This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.guardian.co.uk/world/2012/jun/03/spain-euro-austerity-bailout
The article has changed 6 times. There is an RSS feed of changes available.
| Version 1 | Version 2 |
|---|---|
| Bank bailout makes Spaniards question their future as euro agonies mount | Bank bailout makes Spaniards question their future as euro agonies mount |
| (30 days later) | |
| Luz María Reyes had her bags packed and was ready to leave. A bulging red suitcase sat on her double bed as she waited for the bailiffs to evict her and repossess the family's modest flat in the working-class Madrid neighbourhood of Aluche. | Luz María Reyes had her bags packed and was ready to leave. A bulging red suitcase sat on her double bed as she waited for the bailiffs to evict her and repossess the family's modest flat in the working-class Madrid neighbourhood of Aluche. |
| "I've sent my daughter and grandson to a friend's house. I don't want them to see this," Reyes, 52, said as she waited for a court official and his police escort to ring the doorbell and shatter her dreams of a secure future for her family. | "I've sent my daughter and grandson to a friend's house. I don't want them to see this," Reyes, 52, said as she waited for a court official and his police escort to ring the doorbell and shatter her dreams of a secure future for her family. |
| As Spain marched ever closer towards Europe's biggest and most dangerous bailout, Reyes and many others were too worried about the damage that recession, rampant unemployment and austerity have brought to their lives to fret about the bigger picture. | As Spain marched ever closer towards Europe's biggest and most dangerous bailout, Reyes and many others were too worried about the damage that recession, rampant unemployment and austerity have brought to their lives to fret about the bigger picture. |
| Seven years ago a local savings bank persuaded Reyes, a cleaner, to take out a 100% mortgage to buy the flat for €195,000 (£157,000). The bank has since merged with half a dozen others, all of which had thrown bad money at property speculators, to form a sick giant called Bankia. | Seven years ago a local savings bank persuaded Reyes, a cleaner, to take out a 100% mortgage to buy the flat for €195,000 (£157,000). The bank has since merged with half a dozen others, all of which had thrown bad money at property speculators, to form a sick giant called Bankia. |
| Last week, as Reyes waited for the bailiffs, Bankia was demanding €23.5bn of taxpayers' money to stave off collapse. That is €1,350 from each working Spaniard. Among other costs that need absorbing by the savings banks that made up Bankia are a €6.2m payoff to one senior executive who helped drive the bank to disaster and €14m to another. | Last week, as Reyes waited for the bailiffs, Bankia was demanding €23.5bn of taxpayers' money to stave off collapse. That is €1,350 from each working Spaniard. Among other costs that need absorbing by the savings banks that made up Bankia are a €6.2m payoff to one senior executive who helped drive the bank to disaster and €14m to another. |
| "I put on the television and see that all this money is being given to Bankia, but at the same time the bank is taking away from those in need," said Reyes. | "I put on the television and see that all this money is being given to Bankia, but at the same time the bank is taking away from those in need," said Reyes. |
| Things started going wrong almost as soon as she bought the flat. "The mortgage repayments kept going up. They never explained that to me properly," she said. Then the property bubble that Spain's savings banks had so enthusiastically pumped up with loans burst, just as a world financial crisis started. | Things started going wrong almost as soon as she bought the flat. "The mortgage repayments kept going up. They never explained that to me properly," she said. Then the property bubble that Spain's savings banks had so enthusiastically pumped up with loans burst, just as a world financial crisis started. |
| Reyes lost her evening job looking after an elderly woman and found her cleaning hours also reduced. Now she earns €500 a month. With Spain's economy back in a double-dip recession and unemployment at 24% and growing, her chances of finding extra work are slim. | Reyes lost her evening job looking after an elderly woman and found her cleaning hours also reduced. Now she earns €500 a month. With Spain's economy back in a double-dip recession and unemployment at 24% and growing, her chances of finding extra work are slim. |
| The bank now values her property at €100,000 – half the price she paid for it. It not only wants to throw her out, but says she will still owe a further €130,000 in unpaid capital and interest. | The bank now values her property at €100,000 – half the price she paid for it. It not only wants to throw her out, but says she will still owe a further €130,000 in unpaid capital and interest. |
