Spain’s Giant Post Debt Hangover
Recently by Eric Margolis: Let's Bury These Phony Myths About WorldWarII
BARCELONA – Viva la revolution! Spain's youth are staging boisterous but peaceful protests across the country that many call the Iberian version of the popular revolutions sweeping the Arab world.
Plaza Catalunya, the center of this marvelous city that pulses with life and fun, is packed with young demonstrators waving placards calling for revolution and end to capitalism and globalism, and blaring American 70's rock songs.
"The banks grow rich while the rest of the world lives on the edge" reads one poster. The Wall Street crash of 2008 caused by reckless American bankers has hit Europe full force.
Who can blame these kids for being angry? Spain's unemployment rate is 20% – 4.9 million. For those under 25, it's 44.3% – mirroring parts of the restive Arab world.
But so far, youth protests in Spain, as well as Britain, Italy, France have been tame. Greece is a different story. As it stumbles towards default on its unsustainable debt, the nation is racked by protests and strikes.
Italy and Spain, who may also face bond crises, have joined the scolding Germans in condemning Greece for profligacy and spreading financial contagion.
Spain just held municipal and regional elections. Prime Minister Jose Zapatero's Socialist party, having had the ill luck of being in power when the financial tsunami hit, just got washed away.
Incredibly, Barcelona, the cradle of Spanish Socialism, Communism, and anarchism, overwhelmingly voted in the right-wing People's Party which has links to the Franco-era fascists. The ghost of George Orwell and the famed POUM 1930's anarchist movement are turning in their graves.
The rout of Spain's left marks another step in Europe's strong move to the right. In Italy, Prime Minister Silvio Berlusconi, he of the "bunga-bunga" room, just vowed to never allow Milan to become "an Islamic city" or a "gypsyville." Most Italians agree with him.
Italy is being flooded by African boat people from Libya's long coasts. Col. Gadaffi had previously kept black African economic migrants away from Europe. But now that the EU and NATO are trying to kill him, the colonel has ceased policing his coasts.
As the emigrant tide swelled, Italy got fed up housing tens of thousands of nomads, and gave them travel papers to go to France. This hugely outraged the French, who called Italians all sorts of nasty, un-neighborly names. France shut its border with Italy, a violation of the Schengen agreement for free movement.
French Socialist presidential front-runner Dominique Strauss-Kahn looked almost certain to win next year's presidential elections. Now, his inability to control his lusts for a New York City hotel maid have upended French politics.
The front-runners are for now Marine LePen, head of the hard right National Front, and conservative President Nicholas Sarkozy. They are vying for the right wing vote by attacking immigrants, Islam, Arabs, and crime.
Amusingly, France's left-wing intellectuals rushed to defend Strauss-Kahn as a victim of brutal American wild west injustice or a plot. Now, in a war of the sexes, France's massed feminists are blasting them as woman-haters, pigs, and sexists.
Denmark, enraged by Muslim immigrants, has moved further right than George W. Bush. So have Norway and Holland. Even the usually quiescent Finns just voted a rightwing anti-immigrant party into parliament. Germany and Britain remain firmly in conservative hands.
Add to all of this the raging bond crisis that threatens Europe's overleveraged banking system. So far, this multi-layered storm is pushing Europeans to the right. But the now triumphant right will inevitably become saddled with the crisis and the target of public anger.
The chastened left will claim it has the answers to stagnation and unemployment and be voted back in. And so the dreary cycle will continue. Luckily for politicians, voters everywhere have short memories.
It's too soon to tell if Spain will manage to pull out of the current crisis. Its large banks are still holding up. But this fun-loving nation is staggering under a mountain of debt accumulated during its credit binge.
But Spain's debt hangover seem almost modest compared to that of the United States, whose deficit may hit $1.5 trillion this year and household debt is still higher than Spain's.
