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Kai Ryssdal:You really need to know your Christian calendar to understand today’s European debt crisis news. Spain’s biggest labor unions have called a general strike for September 29. They’re probably giving themselves as much lead time as they can to help drum up support. But the date’s also heavy on symbolism. The 29th of September is the Christian holiday of Michaelmas, otherwise known as the Feast of St. Michael the Archangel, famous for his biblical defeat of Lucifer.
Organized labor in Spain may have a less epic battle on its hands, but workers are doing all they can to protest plans to change Spanish labor laws. Last week, they struck over another issue: looming government budget cuts. You roll in the denials that Spain’s going to need a bailout just like they denied Greece was going to need a bailout — right up until it got a bailout — and the European debt crisis seems to be taking one step forward two steps back.
So we’re going to spend some time over the next couple of days on Europe and its problems. We begin in the Spanish capital, Madrid, with Marketplace’s Stephen Beard.
Men singing in Spanish
Stephen Beard: A group of men — some dressed comically as bullfighters — have thrown a party on the Gran Via, Madrid’s main shopping street.
Doesn’t sound like a city in recession. But there is an undertow of anxiety here. Away from the fiesta, one of the revelers, Alejandro Gomez, admits he’s worried about his business.
Alejandro Gomez: I have a restaurant in the suburb of Valdemoro, and we are feeling the downturn. Because of the collapse of the construction industry, we are getting fewer customers.
Less than a mile away there’s another restaurant where business is booming. No shortage of customers here. They line up in their dozens every day and present their free meal ticket to be clipped at the door. This is one of 14 free restaurants set up here feed the needy.
Joaquin Calvo of the Catholic charity Caritas.
Joaquin Calvo: The number of people coming for food have increased by 80 percent. We are full. I mean, we are not able to do anything more.
The financial crisis hit Spain hard. Construction forms a bigger part of the economy here than elsewhere. When the real estate market crashed, the country was left with a massive burden of debt. And then unemployment really took off.
Gayle Allard: In Spain, what happens is they have such a rigid labor market that the minute a crisis hits, they begin destroying jobs faster than any other country on the planet.
Gayle Allard, professor of economics at the IE Business School in Madrid. She says two-thirds of Spanish workers enjoy exceptional job protection. It can be very expensive for employers to fire them, and that makes the one-third on temporary contracts highly vulnerable.
Allard: The minute crisis hits, what they do is liquidate temporary workers as fast as they can before they pass this threshold where they become permanent and they become expensive to fire.
Since 2007, unemployment has shot up to 20 percent. With income tax revenues slumping and welfare payments soaring, the budget deficit has also taken off. Along with Greece and Portugal, Spain has incurred the wrath of its eurozone partners. Who’s to blame? Partly a dead and discredited figure from Spanish history.
Sound of newsreel
General Franco, the dictator who ruled Spain. When he died in 1975, he bequeathed the country a rigid, paternalistic labor code.
Professor Javier Diaz-Gimmenez is with the IESE Business School.
Javier Diaz-Gimmenez: Part of what kept his regime going for 40 years was a very sheltered labor market. People were not fired, so workers were guaranteed a job for life. And in return, of course, we didn’t have any political freedoms.
Back on the Gran Via, reveler Alejandro Gomez sings a nationalist song about blood and the flag. It is completely out of tune with modern Spain. Spaniards are the least nationalistic Europeans — happy to surrender sovereignty to the European Union and to give up their currency too. For them, EU membership means democracy. Many seem alarmed that their future in the eurozone may now be at risk.
Woman on the street: Newspapers are saying that the European Union is thinking about taking away the euro from Spain, Greece and Portugal. And we are afraid. Because without the euro, Spain is nothing.
But that faith in the euro may be sorely tested. Spain’s European partners have pressured it to make painful cuts in public spending and to shake up the labor law. Unions have promised a general strike.
Will Spain one day decide the eurozone is just another sort of tyranny?
In Madrid, this is Stephen Beard for Marketplace.
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