Is something rotten in the state of Spain?
Spaniards are shocked and disappointed at the failure of the main parties and the country’s leading institutions to do something about the economic crisis
Four years into the ever-darkening tunnel of recession, growing numbers of Spaniards are losing whatever faith they may have had in their political parties and the country’s institutions. A new survey by pollsters Metroscopia shows that for 90 percent of people, the economic crisis is far and away their most pressing concern; the same percentage also believe that they have been abandoned by politicians of all stripes, accusing them of acting out of self-interest. In just seven months, since October 2011 to May, the number of people who believe that the current political system, with all its faults, is the best that the country has known has fallen from 72 percent to 56 percent.
Multi-billion-euro bailouts to the banks who caused the mess we’re in, along with myriad recent corruption cases and an ever-worsening unemployment rate, have robbed the country’s politicians of what little credibility they may have enjoyed until the crisis kicked in in 2008, since when unemployment has risen to one in four of the workforce, and millions of families have seen their living standards fall sharply, and tens of thousands more have been made homeless. According to the International Monetary Fund, Spain is living through a lost decade, and will not recover the GDP levels of 2008 until 2018. Who is to blame, if not our politicians?
“People don’t understand how we got into this situation. They do not believe that they deserve what is happening to them, and they feel as though they have been abandoned by the government and the state whose job it is to protect them. I am picking up a growing anger and a demand for those responsible for this mess to be held to account,” says Federico Javaloy, a professor of social psychology at Barcelona University.
José Tudela Aranda, a lecturer in administrative law and a legal advisor to the regional parliament of Aragon, believes that the financial crisis is partly the result of a dismantling of the role of the state.
“We have seen how administrative controls have been removed or neutralized, weakening the role of public institutions. The role of secretaries, auditors, or accounts panels has been weakened because we have taken a laissez faire approach and appointed professionals because of the ideological views they hold. This explains the lack of budgetary control. Accounts panels or other means of controlling spending are essential and save money if they avoid the system from being abused, but they are very dangerous when they look the other way and allow malpractice. Corruption isn’t just about stealing money, it is about twisting the law, about giving friends jobs,” he says.
José Tudela and other academics believe that the standards required to stand for office have been lowered, and that many independent professionals have been replaced by political appointees.
Recent opinion polls should be seen as a warning about the erosion of our democracy and the danger of sliding into situations we can no longer control. We are largely unaware of how easily our current economic crisis could spiral into a political crisis. Popular Party (PP) Prime Minister Mariano Rajoy likes to repeat that “Spain is a great country,” but what he fails to understand is that there is a growing feeling among Spaniards that this country’s democratic institutions are on their knees. A member of Rajoy’s government says that the premier is focused exclusively on the crisis, and that it is impossible to discuss other matters of state or social policy.
THE FINANCIAL SYSTEM
The 24 billion euros pumped into Bankia to keep the bank afloat has amounted to 500 euros for every man, woman, and child in this country. More than double the amount of what has just been cut from education and health spending will be needed to keep an institution that had representatives from the main parties on its board at different times, and that was run in its final phase by former Finance Minister Rodrigo Rato.
Bankia is the largest link in a chain of banks to fail in Spain, whose collapse was brought about by a decade or more of excessive lending to the property sector, and which has left the banks with hundreds of thousands of unsold, and in many cases, unfinished, properties. The two main parties used the regional savings banks to fund uncontrolled construction, but so far no heads have rolled. Former Prime Minister José Luis Rodríguez Zapatero undertook timid reforms of the financial sector, and his successor, Mariano Rajoy, is implementing a second round. The PP supported the Socialist Party’s reforms, and the Socialists, in opposition, have supported those of the conservatives. Salvaging the country’s financial system would seem to be the only area where the two parties agree without reserve.