| A shared sense of injustice brought dozens of neighbours and activists from Spain's indignado movement to her front door this week. They blocked the bailiffs when they turned up, winning her a few weeks' respite. | A shared sense of injustice brought dozens of neighbours and activists from Spain's indignado movement to her front door this week. They blocked the bailiffs when they turned up, winning her a few weeks' respite. |
| Like many Spaniards, those who gathered at Reyes's house know that the huge hole that has appeared in Spain's banking system is not the fault of ordinary people like Reyes – mortgage defaults as a whole are low – but because of the loans given to wealthy developers and land speculators. | Like many Spaniards, those who gathered at Reyes's house know that the huge hole that has appeared in Spain's banking system is not the fault of ordinary people like Reyes – mortgage defaults as a whole are low – but because of the loans given to wealthy developers and land speculators. |
| Reyes is one of 350,000 people from Ecuador – many with joint nationality – who came to booming Spain a decade ago in the hope of leaping from the developing world to the sophistication and shelter of the European Union. It was a period when booming Spain drew in more than four million immigrants. "Now I wish I had never come," she said. | Reyes is one of 350,000 people from Ecuador – many with joint nationality – who came to booming Spain a decade ago in the hope of leaping from the developing world to the sophistication and shelter of the European Union. It was a period when booming Spain drew in more than four million immigrants. "Now I wish I had never come," she said. |
| Many of her fellow countrymen have already given up. Some 54,000 – more than one in seven – left last year, often leaving flats that were not paid for and debts to banks behind them. More will go this year. | Many of her fellow countrymen have already given up. Some 54,000 – more than one in seven – left last year, often leaving flats that were not paid for and debts to banks behind them. More will go this year. |
| While Reyes was waiting for the bailiffs, 10,000 miners in hard hats arrived in the capital. They had travelled for six or m ore hours from the coalmines of northern Asturias and León. They climbed off their coaches by Real Madrid's Santiago Bernabéu stadium, where property developers, bankers and politicians regularly rub shoulders in the VIP boxes. | While Reyes was waiting for the bailiffs, 10,000 miners in hard hats arrived in the capital. They had travelled for six or m ore hours from the coalmines of northern Asturias and León. They climbed off their coaches by Real Madrid's Santiago Bernabéu stadium, where property developers, bankers and politicians regularly rub shoulders in the VIP boxes. |
| Spain's drive to austerity, blamed for helping plunge the country back into recession, threatens the lives of 9,000 coalminers and their families. As prime minister Mariano Rajoy's conservative government seeks to cut spending in order to reduce a bulging deficit, the mining industry is being sacrificed. | Spain's drive to austerity, blamed for helping plunge the country back into recession, threatens the lives of 9,000 coalminers and their families. As prime minister Mariano Rajoy's conservative government seeks to cut spending in order to reduce a bulging deficit, the mining industry is being sacrificed. |
| As with the British miners under Margaret Thatcher, however, a long, hard fight is shaping up. "They have decided to cut off the subsidies to coalmining," said Julio, a white helmet tilted back on his head. "That will be the end of the mining industry and a disaster both for our families and for thousands more who live off mining indirectly." | As with the British miners under Margaret Thatcher, however, a long, hard fight is shaping up. "They have decided to cut off the subsidies to coalmining," said Julio, a white helmet tilted back on his head. "That will be the end of the mining industry and a disaster both for our families and for thousands more who live off mining indirectly." |
| Julio's father was also a miner in Asturias, but he feels that his 11-year-old son will probably not be able to follow the family tradition. "It is a shame, because Spain needs coal. Otherwise it will import the stuff and prices will go up. We have no oil or gas here. Coal is all we've got." | Julio's father was also a miner in Asturias, but he feels that his 11-year-old son will probably not be able to follow the family tradition. "It is a shame, because Spain needs coal. Otherwise it will import the stuff and prices will go up. We have no oil or gas here. Coal is all we've got." |
