Sunday, 24. November 2013

The crisis in Spain

A lot of people have asked me about the crisis in Spain. Do you feel it, does it affect your life, is everybody in Madrid affected by the crisis? Find out more

A lot of people have asked me about the crisis in Spain. Do you feel it, does it affect your life, is everybody in Madrid affected by the crisis? 
Surprisingly depending on who you ask you might get different answers to all these questions. Some people at IE might even say that they are not aware of the crisis in Spain. Is this really the truth? I think that you have to keep your eyes open to see the effects of the crisis. The crisis is everywhere but you need to be willing to see it. 

First, Madrid has been hit by the crisis later than other cities due to the centralistic system. A lot of Spanish major companies have their headquarters in Madrid. Therefore the job market has been less resp. later been hit by the financial turmoil. So, you have to go outside of Madrid to observe the full magnitude of the crisis. There are many deserted villages respectively cities that have been constructed just before the crisis and where nobody lives in. The military is using them for training or homeless people are living there. It's a scary sight like in a science-fiction movie where the entire world seems deserted.


Second, when studying at IE you’re focused on the Salamanca area of Madrid, which is one of the most expensive neighborhoods in Madrid. Also, living next to Retiro park like me makes you live in a privileged area of Madrid. This means when most of your life is around the school area you are not so much confronted with the devastating results of the crisis. When I recently drove back with the car to Madrid I passed a part of Madrid that I would not have thought would be possible in Western Europe. It looked much more like a Favela in Rio or a slum anywhere else in the world. I was surprised and shocked that I haven’t seen this before.


Third, being at IE you’re mostly together with people who came a long way to come here and who are predominantly international students. English is mostly spoken and the financial crisis is just another interesting subject to discuss during the break. Nobody is impacted by the financial crisis here. Except that there are no Spanish companies queuing in front of IE to recruit recent graduates. Hence, to really get the pulse of the situation in the country you need to get out on the street and into the bars and talk to the locals. Not in the region of Salamanca and Retiro but in more in the outskirts of Madrid. Obviously it helps if you speak the language. It is incredible what stories you hear when you talk to the taxi driver, talk to concierge, talk to the cleaning lady or the shop assistant in your shop around the corner. 


Fourth, you should read the news and watch the television to further get a feeling of what is really going on in the country. Although I don’t like the Spanish television that contains countless hours of telenovelas, talkshows and lenghty discussions about football there are a few good shows where you get a glimpse about the dimensions of the crisis and the personal tragedies that are caused by the crisis.


Honestly I didn’t find it easy to do all this that I am writing about. Not enough time, especially in the first three terms. My observations are mostly based on discussions, news in the paper and in the TV and some discussions with Spanish friends. I have not been in the most effected parts of Madrid, I have not been talking to the countless people looking for a job since months, I have not been talking to the people at the countless demonstrations in Madrid. 


Coming from a country that considers it a problem when the unemployment rate is at 5 % I feel embarrassed to complain about the effects of the crisis on Switzerland.  When I look at the shocking unemployment figures here in Spain or how many people are loosing their job daily I feel overwhelmed. 25% unemployment rate, 50% unemployment rate among under 25 years old. No wonder a massive brain drain is happening currently that will impact the economic situation in the country for years to come. One strong signal is that everywhere on the streets of Madrid you find offers for language courses. Languages spoken outside of Spain. National languages of countries that are less hit by the economic crisis (German, English, French).


One of the most depressing outcomes of the crisis is the increasing number of suicides in Spain. Many people are living from almost nothing nowadays. A social welfare system exists but living from 400 Euros a month is not easy. Entire families are more and more dependent on the small pensions of their grandparents and have to live all together under one roof.


However, even when walking through Salamanca or Retiro area of Spain you see some aspects of the crisis. There are many shops closed or having sales than before the crisis. When you take the metro you see often that at least one stairway is not functioning. I am healthy but elderly people and families with the strollers must regularly walk down or up 2-3 levels to reach the metro. In the recent days we had a serious outcome of the problem when due to a strike of an organization the garbage was pilling high in the streets. The pictures went around the world.


Also, there are countless postings for apartments sticked to poles and walls everywhere. Real bargains I have been told. The prices are reduced time and time again. But still who can afford these apartments nowadays? Will the prices for housing ever recover again? It is difficult to tell. But it is more than evident that a lot of people are trying to make desperately some cash available by selling apartments and parking lots under the price they have originally bought them. 


You see also a swarm of people in yellow or orange overalls trying to buy gold from you. They existed before but when you walk from one end of Puerta del Sol to the other I am sure you’ll see at least 10 people offering the same service. People are trying hard to endure some months more by selling their beloved families gold. Many companies are exploiting the desperation and pay their employees less and less and don’t pay them the bonus. 


And obviously still a lot of people are talking about the crisis. Even though some don’t want to talk about it anymore. I even have seen a sign in a bar saying that it would be forbidden to talk about the crisis in this bar. It is clear that everybody has its story to tell. From the taxi-driver complaining about the austerity pact to the newspaper vendor insulting the German governments to the man at the bar starting a heated discussion about some Spanish persons or organizations even benefiting from the effects of the crisis.


One of the most controversial things when talking to people is the discussion about Banks such as Bankia. Bankia is one of the banks that had to be backed-up by the government with billions of public money. Bankia is not the only bank in the world that had to be rescued with tax payers money but the tragedy is that they have still a lot of bad loans in their books. New laws have facilitated the process to get people removed when they are behind with their rent or mortgage payments. Entire families being left on the streets for good. The paradox and complexity of the issue is that banks such as Bankia must make profits again and the law allows them to get hold of apartments and houses. But the people they are kicking out of their appartments are the same people that have saved them by paying their taxes.


A lot of people are fooled by the fact that restaurants, bars and clubs are still quite full. It is true that Spaniards are still going out and have their coffees, tapas, beer and wines outside. However, I was told by barkeepers that people are spending much less than before. A beer has to last simply longer nowadays. I assume that before Spaniards would live without their beloved tapas, beers and wines they would rather give up something else. It is an integral part of their culture and helps them to release some of the pressure. Just recently I saw that less and less people are bringing their cars to the overdue inspection. Tires are not changed although they are old and their profiles look more like a Formula 1 tire. As soon as it starts to rain you see many cars on the side of the road because of aquaplaning. Many people are just trying to save money somewhere to at least be able to go out once in while.


My year in Spain will soon end and it was an incredible experience. Being countless hours stuck at IE or back home working on assignments made it very difficult to really understand the country more in depth and assess the real impact of the crisis. I simply hope that Spain will recover soon as it is an incredibly culturally rich country with a lot of well-educated people that has a lot of potential.