Since the financial crisis began, neither party has been concerned about explaining to the public the nature and scale of the crisis in the banking system. “Parliament is not here to run the banks. This is not a place where we want to crucify anybody,” said José Antonio Alonso, the Socialist Party’s then congressional spokesman, justifying his refusal to call the heads of the country’s main banks to appear before legislators to explain their responsibilities for the crisis. The PP is now following the same procedure; the amount of public money being used to bail out the banks is now significantly larger, and the cuts in public spending are paying for the rescue efforts.
THE BANK OF SPAIN
According to one member of the government, the ongoing bailout of the banks is effectively outsourcing the Bank of Spain’s job. The body responsible for regulating Spain’s financial system, once considered one of Europe’s most respectable, has also been hit hard by the crisis. The government, prompted by the European Union, has just brought in Oliver Wyman and Roland Berger to look over the accounts of the country’s banks. Aware of the damage to the Bank of Spain’s credibility when speaking at the press conference following last week’s Cabinet meeting, Economy Minister Luis de Guindos solemnly promised to “recover the prestige of the Bank of Spain.” The central bank’s governor, Miguel Ángel Fernández Ordóñez, announced that he would be stepping down a month early. His handling of the financial crisis has been criticized by the PP, which sees him as a Socialist Party stooge. He has been accused of failing to see the tsunami coming; of not intervening to prevent failed savings banks from merging with others that were equally insolvent; and above all he is guilty of having been appointed by José Luis Rodríguez Zapatero without the approval of the PP.
The crisis has brought into relief the difficult relationship between central government and Spain’s regions, the latter having been blamed for much of the ballooning public debt. Brussels’ demands that Spain reduce its public deficit have led to a law that will limit the freedom of the regions to set their own budgets, something that even the nationalist parties have accepted. Early elections may take place in the coming months in three regions: Catalonia, which is on the verge of bankruptcy; the Basque Country, where the PP and the Socialist Party have fallen out, something the nationalist parties, right and left, will benefit from; and in Galicia. In all three regions, nationalist parties are expected to do well, which will further strain relations with Madrid.
The only institution that neither of the two main parties has any plans to overhaul, despite Congress clearly having been overcome by new realities. For example, questions to ministers, that will later be answered orally, have to be presented five days in advance, the calendars of plenary sessions are restricted, and the majority of deputies limit their involvement to pressing a button during votes. Reform of Congress has been sidelined for at least the last three legislatures.
More than any other administration, Rajoy’s government has passed laws by decree, avoiding any parliamentary debate and the possibility of the opposition or regional parties proposing amendments. The 10-billion-euro cuts to health and education, for example, were pushed through with just two hours of debate, far less than the time employed to explain the decision to Brussels or the international markets, once in place. The PP uses its absolute majority to block requests for ministers, including the Prime Minister, to appear before Congress to explain decisions. The situation has reached the point that the government ignored the fact that the law requires appointments such as the head of the Council of State, or state news agency EFE, to be announced in Congress before being published in the Official State Bulletin. This resulted in the government having to go back to Congress to tell it something it already knew.
The General Council of the Judiciary (CGPJ), the body that oversees the country’s legal system, has been in the news this year due to accusations that its president, Carlos Dívar, went on private visits paid for by the institution. Dívar first said that he was not required to make explanations to the media, then held a press conference at which he refused to reveal the names of those he had entertained at dinners paid for by the taxpayer.
The PP has blocked calls for him to appear before Congress to explain his expenses. After an uneasy initial silence, the Socialist Party, which effectively appointed him during the last legislature, has finally called for him to explain the accusations. According to Justice Minister Alberto Ruiz-Gallardón, the government is protecting the 70-year-old Dívar in the interests of the CGPJ.
Gallardón says he intends to overhaul the CGPJ completely, to the extent that its 20 members will no longer be full-time appointments. They will no longer be paid, and will lack any kind of infrastructure, as well as continuing to practice law. This follows the French model, although ironically the new president, Francois Hollande, says he intends to switch to the Spanish model. The size of the CGPJ will not be reduced, as this is established by the Constitution. Needless to say, Gallardón will be scrapping proposals for regional versions of the council to be established.