| The miners marched angrily towards the industry ministry, letting off ear-shattering detonators. Police decided that was too much and charged. As has now become routine in Madrid protests, police also took their batons to press photographers – this time targeting Juan Luis Jaén of the local Madridiario website. | The miners marched angrily towards the industry ministry, letting off ear-shattering detonators. Police decided that was too much and charged. As has now become routine in Madrid protests, police also took their batons to press photographers – this time targeting Juan Luis Jaén of the local Madridiario website. |
| So far Spaniards have reacted peacefully to the crisis they are living through, with the avowedly non-violent indignados to the fore. But that may change. | So far Spaniards have reacted peacefully to the crisis they are living through, with the avowedly non-violent indignados to the fore. But that may change. |
| "Next time we'll bring dynamite!" the miners chanted as they left. | "Next time we'll bring dynamite!" the miners chanted as they left. |
| Spain's dazzling decade, when its economy boomed and immigrants flooded in to fill building sites and clean middle-class homes, now feels like a distant past. | Spain's dazzling decade, when its economy boomed and immigrants flooded in to fill building sites and clean middle-class homes, now feels like a distant past. |
| Enrique Rodríguez once had a small business of his own, translating instruction manuals in the Madrid industrial suburb of Getafe. Now the 40-year-old is one of Spain's long-term unemployed, part of an army of three million people who have not worked for more than year. He and his daughter must live off his wife's odd jobs. | Enrique Rodríguez once had a small business of his own, translating instruction manuals in the Madrid industrial suburb of Getafe. Now the 40-year-old is one of Spain's long-term unemployed, part of an army of three million people who have not worked for more than year. He and his daughter must live off his wife's odd jobs. |
| "Those in power don't seem to care," he says. "They live well, but they are burning the rest of us up with their austerity measures." | "Those in power don't seem to care," he says. "They live well, but they are burning the rest of us up with their austerity measures." |
| For a generation of young Spaniards, it is as if the boom never existed. While unemployment generally runs at 24%, more than half the country's under-25s are without work. | For a generation of young Spaniards, it is as if the boom never existed. While unemployment generally runs at 24%, more than half the country's under-25s are without work. |
| In a country where almost a third of schoolchildren fail to gain the equivalent of GCSEs, that has condemned a generation of the young to an empty future. And even those who have spent five years studying for practical university degrees see little hope. | In a country where almost a third of schoolchildren fail to gain the equivalent of GCSEs, that has condemned a generation of the young to an empty future. And even those who have spent five years studying for practical university degrees see little hope. |
| "There is no work here," said Cristina García, a 26-year-old industrial engineer who has started taking German lessons at Madrid's Goethe Institute. Rumours of job opportunities in the country that many Spaniards now blame for failing to support them through hard times has seen a rush to schools like this. "I want to go to Germany and find a job," said García. | "There is no work here," said Cristina García, a 26-year-old industrial engineer who has started taking German lessons at Madrid's Goethe Institute. Rumours of job opportunities in the country that many Spaniards now blame for failing to support them through hard times has seen a rush to schools like this. "I want to go to Germany and find a job," said García. |
| But some cannot leave. Music teacher and singer Cristina López is 35, recently separated, and has an 11-year-old daughter. She lives in a flat that she can no longer afford, especially since she lost her teaching job. Now she gives private tuition to those children whose parents are still prepared to pay out for small luxuries. | But some cannot leave. Music teacher and singer Cristina López is 35, recently separated, and has an 11-year-old daughter. She lives in a flat that she can no longer afford, especially since she lost her teaching job. Now she gives private tuition to those children whose parents are still prepared to pay out for small luxuries. |
| While her income dwindles, her costs are rising and the support the state gives her is disappearing. Over the past year she has seen how Rajoy's conservative People's party won an absolute majority – ousting the socialists of José Luis Rodríguez Zapatero, who had already set the country on the austerity path. | While her income dwindles, her costs are rising and the support the state gives her is disappearing. Over the past year she has seen how Rajoy's conservative People's party won an absolute majority – ousting the socialists of José Luis Rodríguez Zapatero, who had already set the country on the austerity path. |
