Spain Climbs Toward What It Hopes Is Recovery
Against a backdrop of violent street protests this week, Spain moved to reassure markets and pull itself out of the red. Lauren Frayer reports that in the past week, the country has announced a huge cut to government spending and auditors have revealed how much aid Spanish banks will need.
SCOTT SIMON, HOST:
This is WEEKEND EDITION from NPR News. I'm Scott Simon. The roiling debt crisis in Europe continues with violent protests in both Greece and Spain this week. We'll hear a report from Athens in a moment. First, to Spain. Amid street protests, the country moved to reassure markets. First up came Thursday, when the government cut $50 billion from next year's budget. On Friday, step two: auditors revealed just how much aid Spanish banks will need. And now, economists are divided over whether a third step is warranted - an international bailout. Lauren Frayer reports from Madrid and how Spaniards are coping with economic uncertainty.
(SOUNDBITE OF CROWD PROTESTING)
LAUREN FRAYER, BYLINE: While thousands of Spaniards were venting their anger over austerity outside parliament this past week, Julia Gonzales spent two full days in the unemployment line. She's a 46-year-old professor who lost her job three years ago when the crisis first hit. So, she retrained and found a slightly different job, and then lost that one. Her latest stint of unemployment has lasted eight months.
JULIA GONZALES: (Through Translator) I'm a sociologist and a theater professor, and I'm also an actress. I've trained to be versatile for lots of different jobs. But what's so serious about this crisis is that there's no work anywhere in any field.
FRAYER: Gonzales is at her wits' end, fighting bureaucracy. She just got turned down for additional benefits because she owns an expensive house. But it's mortgaged to the hilt, and since the housing market collapsed, she can't find a buyer.
GONZALES: (Through Translator) They leave you in a situation where you don't have enough money to buy food. Because literally, my whole unemployment check goes toward paying my mortgage. Do you think politicians realize that?
FRAYER: Politicians cut unemployment benefits in the last round of austerity, even as the jobless rate rose and more people needed help. One in four Spaniards is out of work - the highest rate in Europe. Now, they've introduced another $50 billion dollars' worth of cutbacks. Gonzales blames ruling elites who she says don't understand how their decisions affect real people.
GONZALES: (Through Translator) For example, our dear prime minister earns the equivalent of several salaries. This is such a shame. It makes me sick. I'm so angry.
FRAYER: Fueling emotions was a photograph splashed across front pages here this week of Prime Minister Mariano Rajoy puffing a cigar, strolling the streets of Manhattan. He was there for the U.N. General Assembly. Rajoy rushed back to Spain to try to put his house in order - a new budget, and a rescue for Spanish banks. Auditors estimate banks here need an extra $76 billion dollars to survive the housing market collapse. Madrid is expected to tap bailout loans on offer from Europe. Politicians hope that's the last big fix. But economists aren't so sure.
GAYLE ALLARD: Spain's got a really long hard road ahead. They're not finishing this in 2013.
FRAYER: Economist Gayle Allard at Madrid's IE Business School says the government's 2013 draft budget is wildly optimistic. And if this past week's violent protests are any indication, the public is losing what little patience it had left.
ALLARD: How much longer are people going to accept the austerity? You know, they've liquidated savings, they're living off the old members of the family, they've run out of their unemployment benefits. This next year is going to be a really, really, really tough year for the country. And you can feel it now.
FRAYER: Back at the unemployment office, Julia Gonzales is thinking of moving abroad - maybe to Argentina - later this year, when her unemployment benefits run out.
GONZALES: (Spanish spoken)
FRAYER: Latin Americans used to come here to Spain, but now the immigration has reversed, she says. Maybe I'll help Spain discover the Americas again. For NPR News, I'm Lauren Frayer in Madrid. Transcript provided by NPR, Copyright NPR.