Spain’s Pissed Too
by Fathouse Production
Q90 billion absorbed by corruption in less than a decade; Q100 billion in cuts to education and healthcare; a dictator’s legacy enjoying impunity; a female number two leading a corruption ring. Sound like Guatemala? Actually, we’re in the mother country, Spain! In 2013, government agencies investigated over 1,600 potential cases of corruption, mostly involving the country’s two main political parties. Only around 20 people have been sent to jail for the recent corruption wave. This past Sunday, May 24th, Spain voted in municipal elections. The new political party that grew out of the 2011 15M movement, Podemos, won control of Madrid and Barcelona. 15M was Spain’s Occupy Wall Street four months prior to its American baby cousin. Unlike their baby cousin, their motto was, ‘We’re going slow, because we’re going far.’ Podemos’ leader is a professor in his 30s with a goatee, ponytail, and kickass holy name: Paul Churches (Pablo Iglesias).
The financial crisis hit Spain because of a housing bubble created after new laws allowed speculators to buy up properties at record rates to later resell them. This reduced supply and inflated the price of homes for people who, thanks to banks seeing dollar signs in predatory mortgage loans, bought those homes anyway.
Since this was so common, the construction sector was the country’s largest employer. Building kept going, construction and other jobs were created, and banks made more loans. Local and national government at best turned a blind eye and at worst took bribes to keep the machine regulation-free. The country’s growth was based on construction, and the people in power – bankers, large investors, construction moguls, and politicians – were making huge profits. After the bubble burst, it was found that the majority of Congresspeople had significant real estate investments, some with over 20 homes.
Simultaneously, two totally predictable disasters occurred. The country realized that the supply of homes was actually way over demand once speculation was taken out of the equation, so property values plummeted. People owed more for their homes than their homes were worth. The construction market collapsed and huge numbers of people lost their jobs, which led to fewer people spending money and more businesses folding. Meanwhile, Spanish banks not only lost their huge investments in the construction and real estate markets, but many US banks collapsed because of their own corruption crisis of short-term betting, and stopped lending money to banks in Spain, so they also stopped lending. Many of them collapsed, and many others suddenly raised the payments on existing mortgages, because in the fine print they hinted that their rates were flexible. Cue the riot gear and violent evictions. They also cashed in on the fine print in the contracts of a lot of retired workers who suddenly saw their modest savings disappear Argentina-lite style.
Spain got its kings back after dictator Franco died in 1974. He had taken a young prince out of exile and personally groomed him. In 2014, this king abdicated because of corruption scandals and his unpopularity (he liked to pose next to elephants he’d killed) and his son became king. This king’s sister, Infanta Cristina, and her husband have now been indicted for corruption involving millions of euros. Her husband’s defense: These shady transactions… I didn’t read the fine print.