Tens of thousands of Spanish youth have settled on the Puerta del Sol square in Madrid to protest against mass unemployment which is now at 21% [43% for youth], and against the dramatic budget cuts that Prime Minister José Luis Zapatero was obliged to put in place to prevent the collapse of the Spanish economy.
Contrary to Greece, Spain was relatively well-managed before the crisis, with a government budget surplus and a public debt below that of many countries, such as the United Kingdom. But the bank crisis and the bursting of the real estate bubble hit hard.
During last weekend’s local elections, Zapatero’s Socialist Party took a beating from the voters who, in a protest vote, turned towards the Conservatives [of the Popular Party]. Zapatero, whose standing in the polls is very low, has said that he will not run again [in the 2012 elections].
But the harsh truth is that in reality, Spanish politicians have little choice. They can neither devalue their currency because of the Euro nor can they inject fresh funds to kick start the economy for fear of upsetting financial markets.
Spanish youth have lost confidence in their political leaders
In fact the cure for this type of “Spanish Flu” isn’t found in Madrid but in Brussels and Berlin. That’s where European leaders prescribed the wrong treatment: rather than adopting budgetary policies aimed at growth but tied to structural reform of the labour force, [German Chancellor Angela] Merkel & Co decided to resolve the problems by betting on budget cuts and forcibly imposed horse remedies, which, when the crisis hit, only added to the damage.
Blinded by the need to keep inflation under control, a marginal concern at the moment compared to skyrocketing unemployment, the European Central Bank, has for its part, prepared the ground for a rise in interest rates – which will only make things worse for the Spaniards.
But the “Spanish Flu” also revealed that Europe’s centre-left is not capable of proposing a viable alternative to the current economic policy. The opportunity of doing away with an unregulated financial sector, which is at the root of the financial crisis, was wasted in the early stages. Now the centre-left must propose a clear response to the crisis.
Spanish youth, who are facing a number of years of mass unemployment, have understandably lost confidence in their political leaders. And the European Union cannot ethically, politically or economically allow itself to abandon millions of European youth.