| But now Rajoy is ramping up austerity as Germany's Angela Merkel and the European commission in Brussels demand deficit cuts. | But now Rajoy is ramping up austerity as Germany's Angela Merkel and the European commission in Brussels demand deficit cuts. |
| "I'm much worse off than even a year ago, " López said . "I've lost the grant for my daughter's school costs and I've seen the price of electricity and public transport rise. There is less and less work and I cannot pay all my bills. I can't really afford to live in this house any more." | "I'm much worse off than even a year ago, " López said . "I've lost the grant for my daughter's school costs and I've seen the price of electricity and public transport rise. There is less and less work and I cannot pay all my bills. I can't really afford to live in this house any more." |
| Austerity is proving costly for ordinary Spaniards. The government is lowering electricity subsidies by hiking prices. Ticket prices on Madrid's public transport system have leapt by 50%. "I'm just suffering what everybody else is suffering from," said López. | Austerity is proving costly for ordinary Spaniards. The government is lowering electricity subsidies by hiking prices. Ticket prices on Madrid's public transport system have leapt by 50%. "I'm just suffering what everybody else is suffering from," said López. |
| Even those lucky enough to have work have realised that the future is unlikely to smile on them. Journalist Sofía de Roa works in the public relations department of a Madrid university. Like many graduates she is a mileurista – destined to earn a salary of €1,000 for the foreseeable future. | Even those lucky enough to have work have realised that the future is unlikely to smile on them. Journalist Sofía de Roa works in the public relations department of a Madrid university. Like many graduates she is a mileurista – destined to earn a salary of €1,000 for the foreseeable future. |
| Like a significant number of other Spaniards, however, she refuses to fall into pessimism and misery. Things, she believes, can be changed. In her free time she works at Agora Sol Radio, a station that takes its inspiration from the 2011 protests in Madrid's central Puerta del Sol square. | Like a significant number of other Spaniards, however, she refuses to fall into pessimism and misery. Things, she believes, can be changed. In her free time she works at Agora Sol Radio, a station that takes its inspiration from the 2011 protests in Madrid's central Puerta del Sol square. |
| "We give voice to those who don't normally find an outlet," she said. " We are showing the powers that be that we haven't given up, that we are watching them and demanding they get to work and let us be the masters of our own lives." | "We give voice to those who don't normally find an outlet," she said. " We are showing the powers that be that we haven't given up, that we are watching them and demanding they get to work and let us be the masters of our own lives." |
| It is a message that, in other terms, Rajoy tries to give. "We must give the best of ourselves when things are bad," People's party secretary general María Dolores de Cospedal said. "We'll get out of this." | It is a message that, in other terms, Rajoy tries to give. "We must give the best of ourselves when things are bad," People's party secretary general María Dolores de Cospedal said. "We'll get out of this." |
| But, in a country of fervent euro- enthusiasts, scepticism about the European project is beginning to spread. Maybe, some think, they would be better off without the euro. | But, in a country of fervent euro- enthusiasts, scepticism about the European project is beginning to spread. Maybe, some think, they would be better off without the euro. |
| But that would take Spain back half a century, when a rightwing dictator kept it as a European outsider, argued Luis Garicano of the London School of Economics and two other economists in a dramatic front-page plea in El País newspaper last week. | But that would take Spain back half a century, when a rightwing dictator kept it as a European outsider, argued Luis Garicano of the London School of Economics and two other economists in a dramatic front-page plea in El País newspaper last week. |
| "We don't want to go back to the 1950s," they said. "Leaving the euro would be far worse than we can imagine." | "We don't want to go back to the 1950s," they said. "Leaving the euro would be far worse than we can imagine." |
| Additional reporting by Ofelia de Pablo and Javier Zurita | Additional reporting by Ofelia de Pablo and Javier Zurita |
| Our editors' picks for the day's top news and commentary delivered to your inbox each morning. | |
| Our editors' picks for the day's top news and commentary delivered to your inbox each morning. Enter your email address to subscribe. |