The hard face of recession

July 11, 2012 by Ann Larson 2 Comments

Warning: this is not a cheerful blog today. It talks about current events, so if you’re not interested, just stop reading now.

OK, you’ve been warned! I’m sorry, but even though I am a pretty cheerful soul, the headlines today were pretty somber. Reading the Wall Street Journal this morning, Spain has announced a whole new set of austerity measures, in order to get the bailout money they’ve requested.

You can agree with bailouts for banks, or not. Personally, I wonder if some of the current disasters could have been avoided if a few banks had been called to task for their recklessness, but it’s too late for that now. So a bailout for Spain is on, and ‘austerity cuts’ must be made.

There have already been 2 earlier cuts since Rajoy took office. It’s not his fault, as he inherited this mess, but in the way that it always goes, he will almost certainly take the blame.

So IVA (sales tax) is up 3 points, to 21%. That will hurt. As will increases in income tax. As will loss of payments to the unemployed.

Add to that the swinging fines for … well, almost everything. Many of the regulations that have been on the books forever are now being enforced. But you won’t be given a warning first, you’ll only know you’re doing something wrong when the Guardia turn up and fine you. I’ve already heard of at least 3 instances of this happening in our own village. No warning. That doesn’t feel right to me.

Also not right is the fallout from being unemployed. In many cases, families are pitching in with food, money and clothes, so in a close community like Yunquera, the ramifications take longer to be felt. But even Yunquera now has food parcels handed out by the church to needy families in the village.

And in the next town down, people queue up to receive bags of near-sell-by-date food being discarded by the supermarkets. (by law, the supermarkets cannot give this food away, they have to throw it away (a madness in itself). In this town, the supermarkets are kind enough to wrap the food in plastic bags before throwing it away, so that the hungry public can reach into the bins and easily get the bags). This is one of the saddest sights I’ve ever seen, and I don’t think I’ll ever forget it.

It’s hard for me to see how the Spanish can continue to take it. Higher taxes, less income, no jobs. Further cuts to come, for sure. It worries me – will there be riots? Refusal to pay? Another election? Nothing? We have talked with our friends here late into the night on the subject, and no one can predict…

See also:

Spain piles on austerity measures