January 12, 2009

Broken Spain? Plenty to worry about before that”¦

Times in Spain are as of late no less turbulent than in many other parts of Europe. To the well known troubles faced by virtually all European economies (the stock markets’ serial crashes, the credit crunch, the recession settling into the ‘real’ economy), Spain adds some well established imbalances of its economy – the propensity to high unemployment rates, low productivity rates, a worrying trade deficit – and some new troubles, such as the burst of one of Europe’s most spectacular real state bubbles or the exposure of Spain’s largest firms to economic and political risks in distant markets such as Argentina. Spain can count on some valuable assets, most notably the fact that it is part of the Eurozone, which staved off the dangers of monetary speculation that so hardly hit numerous other economies, and the relative soundness of its banking institutions, largely the result of more stringent Bank of Spain regulations and more conservative (and, as it turns out, sounder) business strategies than in the rest of Europe. Nonetheless, analysts predict difficult times ahead as unemployment rises well into the double digits and returns Spain back to its former position as one of the European Union worst performers in job creation.

Times in Spain are as of late no less turbulent than in many other parts of Europe. To the well known troubles faced by virtually all European economies (the stock markets’ serial crashes, the credit crunch, the recession settling into the ‘real’ economy), Spain adds some well established imbalances of its economy – the propensity to high unemployment rates, low productivity rates, a worrying trade deficit – and some new troubles, such as the burst of one of Europe’s most spectacular real state bubbles or the exposure of Spain’s largest firms to economic and political risks in distant markets such as Argentina. Spain can count on some valuable assets, most notably the fact that it is part of the Eurozone, which staved off the dangers of monetary speculation that so hardly hit numerous other economies, and the relative soundness of its banking institutions, largely the result of more stringent Bank of Spain regulations and more conservative (and, as it turns out, sounder) business strategies than in the rest of Europe. Nonetheless, analysts predict difficult times ahead as unemployment rises well into the double digits and returns Spain back to its former position as one of the European Union worst performers in job creation.


