By Vicente Navarro
The history of Spain in the twentieth century (and into the twenty-first century) is the constant conflict between, on the one hand, financial establishments, focused on banking, and business, focused on large employers (assisted by a state dominated by conservative forces, including the armed forces and the judiciary and police, and the hierarchy of the Catholic Church, and supported by most of the media establishment) and on the other hand, the masses trying to achieve social well-being and quality of life they believe they deserve but the development of which will inevitably come into conflict with the privileges of those establishments. This conflict marked the twentieth century and continues now in the XXI century.
The height of this conflict was in the last century when, in response to the highly popular reformist policies implemented by a democratic government, there was a military coup that imposed one of the most repressive dictatorships to have existed in Western Europe (according to Professor Malefakis, European fascism expert at the University of Columbia, for every political assassination carried out by Mussolini, Franco carried out ten thousand). This dictatorship was established to defend the interests of the financial and business elite historically dominant in the country.
Popular resistance to Franco
Popular resistance broke that dictatorship in the 1970s. From 1974 to 1978 Spain experienced the greatest social upheaval of any country in Europe. Hence, even if dictator Franco died in bed, the dictatorship ended on the streets. The social protests (led by the labour movement), although decisive in ending this dictatorship, were not strong enough to break the power structure that controlled the state. And an important factor explaining this failure was that the left political parties had just come out of hiding, with many of their leaders in prison or in exile.
The power imbalance in that process of transition was enormous. The Right controlled the state apparatus, in addition to its power in finance and big business, and enjoyed great influence in the media, while the Left was coming out of a dictatorship that had brutally repressed it. The famous “consensus” around the Transition that the Right (and some voices on the Left) refer to constantly to justify the perpetuation of their
power in state institutions, assumes acceptance from the Left of an very unbalanced agreement accepted at the time, which came about because it was seen as the only way out of dictatorship. The Spanish Constitution reflects this imbalance. It does not recognize the universality of social rights (such as health) nor the plurinationality of the Spanish state. This demonstrates the enormous power the Right had in the so-
called “model” Transition to democracy, and that has marked more than thirty years of democracy that has been characterized by large dificiencies.
The social deficit correction
Needless to say that the democratic period has seen enormous changes among which is the establishment of the welfare state, a process led by the Left. The establishment of the national health system in 1986 is an example. And although it did not guarantee universal health care, it did extend rights to health to the majority of the population. Another indicator was the remarkable growth of public social expenditures per capita
(from pensions and other public transfers to the welfare state, health, education, and social services, etc.) that corrected part of the huge social deficit democratic Spain had inherited from the dictatorship. The year the dictator died Spain had the lowest social spending of the countries that would later become the EU-15. In 1975 social spending in Spain represented only 15% of GDP, while the average of the other countries of
the EU post-15, was 22% of GDP.
The Euro & the welfare state
The social deficit correction was interrupted, however, because of the way Spain’s integrated into the Eurozone. The goal of reducing the deficit to a percentage equal to or less than 3% in Spain was to be achieved by reducing public spending. This led the gap between public social expenditures per capita in Spain in relation to the average of the EU-15 to increase considerably, especially under the Aznar government (1996 to 2004). Thus the euro was achieved in Spain at the cost of maintaining the huge social backwardness of the state, a reality that was hidden or remained unknown in the most influential media outlets in Spain. Even as the gap began to decrease again, under the first Zapatero government, this gap in 2007 (the year the crisis began) was greater than that existing in 1993, the year when spending cuts started in order to reduce the deficit to enter the euro. The golden age of the Spanish economy was not used to reduce the country’s huge social deficit, but to lower taxes. Tax reforms in 2006, as well as creating a hole in the Spain’s structural public deficit, made the tax system more regressive.
Today’s attack on welfare & workers
Today we are seeing the most violent attack on the wellbeing of the popular classes by the same establishments that have dominated financial, economic and political life, and the Spanish media, during our history. It is the continuation of civil conflict (which appeared in more belligerent tones during the misnamed Civil War). The objective is to dismantle Spain’s underdeveloped welfare state and weaken the working class.
And the figures speak for themselves. Spain has seen the sharpest decline in labour costs (including salaries, allowances, social security contributions) of any EU-15 [the original western members prior to the EU’s eastern expansion], according to Eurostat. These costs have grown by 0.7% per year, almost three times slower than the average for the EU-15. It’s more or less the same for salaries, which have risen by only 0.8%, compared to 2% in Eurozone. A similar situation can be seen with regard to social spending, which has declined in most areas of the welfare state. Public social expenditure per capita has declined, as has the level of welfare coverage of the population, with a decline in public employment in such services. Such measures are an attack on welfare in Spain, further rolling back the underdeveloped and underfunded welfare state.
These measures are presented as part of plans to enhance “competitiveness” (a famous expression used extensively in the media) and with it exports, which, we are told, will help us overcome the crisis. Exports have continued to expand, but unemployment has not fallen. These policies are not about competitiveness but corporate profitability. And they are succeeding in this.
Vincente Navarro is Professor of Public Policy at the University Pompeu Fabra
nuevatribuna.es January 14, 2013
Translation by Revolting Europe