Mar 30 2012

Spain on EU handouts? I don’t see it.

 

Spain's austerity budget

Adam Austerfield was interviewed for BBC Radio 5 during the General Strike in advance of today’s budget.

When we look at the situation in Spain, while it’s not as severe as Greece, people are starting to come out on the streets, there are small incidents of violence, it suggests that things there are starting to step up.  

They are stepping up, it’s fair to say, but it’s possibly overdramatic to say they’re being compared with events in Athens. Certainly there is huge discontent, especially among the young people, but there’s not really the same kind of violent discontent that we’ve seen elsewhere. The Spanish have had several general strikes over the past few years and I would expect these to continue, but not to turn into the kind of violence we’ve seen in Greece.

Will the austerity budget go some way towards fixing the problem and stop Spain from becoming like Greece and relying on handouts?

Yes, it will. The new government, which only took power in December, has had a short time to design and suggest their new policies in the budget. Much like Cameron’s government in the UK, they have a good electoral cycle and are getting the tough stuff out of the way first. That’s the only way to do it here.

Surviving on handouts? I don’t see it. Spain has been a contributor to the European Union for some years rather than a net recipient. So while they’re in a severe situation at the moment, I can’t see them in the same place as Greece, Ireland or Portugal. My personal and researched evaluation is that they are much more like the Hungarian situation, in which they may try to negotiate a credit line through this year if things get as bad as they could do.

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