Spaniards steel themselves for the effects of €27 billion worth of cuts this year as the country struggles to bring its budget deficit down from 8.9 per cent of GDP in 2011 to under three per cent by 2014. Spain is forecast to be the only country among the 17 nations of the Eurozone to remain in recession in 2013. Unemployment, already at 24.3 per cent, is expected to worsen. Half of all Spaniards aged between 18 and 25 are out of work – youth unemployment in Spain now exceeds 50 per cent, matching that of Greece. Statistics show that 21.8 per cent of Spain's population of 47 million are at risk of poverty, a sharp increase since the crisis hit in 2008, and that 1.7 million households across Spain now have no wage earner, an increase of 10 per cent since the start of this year. The number of Spaniards living outside the country has increased by more than 20 per cent over the past three years, many emigrating to northern Europe and healthier economies such as Germany, but also to Latin America (of the estimated 37,000 who emigrated in 2010, nearly 60 per cent went to countries outside the EU). In Spain overall, more than 170,000 businesses have folded since 2008, most of them in the small and medium category. Everywhere across Spain construction has all but ceased, and plans to complete the new residential blocks have been put on hold since the property market bottomed out in 2007. (House prices reached a peak in 2006, began to plummet in 2007 and the global financial crisis hit in 2008. The problem was that during the decade-long building boom from the mid-1990s people were encouraged to take mortgages often of up to 110 per cent. Property was seen as an investment and the prices went up and up. People mortgaged to the hilt. It doesn't take much to force a change in lifestyle. With both spouses working things were fine, but it only took one to lose their job for a family in dire trouble.
The Red Cross, known for providing humanitarian aid in disaster zones, in 2010 helped 1.6 million people in Spain; last year that figure had risen to two million. The Red Cross operates a food bank issuing basics such as flour, cereals, pasta, milk and tinned vegetables to those who have no other means of support. Nappies are distributed to those with young children. Cash handouts are given to those with an emergency bill to pay. And what is surprising is that many of those lining up describe themselves as middle class. They have university degrees, mortgages; they used to drive new cars to their jobs, they took foreign holidays.
"The profile of those we help has changed radically since the crisis began,"José Chai Jurado, the president of the Tres Cantos Red Cross branch, who also runs his own online marketing company, said. "This is one of the richest towns of Madrid. People here are well-off, there is a high standard of education and a high standard of living. Where we used to help the real down-and-outs, now we see normal middle-class Spaniards, people who never ever thought they would reach such lows." It is, Jurado explained, a question of simple mathematics. "People who lost their jobs two to three years ago are the ones that are coming. For the first two years they can survive on unemployment benefits, the next year they can live off their savings. But by the end of the third year, there's nothing left and they still have the high mortgages on properties that they can never hope to sell for the price they bought at. And the family support has been so stretched, it just isn't there any more. That's when they turn to us."
It is the erosion of Spain's "middle class" that provokes fears of yet darker times to come. "The middle class will disappear in a place such as Tres Cantos within three to four years," José Antonio Martinez Lopez, an economist with BBK Bank, "Spain is going to revert to how life was in the 1970s in the uncertain years following the fall of the dictatorship. It was hard and it's going to be harder still. Everyone is in denial, especially the politicians." He warned "Now the streets are cleaned and rubbish collected every day, but come September, we'll be lucky if rubbish is collected twice a week," he said. "A lot more municipal workers are going to be laid off."
Teachers have been protesting over plans to extend their working hours and increase classroom sizes by 20 per cent over the next academic year. May saw the first ever strike coordinated by the nation's five main teachers' unions, from nursery school to university. Those teachers qualified as functionarios – effectively civil servants have seen their pay cut by five per cent, other teachers employed on short-term contracts, have seen their positions cut entirely.
Sonia Madrid Vega, an unemployed teacher, explains "We buy less, we eat less. We never go out and I haven't bought myself new clothes for years. All the extras go on the children, for their clothes, their shoes, their school meals. I don't know what we'll do when the savings run out...we were two young happy people with great dreams and ambitions. I can't think about what lies ahead. We thought the good times would never end, but we were wrong."
The Red Cross, known for providing humanitarian aid in disaster zones, in 2010 helped 1.6 million people in Spain; last year that figure had risen to two million. The Red Cross operates a food bank issuing basics such as flour, cereals, pasta, milk and tinned vegetables to those who have no other means of support. Nappies are distributed to those with young children. Cash handouts are given to those with an emergency bill to pay. And what is surprising is that many of those lining up describe themselves as middle class. They have university degrees, mortgages; they used to drive new cars to their jobs, they took foreign holidays.
"The profile of those we help has changed radically since the crisis began,"José Chai Jurado, the president of the Tres Cantos Red Cross branch, who also runs his own online marketing company, said. "This is one of the richest towns of Madrid. People here are well-off, there is a high standard of education and a high standard of living. Where we used to help the real down-and-outs, now we see normal middle-class Spaniards, people who never ever thought they would reach such lows." It is, Jurado explained, a question of simple mathematics. "People who lost their jobs two to three years ago are the ones that are coming. For the first two years they can survive on unemployment benefits, the next year they can live off their savings. But by the end of the third year, there's nothing left and they still have the high mortgages on properties that they can never hope to sell for the price they bought at. And the family support has been so stretched, it just isn't there any more. That's when they turn to us."
It is the erosion of Spain's "middle class" that provokes fears of yet darker times to come. "The middle class will disappear in a place such as Tres Cantos within three to four years," José Antonio Martinez Lopez, an economist with BBK Bank, "Spain is going to revert to how life was in the 1970s in the uncertain years following the fall of the dictatorship. It was hard and it's going to be harder still. Everyone is in denial, especially the politicians." He warned "Now the streets are cleaned and rubbish collected every day, but come September, we'll be lucky if rubbish is collected twice a week," he said. "A lot more municipal workers are going to be laid off."
Teachers have been protesting over plans to extend their working hours and increase classroom sizes by 20 per cent over the next academic year. May saw the first ever strike coordinated by the nation's five main teachers' unions, from nursery school to university. Those teachers qualified as functionarios – effectively civil servants have seen their pay cut by five per cent, other teachers employed on short-term contracts, have seen their positions cut entirely.
Sonia Madrid Vega, an unemployed teacher, explains "We buy less, we eat less. We never go out and I haven't bought myself new clothes for years. All the extras go on the children, for their clothes, their shoes, their school meals. I don't know what we'll do when the savings run out...we were two young happy people with great dreams and ambitions. I can't think about what lies ahead. We thought the good times would never end, but we were wrong."
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