Spain is the next Greece
There seems to be a trend going on in European countries with nanny-state socialist tendencies recently:
Thousands of people last night filled Puerta del Sol, where demonstrators have used Twitter to attract supporters to a makeshift camp in the central Madrid plaza, mirroring the use of social media that fueled the recent protests in Tunisia andEgypt. They’ve plastered buildings with posters and slogans and are holding political discussions throughout the day.
Spain’s Socialist government, which faces regional and local elections on May 22, turned against its traditional base to push through the deepest budget cuts in at least three decades and overhaul labor and pension laws. The collapse of Spain’s debt-fueled property boom left the country with an unemployment rate of 21 percent, and 45 percent of young people out of work.
“The rich are getting richer and the poor are getting poorer,” Pepa Garcia, a 34 year-old unemployed actress, said in an interview yesterday at the Puerta del Sol. “People should be indignant; some banks are getting rescued with our money while we’re almost drowning.”
Spain’s bank-rescue fund has committed around 11 billion euros ($16 billion) to lenders suffering from the collapse of the real estate market. Savings banks need another 14 billion euros to meet new capital requirements, the Bank of Spain estimates. The government is pushing lenders to raise those funds from private investors, with the national rescue facility known as FROB acting as a backstop.
The Socialists are set to suffer a setback in most of the regional elections, polls show. The party will be beaten in the region of Castilla-La Mancha, which it has controlled for three decades, and may lose the city of Barcelona for the first time since Spain’s return to democracy in 1975, according to a poll by the state-run Center for Sociological Research on May 5.
[Spanish Prime Minister Jose Luis] Zapatero has angered traditional supporters by slashing public wages, freezing pensions and seeking to change wage- bargaining rules as part of his efforts to cut the euro-region’s third-largest budget deficit and shield the Spanish economy from the sovereign debt crisis.
There are lessons to be learned here in the United States, as more and more people become dependent on a government check for support. The government should always be considered temporary help to your situation, because as fast as the government gives, so can it take away.