Another Spanish General Strike and the Ugly Side of Austerity

After hearing about the pensioner driven to suicide by the crisis in Greece along with the shocking figure of two "economic-related suicides" in Italy every day on average in 2010 (when 362 unemployed people and 336 entrepreneurs killed themselves), I remember feeling horrified that this recession had left so many people feeling this was the only way out. Now Spain is the latest of the so-called "PIGS" to be suffering this tragic turn of events.

The social cost of having close to 6 million unemployed (that's 25.8% of the labour force) is telling and society is being torn apart at what's happening and at the prospect of further austerity next year after the Rajoy government announced €20bn of extra cuts in an emergency budget in September. There has been a surge in the number of suicides and suicide attempts recently including that of an ex-councillor who threw herself from her balcony as the bailifs arrived on Friday to evict her and her family from their home. The eviction laws are widely seen as unfair and Rajoy himself has called for an end to evictions related to mortgage non-payments. It's this level of desperation that is rousing people on to the streets in the Rajoy government's second general strike in less than a year (general strikes are also taking place on the same day in Portugal, Cyprus, Malta and Greece).

People not accustomed to Spain's tolerance, even in good times, of high levels of unemployment (above 10% in the years preceding the crisis) and wonder at how any economy can function with a quarter of the workforce out of work, are often told about the strength and support of the family unit (as well as a large shadow economy) however even this is now under enormous strain as the recession continues (unemployment "paro" benefits stop after 2 years) and the "number of Spanish households in which every member is out of work climbed to 1.74 million, roughly one tenth of all Spanish families" (source).

Why does the government persist with austerity despite its apparent awful side effects? Well this is part of the current great ideological debate raging amongst politicians and economists all over the world about how to stimulate growth and exit the recession - the Keynesian stimulus response or further "expansionary fiscal austerity" i.e. cut government spending and raise taxes aimed, amongst other things, to shore-up market confidence and allow a government to borrow more at lower interest rates. The Spanish government has at least met its financing needs for the year after raising €4.76 billion in a bond auction on Thursday - borrowing this year at an average interest rate of 3.40 percent, down from a 3.90 percent average for all of 2011. This is good news as the government are keen to avoid a Brussels bailout and the loss of face and perceived sovereignty such a handout would bring with it, arguably precipitating the end of this administration. Whatever way you look at it, the load carried by the average "PIGS" citizen is not likely to get any lighter sometime soon.