Jobless in Europe: The wretches of Spain

What kind of a social model is it that leaves half of young people out of work? George Eaton profiles Spain's employment woes.

What kind of social model is it that leaves more than half of young people out of work? In two European Union countries, Greece and Spain, this grim threshold has now been passed. Of the pair, it is the latter that is most striking. In the EU’s fifthlargest economy, youth unemployment stands at 56.1 per cent, a level that would once have been considered unthinkable by those who lived through the post-Franco Spanish “economic miracle”.

The chronic joblessness is largely attributable to the 2008 crash and the austerity subsequently imposed at the behest of Berlin. In the boom years the Spanish economy became dangerously reliant on construction, which at its peak accounted for 16 per cent of GDP and 12 per cent of employment. When the property bubble burst, after house prices had risen by more than 100 per cent in ten years, unemployment immediately surged.

The €27bn of spending cuts and tax rises introduced by the Rajoy government have made a bad situation worse, with the economy falling into a double-dip recession. Keynes’s advice to “take care of unemployment” and let the budget deficit “take care of itself” has been ignored by the austerians of Brussels.

Yet this alone cannot explain Spain’s exceptional youth joblessness, which stood at 18.2 per cent even before the crash. The root of the problem lies in the country’s two-tier labour market, which gives permanent workers huge advantage over their temporary counterparts. Unable to adjust the pay and conditions of long-standing employees established through collective bargaining agreements, companies took to laying off the third of workers on short-term contracts. A report last year by the Bank of Spain’s Centre of Monetary and Financial Studies found that 90 per cent of those who had lost their job since 2007 were in temporary employment. The apparent ease with which short-term work could be found before the crisis, most notably in the property sector, also encouraged the young to drop out of school as early as possible. As a result, 30 per cent of young Spaniards have no qualifications, leaving them unable to compete for high-skilled jobs. The problem is compounded by a welfare system that removes all support from claimants once they find work, however low-paid, prompting some to conclude they are better off remaining on benefits and working in the black economy.

The labour-market reforms introduced by the government, including allowing struggling companies to opt out of collective bargaining agreements and a reduction in the highest level of severance pay (aimed at encouraging firms to take a chance on new workers), may improve the situation at the margins but many are not waiting to find out. More than 280,000 young people left Spain last year in search of work, with Germany, the UK, Argentina and Venezuela the most popular destinations. Thousands of young scientists and academics have departed after a 40 per cent cut in state spending on research and development. It leaves Spain ill-equipped for when recovery comes.

In the meantime, those unwilling or unable to emigrate are left with the melancholy reflection that they are just halfway through what is almost certain to be a lost decade.

An employed mother of four in unfurnished social housing in Bollullos del Condado, Spain. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

This article first appeared in the 19 August 2013 issue of the New Statesman, Why aren’t young people working

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Theresa May "indifferent" towards Northern Ireland, says Alliance leader Naomi Long

The non-sectarian leader questioned whether the prime minister and James Brokenshire have the “sensitivity and neutrality” required to resolve the impasse at Stormont.

Theresa May’s decision to call an early election reflects her “indifference” towards the Northern Ireland peace process, according to Alliance Party leader Naomi Long, who has accused both the prime minister and her Northern Ireland secretary James Brokenshire of lacking the “sensitivity and neutrality” required to resolve the political impasse at Stormont.

In a wide-ranging interview with the New Statesman, Long – who is running to regain her former Belfast East seat from the DUP for her non-sectarian party in June – accused the Conservatives of “double messaging” over its commitment to Northern Ireland’s fragile devolution settlement. The future of power-sharing province remains in doubt as parties gear up for the province’s fourth election campaign in twelve months.

Asked whether she believed the prime minister – who has been roundly criticised at Stormont for her decision to go to the country early – truly cared about Northern Ireland, Long’s assessment was blunt. “We have had no sense at any time, even when she was home secretary, that she has any sensitivity towards the Northern Ireland process or any interest in engaging with it at all... It speaks volumes that, when she did her initial tour when she was prime minister, Northern Ireland was fairly low down on her list.”

The timing of the snap election has forced Brokenshire to extend the deadline for talks for a fourth time – until the end of June – which Long said was proof “Northern Ireland and its problems were not even considered” in the prime minister’s calculations. “I think that’s increasingly a trend we’ve seen with this government,” she said, arguing May’s narrow focus on Brexit and pursuing electoral gains in England had made progress “essentially almost impossible”.

“They really lack sensitivity – and appear to be tone deaf to the needs of Scotland and Northern Ireland,” she said. “They are increasingly driven by an English agenda in terms of what they want to do. That makes it very challenging for those of us who are trying to restore devolution, which is arguably in the worst position it’s been in [since the Assembly was suspended for four years] in 2003.”

The decisive three weeks of post-election talks will now take place in the weeks running up to Northern Ireland’s loyalist parade season in July, which Long said was “indicative of [May’s] indifference” and would make compromise “almost too big an ask for anyone”. “The gaps between parties are relatively small but the depth of mistrust is significant. If we have a very fractious election, then obviously that timing’s a major concern,” she said. “Those three weeks will be very intense for us all. But I never say never.”

But in a further sign that trust in Brokenshire’s ability to mediate a settlement among the Northern Irish parties is deteriorating, she added: “Unless we get devolution over the line by that deadline, I don’t think it can be credibly further extended without hitting James Brokenshire’s credibility. If you continue to draw lines in the sand and let people just walk over them then that credibility doesn’t really exist.”

The secretary of state, she said, “needs to think very carefully about what his next steps are going to be”, and suggested appointing an independent mediator could provide a solution to the current impasse given the criticism of Brokenshire’s handling of Troubles legacy issues and perceived partisan closeness to the DUP. “We’re in the bizarre situation where we meet a secretary of state who says he and his party are completely committed to devolution when they ran a campaign, in which he participated, with the slogan ‘Peace Process? Fleece Process!’ We’re getting double messages from the Conservatives on just how committed to devolution they actually are.”

Long, who this week refused to enter into an anti-Brexit electoral pact with Sinn Fein and the SDLP, also criticised the government’s push for a hard Brexit – a decision which she said had been taken with little heed for the potentially disastrous impact on Northern Ireland - and said the collapse of power-sharing at Stormont was ultimately a direct consequence of the destabilisation brought about by Brexit.

 Arguing that anything other than retaining current border arrangements and a special status for the province within the EU would “rewind the clock” to the days before the Good Friday agreement, she said: “Without a soft Brexit, our future becomes increasingly precarious and divided. You need as Prime Minister, if you’re going to be truly concerned about the whole of the UK, to acknowledge and reflect that both in terms of tone and policy. I don’t think we’ve seen that yet from Theresa May.”

She added that the government had no answers to the “really tough questions” on Ireland’s post-Brexit border. “This imaginary vision of a seamless, frictionless border where nobody is aware that it exists...for now that seems to me pie in the sky.”

However, despite Long attacking the government of lacking the “sensitivity and neutrality” to handle the situation in Northern Ireland effectively, she added that Labour under Jeremy Corbyn had similarly failed to inspire confidence.

“Corbyn has no more sensitivity to what’s going on in Northern Ireland at the moment than Theresa May,” she said, adding that his links to Sinn Fein and alleged support for IRA violence had made him “unpalatable” to much of the Northern Irish public. “He is trying to repackage that as him being in some sort of advance guard for the peace process, but I don’t think that’s the position from which he and John McDonnell were coming – and Northern Irish people know that was the case.” 

Patrick Maguire writes about politics and is the 2016 winner of the Anthony Howard Award.

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