Jordi Vaquer i Fanés

Broken Spain? Plenty to worry about before that”¦

Times in Spain are as of late no less turbulent than in many other parts of Europe. To the well known troubles faced by virtually all European economies (the stock markets’ serial crashes, the credit crunch, the recession settling into the ‘real’ economy), Spain adds some well established imbalances of its economy – the propensity to high unemployment rates, low productivity rates, a worrying trade deficit – and some new troubles, such as the burst of one of Europe’s most spectacular real state bubbles or the exposure of Spain’s largest firms to economic and political risks in distant markets such as Argentina. Spain can count on some valuable assets, most notably the fact that it is part of the Eurozone, which staved off the dangers of monetary speculation that so hardly hit numerous other economies, and the relative soundness of its banking institutions, largely the result of more stringent Bank of Spain regulations and more conservative (and, as it turns out, sounder) business strategies than in the rest of Europe. Nonetheless, analysts predict difficult times ahead as unemployment rises well into the double digits and returns Spain back to its former position as one of the European Union worst performers in job creation.
Little of this, however, would suggest a general meltdown of Spain’s economy. In the last decades the country has epitomized the wonders of European integration and the positive aspects of structural and cohesion policies, making use of the money and new opportunities provided by the European context not just to conquer European markets, but to emerge as a substantial player in the international context, most notably in Latin America. EU funds have helped financing an unprecedented upgrade of infrastructure, and allowed the poorest regions to rapidly catch up with the European Union average. Steadily growing above the Eurozone, Spain has at the same time reformed its economy and created prosperity for even its most remote and backwards areas. The current crisis will be hard, it will be tougher for Spaniards than for many other Europeans, but little seems to indicate that Spain is risking a meltdown of a much larger scale than that of its EU partners for economic reasons.
Not that anyone has expressed such fears in the European context. There has been some talk in European media, however, about another risk: that of disintegration under the pressure of separatism or, at least, the possibility that some parts of Spain, notably the prosperous Basque Country and Catalonia, could achieve their independence. The Western European press voiced some concerns on this issue, in particular in the politically tense atmosphere which surrounded the reform of Catalonia’s Statute of Autonomy, the charter which lays the basic principles of Catalan self-government, and again as the Basque government clashed with the Madrid executive over its intentions to reform their own system of self-government and subject it to referenda without to the mandatory approval of the Spanish Parliament. More of these concerns resurfaced, this time also east of the Oder and the Adriatic, as Spain championed opposition to the international recognition of Kosovo’s declared independence in the European Union and in the United Nations.
What are the chances that a domino effect spilling off from the Balkans and/or the Caucasus might result in a breaking of Spain as we currently know it? In the foreseeable future, and following almost any available indicator, they are very slim. Past evidence is the first hint: a much more general wave of secessions in the early 1990s not just in the Balkans and the Caucasus, but also in the Baltic and Central Europe hardly had any real effects on the situation in Spain. For all the irritation displayed by some Spanish nationalists at the emergence of so many new independent countries and the admiration that some Catalan and Basque nationalists expressed for the braveness of the Slovenes in front of Yugoslav tanks, the democratic spirit that pervaded the Baltic countries’ independences, or the smoothness of the Czechoslovak ‘velvet divorce’, changes in the relation of forces both in Catalonia and the Basque Country and in the Spanish scene at large stemmed from election results and the need to form parliamentary majorities, not from any imitation effect on the part of the Catalan or Basque populations.
International observers could be forgiven for thinking that something more serious was affecting Spain between 2004 and 2007: in public appearances and in parliamentary speeches, opposition leaders warned of a serious risk of disintegration of Spain, and their supporting pundits and opinion makers forecasted a constitutional collapse if Catalonia’s new Statute of Autonomy were approved. Not only was the text approved in Parliament, but it gained the endorsement of voters when put to a referendum and has been in place since summer 2006. Similarly alarming language has been heard since in relation to the Basque government’s project to reform its own self-government, in this case outside the constitutional mechanisms foreseen for such eventuality. In both cases, however, analysts with any knowledge of everyday Spanish politics perfectly understood that the somewhat colourful language used in those debates never implied that there was an imminent risk to Spain’s integrity.
Evidence to the contrary is abundant, from regular and reliable opinion surveys estimating support for independence at 27% in the Basque Country (according to Euskobarí³metro, November 2007) and at 18% in Catalonia (according to Centre d’Estudis d’Opinií³: Barí²metre d’Opinií³ Píºblica, May 2008), to election results that give little reason to celebrate to openly pro-independence parties. This is not to say that the independence option would be automatically rejected in a referendum, since it is well known that referenda create the sort of black and white alternatives and tense political atmosphere which make results unpredictable; the prospect of one on independence as such – rather than on an advanced statute of self-rule, the right to self-determination or other connected issues – seems at this point remote. Basque, Catalan, Galician and even other less traditional nationalisms, such as the Canarian, enjoy a considerable degree of support in their home regions, but that can not be equated with a widespread longing for independence as an immediate or priority goal. The existence of these peripheral nationalisms is mirrored by a Spanish nationalism that rejects the notion that any parts of Spain are nations, and consider Spain to be the nation itself.
The sad reality of terrorist acts conducted in the name of the struggle for Basque independence by ETA has not only tarnished an otherwise legitimate, if not necessarily prevailing, opinion, but also distorts the international perception of the situation. Violence, as elsewhere, radically alters the quality of the debate. The fact that assassinations have been relatively rare in the latest years, in particular in comparison with the horrific killing rates of the 1980s, does not imply an absence of violence: ETA-linked street violence (from burned public buses to vandalised political parties’ offices) is a common occurrence, and hundreds of people (mostly politicians and security officers, but also businesspeople, academics and social leaders) live under constant threat and intimidation. The shadow of violence has been a permanent challenge to Spanish democracy. Indeed, some of Spain’s democracy darkest hours, from the involvement of the Spanish security forces, with high level acquiescence from the Gonzí¡lez government, in illegal violent attacks on supposed ETA supporters, to the late-hour attempt of the incumbent Aznar government to blame ETA, for election purposes, for the dreadful 2004 Madrid bomb attacks (soon proved to be the work of an Islamist terrorist cell) have been related to the fight against terrorism. Globally, however, the Spanish democracy has been resilient enough, and has managed to erode social support for violence, limit its scope, and by and large preserve liberties and the rule of law, despite a few sad exceptions (which include instances of human rights abuse and controversial political and judiciary decisions).
