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Dear Rajoy, you could have done better

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Nacho Cardero.- 07/14/2012

A banker, one among few who has survived the economic tsunami without harm, recently said: “Within three years, the average Spanish monthly net salary will have dropped to 600 euros.”

His statement could have been received as a boutade, a provocation that could have upset anyone, but, as a matter of fact, he is right, this is about to come true. The internal devaluation that Spain is going through is beginning to permeate all social strata.

If anyone would have said three years ago that the value-added taxes would reach 21 percent, and that the government would be forced to withdraw Christmas bonuses for public sector employees and cut unemployment benefits, we could have had that person stoned in public, accused of being apocalyptic and antipatriotic.

The reality we now face

This is July 2012, however, and only a few days ago Prime Minister Mariano Rajoy presented one of the harshest austerity measures in the country’s history to the parliament. The measures were confirmed in the press conference held by Deputy Prime Minister María Sáenz de Santamaría, Finance Minister Luis de Guindos and Budget Minister Cristóbal Montoro on Friday. This is now the reality we face.

After salaries have plunged in this bankrupt country, the rich are no longer rich, the middle-class is being sacked and the unemployed don’t even know what they are anymore.

Rajoy, in his serious and resigned manner, with a sort of halo of incomprehension, mounted the platform in the Congress of Deputies on Wednesday to announce measures that are as necessary as they are painful, and which, for certain, it will take much time to gauge.

The sacrifices of a head of state

If he would have presented these same measures seven months ago, when he came to power, it would have been seen as a sacrifice on behalf of a head of government prepared to face a storm of criticism and general strikes, sacrificing his very reelection in order to save the country.

Now, on the contrary, he did not even seem to be a leader of a government but an executive heading a company towards bankruptcy who has already given up and handed over the keys to its creditors.

Rajoy spoke in the words of the troika. There is no alternative. The Memorandum of "Intervention" (an euphemism of “Understanding”) – the agreement between Spain and the Eurogroup on the financial aid to banking sector – requires that it is done this way.

“I do the only thing that can be done to exit this depression,” Rajoy told the assembly.

Privileged autonomous regions

No, dear prime minister, you could have done much better. As Rosa Díez, the leader of the small party Unión Progreso y Democracia (UPyD) correctly recalled, you had the possibility of “choosing between the welfare state and the current state of autonomous regions.”

You opted for the second alternative: to maintain the privileges of the regions and abolish citizens’ rights.

Because, you tell me, prime minister, how it is possible to allow reductions in social spending, while the regional budgets continue draining public funds.

In the region of Valencia, governed by your party, the centre-right Popular party, maintains three local, costly public TV stations. In Madrid, a handful of executives at Telemadrid, the local public TV channel, gain more than the leader of the government. In Castilla-La Mancha, drivers take the TV show guests to the studios in a true Hollywood starlets fashion.

Draconian measures

How can you allow these Draconian measures, which are so damaging for the average citizen, while the Ministry for Public Works continue funding the construction of fast-track AVE railways to Galicia, in northern Spain, spending about €9bn? While there are regional airports, such as the one in the northern city of Huesca, that remains open despite the fact that it only receives about five passengers per month? While in 2012, about €700m more will be spent on renewable energy bonuses compared to the previous year? While the government will intervene to rescue a large number of unprofitable high-way projects, in the same way that it has done with the banking sector? Can anyone understand this?

The current income reduction for ordinary Spanish families is unprecedented and consumption may collapse. After the measures announced this week, some experts forecast that the recession will last at least until 2014 and a "long walk through the desert" can be expected at least for a decade.

Rajoy's allies

On this road, Rajoy has found a strange ally in Alfredo Pérez Rubalcaba, the leader of the Socialist opposition party, who wants to act as a statesman, saving the legacy of former PP and Socialist governments.

But he is not the only one, nor the first one. The Spanish society, aware of the fact that there is not much else to do than to continue forward and assume the sacrifices, is also willing to lend a hand.

That said, it is not a question of support that comes free of charge. As a compensation, they require a change in the foundations of the autonomous regions, a stop to overspending and the closure of a number of public TV stations.

This article is available in Spanish here.

Translated and edited by Stina Lunden.

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