The impartiality of the Supreme Court, presided over by Dívar, has also been questioned following the behavior of several judges there, who were seen by many to have used their positions to maneuver against the now-outcast judge, Baltasar Garzón, facilitating a case brought by a far-right group opposed to his investigation of the crimes against humanity committed by the regime of General Francisco Franco.
Garzón was subsequently barred from practicing after being found guilty of ordering illegal wire taps of suspects in the Gürtel corruption case, which implicates several figures in the PP.
For the last four years the two main parties have failed to fulfill their constitutional obligation to agree on the naming of posts to a number of important institutions. There are four unfilled positions on the Constitutional Court, which are affecting its proper functioning; a short-term appointment has been made to the Ombudsman’s post; and the Court of Auditors is effectively paralyzed. The PP and the Socialists say that they will move ahead with filling these positions in the coming weeks, but so far no contacts have been made.
All parties in Congress and the regional parliaments are currently immersed in a process to tighten up the law regarding their finances. An agreement is expected to be announced in Congress requiring the parties to provide access to their accounts, as well as publishing information regarding loans and donations. Measures are also to be taken to prevent parties using charitable foundations to channel funding, while the Court of Auditors is to be given teeth to sanction parties that break the rules. In future, it should no longer be possible for banks to write off party debts of more than 100,000 euros a year, foundations will no longer be able to receive donations, and will be required to publish their accounts, while the Court of Auditors will be able to impose fines. The parties have also accepted a 20-percent reduction in earnings, although the Socialist Party is to negotiate the flexible application of the measures, given its own difficult finances.
The two main parties have blocked efforts to prevent former prime ministers and ministers from claiming their pensions while earning money from other sources. The only member of the Zapatero government who has turned down this income is Alfredo Pérez Rubalcaba. There are currently 15 former ministers and secretaries of state in receipt of their two-year pension while still being paid for their post as a deputy in Congress. There has been some progress in making the earnings and assets of members of Congress public, but the parliament lacks the authority to be able to check its members’ declarations in this regard.
Opinion polls show that confidence in the monarchy, once held in such high esteem, has been dented by recent events. The scandal surrounding the judicial investigation into the business activities of the king’s son-in-law, Iñaki Urdangarin, has tarnished the royal family’s reputation. The king responded, once the case was out in the open, by excluding Urdangarin and his wife from official events, and by announcing that the Royal Household’s accounts would be open to public scrutiny from now on.
But it was Juan Carlos’ accident while on an elephant-hunting trip to Botswana that caused the most damage, resulting in a 22-percent drop since March in the public’s assessment of the king’s ability to carry out his job: from 74 to 52 percent. Some 51 percent of those polled said that he had failed to give a proper account of what had happened and that his apology was insufficient. In response, the monarch made an unprecedented apology to the Spanish public, promising that such an incident would never happen again, and that from now on, all international trips would be announced in advance.
Never over the last three decades of democracy has any government been so poorly rated — with the opposition garnering an even lower rating — by the electorate in an opinion poll; and this so soon after an election in which the governing party won by a landslide. The government has made much of its recently announced legislation aimed at improving the transparency of public office. The reality is that our prime minister has only given one press conference alone since taking office in January. The 10-billion-euro cuts in health and education spending were announced via a press release. In Italy, a similar measure was announced at a press conference by the prime minister, Mario Monti, along with his labor minister, the latter at least having the decency to weep while the cuts were detailed. Furthermore, the government’s so-called transparency law would allow for thousands of documents relating to a wide range of issues to be kept classified, with no recourse to appeal when requests for information are turned down.
According to the latest Metroscopia poll, 80 percent of Spaniards want to see cross-party agreement on the measures being taken to address the crisis. But the bridges of communication between the prime minister and the leader of the opposition have been broken for months.