National identity is not a black and white question in Spain: identities often overlap, and are difficult to measure. There is nothing like an ethnic census of Spain and, as a matter of fact, identity questions tend to be asked either as a scale or in comparative terms (for instance: more Catalan than Spanish). When questioned about their own self identification, the category ‘as Spanish as Basque/Catalan/Valencian/etc.’ prevails in every part of the country. Although there should be caution in treating all regional results as the same (most people will see Madrilí¨ne as a regional identity, whereas many in the Basque country will feel Basque is a national, rather than regional, identity), the results show that it would be almost impossible to treat all Catalans or Basques (or Galicians or Canarians) as distinct minorities in the way that it is done in many Central European countries, as if their identity would be in necessary contradiction with feeling Spanish. One of the effects of Spain’s successful decentralisation is that issues of identity and self government are more often linked to territories than to individual people, which allows more room for bargaining and political understanding. A former president of Catalonia’s self-government, Jordi Pujol, defined Catalans as those who ‘live and work in Catalonia’. Some peripheral nationalists add the epithet ‘and feel Catalan’. Either way, we are in the realm of living and feeling, rather in that of blood lineage, religion or even language.
Language is indeed the other contentious issue. A matter of recurrent controversy has been the treatment in education, public administration and laws of Basque, Catalan (also known in its southern version as Valencian) and Galician – languages which are spoken altogether by about 11 million Spaniards (roughly one in four) in six ‘Autonomous Communities’ (regions). Here, however, the discussion should not be equated with that of nationalism or even regional identities. The Basque Country, where peripheral nationalism is strongest and Basque identity is widespread and sometimes seen as in opposition to feeling Spanish, is mostly Spanish speaking, whereas the regions where their own language is most widely spoken, Galicia and the Catalan-speaking Balearic Islands, show considerably less support for peripheral nationalism. The percentage of Catalan speakers is lower in Catalonia, where Catalan nationalism is central to the political landscape, than in the Valencian community, where Valencian nationalism is only significant at local level. Language, either mother language or most used one, is therefore a very poor proxy for national identity. By either subjective (self-identification) or objective (birthplace or language) factors, it is extremely difficult to split Spain’s population in several ‘nations’: this denomination is traditionally reserved to territories, and hotly contested in turn by Spanish nationalists, who see Spain as a single nation itself.
Regionalisation of Spain was conceived as the democratic response to the political aspirations of Basques, Catalans and Galicians, which had been expressed already before the Civil War and had been brutally suppressed in the Franco years. Its results, however, have reached far beyond that, empowering all regions, not only the ‘historic nationalities’, and unleashing a rich potential of competitiveness, innovation and regional development. Once known as a depressed backwater which sent migrants to Argentina or to France by the tens of thousands, contemporary autonomous Galicia is better known internationally for its fashion and retail industry (how far do you live from the nearest ‘Zara’?), the voracity of its high seas fishing fleet or its impressive wind power production capacity (which, if it were a country, would rank Galicia 6th in the world). From metropolitan Madrid’s unrivalled subway system to Navarre’s ambitious Horizonte 2010 (75% of all electricity from renewable sources), from Barcelona’s admired 1992 Olympics to Extremadura’s groundbreaking ‘Technological Alphabetisation and Free Software Plan’, many of the leading projects and of the business successes of Spain have been envisaged, implemented and/or sustained by local and regional governments. Often a source of conflict and controversy, the process of devolving not just competences but, to a large extent, political agency to the cities and regions (and more so to the Basque Country and Catalonia, which have the highest levels of both) has proved to be an unqualified success in many fields.
Spain has been trying to project an international image depicting its success in economy and also in building a stable western democracy, and its increased international presence has found sympathy and admiration around the globe. The negative message sent to world opinion every time ETA kills someone does not overwhelm this generally positive perception. The general assumption seems to be that Spain is there to stay, and that centre – periphery tensions are a part of Spain’s political game, a challenge which the country’s democratic system, by and large, successfully manages.
Given its previous successes in generating an image abroad of prosperity and success, of cohesion and stability, it might seem that the Spanish government shot itself on the foot when it became one of the most vocal opponents to the recognition of Kosovo’s independence. That attitude was immediately interpreted by newspapers and analysts around the globe as a direct result of Spain’s own fears of some of its regions unilaterally seceding. Vladimir Putin suggested, weeks before the Kosovar declaration of independence, that Spain had problems similar to those of Serbia, as it ruled over populations which ‘did not want to be part of Spain’, to the irritation of Spain’s politicians and media. Spain’s reaction to Kosovo seemed to confirm his vision.
This analysis, however, fails to recognise other reasons behind the Spanish no. The immediacy of elections (which happened two weeks after the declaration of independence) can explain the vehement tone of the first declarations; but the attachment to international Law should not be overlooked. This doctrine was a sign of identity of the foreign policy of a party, the Socialist, which had reached power after a long campaign in which denouncing the illegality of the former government’s support to military intervention in Iraq had become the main foreign policy leitmotiv. Time and again government members and diplomats, as well as a majority of analysts and journalists, express their opposition to recognising Kosovo’s independence while denying any parallel with the Spanish case. The very fact that such parallel must be denied so many times clearly indicates that there is an underlying fear that Basque or Catalan nationalists might extract the wrong lessons. But equating this to a concern for a short term risk to the very existence of Spain in its current configuration simply does not reflect Spain’s current political landscape.
In historical perspective, but also compared to most countries in its South European and Mediterranean context, contemporary Spain is more of a success story than a failure. And, as long as this is the case, a breaking of Spain under secessionist pressure sounds very unlikely, however strong national feelings may run in some areas of Spain. Hesitantly, and not without conflicts, a large section of the Spanish population and their political leaders have come to view Spain’s diversity as a richness, and count national and regional identities and their expressions (self-government, languages, political parties, associations, cultural events abroad) as part of the shared heritage, a source of complexity and tensions, but also of creativity and healthy competition. The threat of violence remains as a result of ETA’s activities, with a small minority supporting them, but the vast majority of those who want to change the current situation, either in the direction of more self-government and even independence, or in that of a stronger, more centralised Spain, refuse any means other than democratic methods. Tension remains between those Spanish nationalists who have not come to this understanding, and the peripheral nationalists that struggle to preserve and increase their peculiarities and their self-government. But the strength of democracy is precisely to transform pressures and tensions into the mechanisms that trigger progress and change, and eventually strengthen the very democratic tissue of the country. In contemporary Spain, the political system is so far managing to do exactly this.

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