In June of 2000 we wandered around the beautiful land of Spain in a car and a tent. In every settlement or town the cement mixers were rumbling round the clock. Many of the campsites were clearly newly established, with trees still small and cement still fresh.
Building work was everywhere, everything was being done up, and roads were being laid and surfaced. In the supermarkets of the smallest villages everything and anything could be bought. The farmland was well-maintained and prosperous. In the towns public transport was excellent, with brand new buses and trains. Things were going well in Spain. The times when the Spanish were forced by necessity to leave to go elsewhere as migrant workers seemed gone for good. Children went in nice uniforms to new schools. Project ‘Europe’ appeared to be bearing fruit. Foreign investors put their money en masse into the Spanish stock market and Spanish bonds.
Twelve years on and the Spanish are waking up, after years of dictatorship and poverty, from the dream of a newly healthy and prosperous land. The money put in by foreign investors, including the financial injections from the European Central Bank, is fleeing the country. The financial markets have evidently lost all faith in prosperous, healthy Spain. Or is it perhaps, that these ‘financial markets’ no longer see a flourishing Spanish economy with a guarantee of adequate returns?
The Spanish and foreign banks eagerly participated in pumping up this new prosperity by extending unprecedented levels of credit, hugely overstepping the mark and producing an economy which resembled an over-inflated balloon. This sort of thing began in America and has now reached Europe, causing - in Spain, Italy, Greece and Ireland – the noise and hiss of whirring and deflating balloons. Of course, those governing these countries also made a mess of things. But one thing is clear: these ‘financial markets’ are more a curse than a blessing. The fact that the ‘financial markets’ - or, you might say, Wild West Capitalism – are now demanding that billions be pumped into countries such as Spain and Greece in order to win back the markets’ confidence and ‘save’ these countries from bankruptcy, is pure chutzpah. All they really want saving is their own cash.
In order to fulfill the demands of European aid Spain, Greece, Italy and Ireland must demolish everything they have built up, with austerity for all. The curse of the ‘market’ is hard to bear and will last rather longer than its blessings. The people must return completely to a renewed poverty which they had only just risen above. Half of Spanish young people are unemployed and 22% if families live far below the poverty line. The Spanish Red Cross is asking for help for the people, for food, clothing and housing, because many can no longer pay their mortgages.
This is a tragedy for the people of Spain, as well as those of Greece, Italy and Ireland, indeed for the people of Europe. Because even here in the Netherlands the cement mixers now stand idle, and houses empty or for sale, and unemployment is increasing. Time therefore to rein in the complacent free market power of the ‘financial markets’ and strive for a balanced, humane economy.
Remi Poppe is a former Member of Parliament for the SP.