an economy based excessively on labour-intensive low-tech sectors. The crisis has left Prime Minister Jose Luis Rodriguez Zapatero's government struggling frantically to cut the 9.2 per cent budget deficit and to avert a European Union-led bailout.
Austerity policies have undermined consumption and thus growth, with the economy about to slip back into the recession it left behind in early 2010. "This country is in a bloody mess," groans Guillermo, a 50-year-old teacher who is about to be thrown out of his flat for not paying the rent.
The professional formation centre where he works has not paid him for months, because the centre itself does not get paid by the debt-ridden municipalities which supply most of its students. The long-term cost of the crisis, however, could be the highest for young people. "With two university degrees, I never thought I could go on the dole," said Sergio, a young man attending a rally of the Indignant Ones.
The protest movement was called to life by young internet activists mid-May. It soon became a force to be reckoned with, erecting tented camps that occupied city squares for several weeks, and drawing tens of thousands of people to its rallies. One in five unemployed youths in Spain has university-level studies. But among the lucky ones who do find work, many end up as "mileuristas" - a new word designating people who earn 1,000 euros (1,400 dollars) a month.
Such low salaries leave young people unable to move out of their parents' homes, to start families and to have children. Spain's population of about 45 million will decline by up to half a million within a decade, the national statistics body INE predicts. The decline will not only be due to a falling birth rate, but also to emigration, with the crisis expected to push nearly 600,000 people to leave the country this year alone, according to the daily El Pais.
The vast majority of those moving abroad are immigrants returning to their home countries, but Spaniards are also emigrating, mainly to other European countries and Latin America. They include engineers, architects, financial experts, researchers and other professionals, creating a "brain drain" which could become permanent if the economy continues to stall, experts say.
"Our office is constantly receiving despairing business people who are forced to declare bankruptcy or to fire most of their staff," says Jose Luis, a financial advisor based in Madrid. The human dramas created by such situations are visible all over the country, where hundreds of thousands of people have lost or are in danger of losing their homes over unpaid mortgages. Queues are growing longer in front of the charity canteens of the Catholic organization Caritas, which received more than 6 million requests for different kinds of assistance in 2010.
With the central and regional governments slashing social spending, public hospitals are cutting down on emergency services and numbers of beds. Schools have less teachers, universities have less resources, and cultural activities wither away for lack of funds. The crisis has deepened the gulf between the rich and the poor, with Spain now having one of the highest levels of social inequality in the EU, according to the statistics body Eurostat.
The government has tried to tackle the domestic reasons for the crisis with liberal reforms, making the labour market more flexible, raising retirement age and restructuring the troubled savings banks. Yet Spain and all of Western world needs to look deeper into the causes behind the crisis, say the Indignant Ones, who want to cleanse politics of corruption, of career politicians and of the influence of financial markets. "The movement is right," Guillermo says. "But politicians will not accede to reforms that would erode their privileges."